Single Economic Unit

Also known as: Economic Unit, Group Companies, Parent Company Liability, Ekonomik Bütünlük

In short

The treatment of group companies under the same control as a single undertaking for competition law purposes despite being separate legal entities; it has consequences for intra-group agreements, turnover calculation and parent company liability.

The single economic unit doctrine means that companies under the same control are treated as a single undertaking for competition law purposes despite being separate legal entities. The reference in Law No. 4054’s definition of undertaking to “units forming an economic whole” is the basis for this principle.

Consequences

Intra-group agreements: Agreements on prices or market sharing between a parent and its subsidiaries or between sister companies generally fall outside the prohibition on anti-competitive agreements, as there are not two independent undertakings.
Turnover calculation: Administrative fines and notification thresholds for mergers and acquisitions may be calculated on the turnover of the entire economic unit.
Liability: The parent may be held liable for a subsidiary’s infringement.
Dawn raids: The Authority may conduct dawn raids at the premises of different companies within the economic unit.

Determining Control

The boundary of the economic unit is set by control: the person or company able to exercise decisive influence over a company’s strategic decisions controls it. A majority shareholding is the clearest example, but veto rights attached to a minority stake may also create joint control. Correctly mapping the group structure directly affects the turnover on which fines are calculated and notification obligations.

Jointly Controlled Companies

Whether a joint venture jointly controlled by two separate groups forms a single economic unit with its parents is assessed case by case. Where the parents compete with each other, information flows through the joint venture create additional risk.

In E-Commerce Law

The economic unit concept is also used in E-Commerce Law No. 6563; marketplaces’ and sellers’ net transaction volume is calculated on an economic unit basis.

Frequently Asked Questions

Is a price agreement between our group companies a competition infringement?

Companies under the same control form a single economic unit and are treated as one undertaking, so agreements between them generally fall outside Article 4 of Law No. 4054.

Can the parent company be held liable for a subsidiary's infringement?

Yes. If the parent has decisive influence over the subsidiary, they form a single economic unit and the parent may be held liable; the fine may be calculated on the group's turnover.

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