Turkey offers a unique environment for investments

Competition Board Chairman Birol Kule stated that, in terms of the implementation of competition law, Turkey provides foreign investors with an environment at the level of developed countries.

Kule told AA correspondent that Turkey offers a unique environment for investments with its young and dynamic population, cosmopolitan culture, rich natural resources, strong legal and institutional infrastructure.

Stating that the primary factor taken into consideration for any investment decision is “certainty”, Kule stated that investors do not want to face uncertainties and transaction costs that would prevent optimal results, especially when they use a certain technical knowledge or advantage by taking risks.

Pointing out that competition law regimes are universal except for some nuances, Kule said, “Since the liberal economic system is a system that is agreed upon today, and the coordination of the economy in these systems is provided by institutions that operate independently on the basis of impartial, technocratic, efficiency. The whole world operates according to the same economic principles, except for a few marginal exceptions.”

Emphasizing that the existence of a competition authority that effectively applies the rules of competition law while determining the investment decisions of investors is one of the factors taken into consideration, Kule said:

“This situation reassures the investor that all undertakings operating in the markets will be offered equal conditions by the public authorities in the relevant country and that local enterprises will not be discriminated against, and thus contributes to the entry of foreign investors into the country. We, as the Competition Authority, fulfill our duty meticulously in creating a suitable environment for foreign direct investments that our country needs for its development.”

“Our alignment with the EU acquis in competition law is complete”

Kule explained that Turkey does not have any deficiencies in terms of competition law practices compared to other countries, and even that it is in full compliance with the EU acquis, and that this situation was also determined in the EU progress and EU Turkey reports. Pointing out that Turkey’s competition law legislation has become parallel to EU competition law with the latest changes, he said that the Competition Board also takes its decisions independently.

Stating that the efforts to improve competition law practices in Turkey and to update them constantly in a fully modern form, Kule said that the Competition Authority was also appreciated in the international arena and its experience was needed, and he added, “In this context, in terms of the implementation of competition law, an environment at the level of developed countries is provided for foreign investors in Turkey.”

Birol Kule stated that Turkey’s competition law regime does not even have the public-private distinction as in some other countries, it is applied equally to all economic actors without any distinction between domestic and foreign or public and private, and there are no exceptions to this.

Considering the intensity of transactions on a global scale in mergers and acquisitions transactions, Kule noted that in 2019, only 38 of the 208 concentrations examined by the Competition Authority were from Turkey, and in 115 of them all parties were formed by companies established in accordance with foreign laws.

“In 2019, it was envisaged to invest in companies of Turkish origin in 46 separate transactions by foreign investors. According to the ranking made on transaction basis among foreign investors, Japan origin investors rank first with 6 transactions. The investment amount reported to be realized by 3 foreign investors in these transactions where the target company is originated from Turkey is approximately ₺36 billion 177 million. “

Turkey ranks 6th in the world in terms of local competition intensity

Reminding that the EU publishes the “Turkey Report”, which examines Turkey’s 33 headings every year, Kule said that one of the issues examined here is competition law. He stated that in the 2020 Turkey Report, it was stated that the Competition Authority and its functioning are quite adequate and in line with the EU acquis and that the institution has sufficient capacity to make independent decisions and implement competition law.

Cornell University, INSEAD, and the World Intellectual Property Organization (WPO) publish the “Global Innovation Index” every year by measuring the innovation activities in the world. Kule stated that countries in the index are ranked according to various criteria such as the ease of obtaining loans, the ratio of local loans to private companies to GNP, and that one criterion in the index is “intensity of local competition”. According to the criterion of ‘intensity of local competition’ in the Global Innovation Index, Turkey ranks 6th among all countries in 2019. This situation reveals that our country’s economy is highly competitive.”

Digital competition highlights

Noting that the first item of the global agenda in the next period will be inequalities due to digitalization and the new type of coronavirus (Covid-19) epidemic, Kule said:

“The gradual development of the digital world has also accelerated our work in this field. We plan to conclude our ‘Digitalization and Competition Policy’ study, which we started last year to determine the road map that our institution will follow in the coming period. This study will reveal the need to revise our competition legislation for the digital economy and to reform if necessary. Within the scope of the study, it is planned to design policies according to the needs of our country by reviewing the studies prepared by the world’s reputable competition authorities in the field of digitalization. Another sector review we have been conducting in this area is the ‘e-Marketplace Platforms Sector Review’ and we are examining whether digital platforms are harming the competition in our ongoing investigations such as Cicek Sepeti, Sahibinden, Nadir Kitap, apart from our investigations at Google, Yemek Sepeti. In 2021, the processes will be completed in terms of the competition reviews that are currently ongoing at our institution and will be finally decided by the Board.”

In addition, he emphasized that taking into account the dynamic nature of digital markets, rapid and effective intervention will continue against competition violations in the relevant markets. He added saying, “Apart from these, the Facebook investigation, which is followed with curiosity both in Turkey and abroad, was initiated ex officio by the decision of the Board dated January 11, 2021, and is based on competition law and data relationship, which will constitute an important part of our department’s work intensity in 2021.”

Source: AA / Translated by Irem Yildiz

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