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The Turkish Competition Authority Fines Elon Musk due to Failure to Notify the Twitter Deal
“Result of the examination in relation Elon R. MUSK’s Takeover of Sole Control of Twitter Inc. (6.3.2023)
As a result of ex officio examination of the transaction for the acquisition of sole control of Twitter Inc. by Elon R. MUSK in accordance with Article 11 of the Law on the Protection of Competition No. 4054, it was unanimously decided during the meeting of the Competition Board dated 02.03.2023, that;
[1] *The EUR figures are converted using the exchange rate of EUR 1= TRY 17.38, based on the applicable Central Bank of the Republic of Turkey average buying rate for 2022. [2] **The USD figures are converted using the exchange rate of USD 1= TRY 16.56, based on the applicable Central Bank of the Republic of Turkey average buying rate for 2022. [3] Article stipulates that in cases of failure to notify, acquirer shall be sanctioned with a monetary fine of 0.1% based on the turnover generated in the financial year preceding the date of the fining decision. In practice, the TCA calculates the fine over the Turkish turnover.
Bahadır BALKI Nabi Can ACAR
- the transaction is subject to clearance within the scope of Article 7 of the Law No. 4054 and the Communiqué No. 2010/4 on Mergers and Acquisitions Requiring Permission from the Competition Board;
- clearance must be granted as there is no significant reduction in effective competition as a result of the transaction,
- however, due to the fact that the transaction was carried out without the clearance of the Competition Board, the transaction party in the position of acquirer, Elon R. MUSK must be imposed with an administrative fine at the rate of one thousandth of its gross income generated from Turkey in accordance with subparagraph (b) of the first paragraph of Article 16 of the Law on the Protection of Competition No. 4054.
- The transactions where total Turkey turnovers of transaction parties exceed 750 million TRY (approx. EUR*[1]15 million or USD**[2] 45.28 million for 2022) and Turkey turnovers of at least two of the transaction parties separately exceed 250 million TRY (approx. EUR* 14.38 million or USD** 15.09 million for 2022).
- In acquisitions; assets or operations that are subject to the acquisition and in mergers; Turkey turnover of at least one of the transaction parties exceed 250 million TRY and global turnover of at least one of the other transaction parties exceed 3 billion TRY (approx. EUR* 172.61 million or USD** 181.15 million for 2022, if 2022 turnovers are available).
[1] *The EUR figures are converted using the exchange rate of EUR 1= TRY 17.38, based on the applicable Central Bank of the Republic of Turkey average buying rate for 2022. [2] **The USD figures are converted using the exchange rate of USD 1= TRY 16.56, based on the applicable Central Bank of the Republic of Turkey average buying rate for 2022. [3] Article stipulates that in cases of failure to notify, acquirer shall be sanctioned with a monetary fine of 0.1% based on the turnover generated in the financial year preceding the date of the fining decision. In practice, the TCA calculates the fine over the Turkish turnover.
Bahadır BALKI Nabi Can ACAR