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Turkey: Competition Authority Launches Investigation into 32 Firms for Entering into No-Poaching Agreements

(May 17, 2021) On April 20, 2021, the Turkish Competition Authority (TCA) released a press statement announcing that it had launched an investigation into 32 firms for allegedly entering into no-poaching “gentlemen’s agreements” whereby they sought to suppress interfirm transfers of employees and thus suppress pay and labor standards. Firms under investigation include many companies that are active in e-commerce and other digital-services-related markets, including, for example, Google and Yemek Sepeti.

The TCA is Turkey’s national competition authority tasked with implementing and enforcing the Turkish competition law framework set forth by Law No. 4054 on the Protection of Competition and by article 167(1) of the Constitution of Turkey, which mandates the state to “take measures to ensure and promote the sound and orderly functioning of the money, credit, capital, goods, and services markets” and “prevent the formation, in practice or by agreement, of monopolies and cartels in the markets.”

In its statement, the TCA referred to current academic debates concerning the relationship between market power and the suppression of pay and labor standards, and to the role of competition-law tools in addressing such effects in the labor markets. The TCA noted that competition authorities around the world have increasingly made labor markets a subject of their investigations. The statement explained that unimpeded interfirm transfers of employees in competitive markets would ensure both that wages and salaries would remain competitive and that talent and ideas would diffuse among market players, thereby improving the global competitiveness of Turkish firms. The TCA also noted that uncompetitive pay and labor standards might cause employees to search for better opportunities abroad. In a statement made to the press on May 5, 2021, the president of the TCA, Birol Kule, explained that the TCA would use its powers to the utmost to protect competition in labor markets, given that competition is crucial for productivity, entrepreneurship, and innovation in the digital age, and that he personally considered this mission as a “moral duty.”