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On July 14 2002 the Turkish Competition Board issued a new communiqué, mainly in line with the European Commission Block Exemption Regulation, on the group exemption of vertical agreements, replacing previous communiqués on group exemptions of exclusive distribution agreements, exclusive purchasing agreements and franchise agreements. Agreements benefiting from the previous group exemption communiqués must now comply with the provisions of the new communiqué by July 14 2003 to be exempted from the application of the relevant article of the Law on Protection of Competition regarding the prohibition of concerted practices resulting in the prevention, restriction or distortion of competition in a market for goods and services.

By defining what is not block-exempted instead of defining what is exempted, the communiqué makes the applicable rules simpler. The communiqué applies to vertical agreements between two or more undertakings that operate in a different level of the production or distribution chain, and that relate to the purchase, sale or re-sale of goods or services. Vertical agreements entered into between competing undertakings may only be exempted if the supplier is both the manufacturer and the distributor of the contract goods, while the buyer is not the manufacturer but merely the distributor of the goods competing with the contract goods.

Contrary to practice under EU competition law, the communiqué does not foresee a market share threshold for either the supplier or the buyer for the group exemption to apply.

The communiqué provides a list of the hardcore restrictions that lead to the exclusion of certain vertical agreements from the application of the group exemption. For example, vertical agreements containing certain types of anti-competitive restraints such as minimum and fixed re-sale prices, preventing active and passive sales to end users and preventing end users from obtaining spare parts, among others, are excluded from the application of the group exemption.

Finally, non-competition obligations, if their duration is indefinite or exceeds five years, post-term non-competition obligations and any obligation causing the members of a selective distribution system to refrain from selling the brands of particular competing suppliers are excluded from the communiqué.

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