Block Exemption
Also known as: Block Exemption Communiqué, Vertical Block Exemption, Communiqué No. 2002/2, Grup Muafiyeti
Author Ali Gül
In short
An exemption regime, set by Competition Board communiqués, that automatically exempts agreements meeting certain conditions from the prohibition on anti-competitive agreements without the need for individual application.
Block exemption means the automatic exemption, through communiqués issued by the Competition Board under Article 5 of Law No. 4054, of certain types of agreements meeting specified conditions from the prohibition on anti-competitive agreements. No application to the Board is needed for an agreement meeting the conditions; this is what distinguishes it from individual exemption.
Main Block Exemption Communiqués
- Block Exemption Communiqué on Vertical Agreements (No. 2002/2),
- Block Exemption Communiqué on Vertical Agreements in the Motor Vehicle Sector,
- Block Exemption Communiqué on Technology Transfer Agreements,
- Block Exemption Communiqué on Research and Development Agreements,
- Block Exemption Communiqué on Specialisation Agreements,
- Block Exemption Communiqué on the Insurance Sector.
The Vertical Agreements Communiqué
The most commonly used is the communiqué on vertical agreements. Its main conditions are:
- Market share: The supplier’s share of the relevant market must not exceed thirty percent.
- No hardcore restrictions: Resale price maintenance, territorial and customer restrictions preventing passive sales, restricting sales by authorised dealers to end users in selective distribution, and de facto bans on online sales are hardcore restrictions. An agreement containing a hardcore restriction loses the exemption entirely, whatever the market share.
- Non-compete duration: Non-compete obligations must not exceed five years; an obligation exceeding this loses the exemption, but the rest of the agreement may continue to benefit.
Withdrawal of the Exemption
If the Board finds that an agreement benefiting from block exemption has effects incompatible with the conditions of Article 5 in a specific case, it may withdraw the exemption for that agreement. This may happen where similar agreements cover a significant part of a market.
Frequently Asked Questions
If our market share exceeds thirty percent, is our agreement prohibited?
No. The block exemption is not available, but this does not mean the agreement is automatically prohibited. Its effects and efficiencies are assessed individually.
Do we need to apply to the Competition Board for block exemption?
No. Block exemption is automatic; no application is needed for agreements meeting the conditions. Companies are responsible for assessing and documenting that the conditions are met.
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