Turkish Competition Board Fines Gentlemen’s Agreements in Labour Markets

Chronology of the Investigation

The investigation was triggered by evidence obtained during an on-site inspection on 4 June 2020, conducted as part of a separate case concerning Yemeksepeti. These documents indicated a no-poach understanding among Yemeksepeti, Zomato, Monitise Yazılım, and Markafoni. Based on these findings, the Board initiated a preliminary investigation ex officio through its decision numbered 20-27/336-M. Subsequently, a decision dated 22 October 2020 was adopted to launch a preliminary investigation, and starting from February 2021, on-site inspections were carried out at Commencis, Yemeksepeti, and Zomato. On 1 April 2021, the Board decided to open a full-fledged investigation, expanding its scope to include numerous undertakings such as Trendyol, Çiçeksepeti, Sahibinden, Getir, and Google Turkey. During the course of these inspections, the Authority determined that certain undertakings had obstructed or hindered the inspection process. Consequently, on 27 May 2021, the Board imposed administrative fines on Çiçeksepeti, N11, and Sahibinden. On 5 August 2021, with decision no. 21-37/527-M, a second-wave investigation was initiated and merged with the existing case. In December 2021, the scope was further expanded to include additional undertakings, such as Beymen, Bilge Adam, Vodafone, and İstegelsin.

Throughout the process, the settlement mechanism was actively utilized. Settlement applications submitted by undertakings such as Trendyol, Getir, BiTaksi, Adeo, Garanti Teknoloji, Beymen, Obilet, Doğuş Teknoloji, Commencis, İstegelsin, and Yemeksepeti were concluded through Board decisions, leading to the termination of the investigation with respect to these parties. Conversely, applications concerning the commitment mechanism were rejected, as the competition concerns discussed in the case were deemed to constitute clear and hardcore infringements. The written defences of the remaining parties were collected, and the final oral hearings were held on 18–19 July 2023.

During the on-site inspections conducted by the Board in the spring and summer of 2021, numerous documents were obtained indicating that coordination in the labour market was implemented through various methods. These documents included;

• “off-limits” lists integrated into human resources processes,
• direct communications between competing undertakings aimed at restricting employee transitions,
• correspondence showing that blacklisted company lists were shared with recruitment agencies, and
• contractual provisions requiring compensation if employees of rival undertakings were hired within a certain period.

Notable examples include correspondence between Burger King and Yemeksepeti regarding restrictions on courier transfers, a gentlemen’s agreement between Getir and Insider not to hire each other’s employees directly, and agency and internal communications between Hepsiburada and İstegelsin concerning employee transitions. Based on a holistic assessment of this evidence, the Board concluded that there was a meeting of minds among the undertakings to engage in no-poach agreements.

Relevant Market Definition

The Board assessed the relevant product market from the perspective of the labour market, where employers are positioned on the demand side and employees on the supply side. It emphasized that, in order to accurately evaluate the effects of agreements restricting employee mobility, factors such as wages, working conditions, and level of expertise must be considered in terms of substitutability.

Instead of defining a precise market, the Board considered an approach based directly on the restrictive effects on competition to determine market power. Studies cited in the decision demonstrated that employer concentration could restrict competition and that labour supply elasticity had decreased due to various factors.

As emphasized in the decision, U.S. cases such as Knorr-Bremse and Deslandes did not distinguish between employee types or examined provisions covering all restaurant workers[3]. In the EU, by contrast, Spanish and French cases analysed no-poach provisions as part of buyer cartels alongside wage-fixing practices, without defining a separate “employment market.”[4]

In the present case, due to the parties operating in different sectors and the agreements covering the majority of employees, the Board refrained from making a definitive product market definition. Regarding the geographic market, it was stated that, given the absence of homogeneity in specialization or franchising structures, whether the definition was narrow or broad would not change the outcome, and therefore no geographic market definition was made.

Competition Law Assessment of No-Poach Agreements

The Board classified no-poach agreements as by-object restrictions (hardcore infringements) under competition law. These agreements prevent employers from competing with one another to recruit labour, thereby restricting employees’ freedom to change jobs and disrupting the natural course of wages, ultimately weakening market dynamics. In its legal assessment, the Board took the supply and demand mechanisms of the labour market as the primary framework: employees are on the supply side, while employers are on the demand side. Agreements between rival employers that restrict employee mobility artificially limit labour demand, intervening in the functioning of the market in the same way as a buyer cartel. Therefore, the fact that the parties have low market shares in the labour market or operate in different output markets does not eliminate the finding of an infringement. According to the Board, the key factor in the labour market is that employees must be able to move freely between alternative employers, so that wages, working conditions, and career opportunities are shaped by competitive market dynamics.

The decision also emphasized that no-poach agreements may only be considered ancillary restraints if they are narrowly scoped, project-specific, and limited in duration. For a restraint to qualify as lawful, two cumulative conditions must be met: (i) The restriction must be directly related and necessary for the implementation of a legitimate main agreement, and (ii) It must be proportionate in terms of duration, geographic scope, and subject matter. For instance, in the context of a merger or acquisition, a non-solicitation clause covering only the staff of the acquired business unit and limited to a specific period during a merger or acquisition could be regarded as an ancillary restraint. Conversely, broad, indefinite prohibitions applying to all employees cannot be justified as part of a legitimate cooperation. Such arrangements constitute a clear violation of Article 4 of Law No. 4054.

The undertakings under investigation argued that the no-poach agreements in question covered only a limited group of employees and were necessary for the implementation of a legitimate main agreement, and therefore should be considered ancillary restraints. However, the Board, taking into account the prevalence and breadth of the evidence and agreements in the case file, concluded that such restrictions were disproportionate in terms of duration, scope, and subject matter, and thus could not be regarded as ancillary restraints.

The undertakings further argued that the restrictions on employee mobility were implemented to enhance customer satisfaction, maintain service quality, and protect investments made in employee training, and therefore increased efficiency. The Board, however, found that these claims did not generate sufficient economic benefits to justify granting an exemption under Article 5 of Law No. 4054. On the contrary, the Board assessed that such restrictions directly limited employees’ freedom to change jobs and therefore constituted hardcore infringement.

In its decision, the Board not only relied on the legal framework but also referred to economic literature and empirical studies to demonstrate the effects of no-poach agreements on the market. These studies show that such agreements artificially suppress employee wages, limit career mobility and promotion opportunities, and, in the long term, reduce innovation and productivity in the labour market. The decision emphasized that no-poach agreements harm not only individual employees but also the functioning of the economy as a whole. Preventing employees from moving to alternative employers offering better wages and conditions eliminates employers’ incentives to compete for human resources, which in turn negatively impacts both wage growth and labour productivity.

As a result, the Board concluded that systematic and large-scale no-poach agreements between competing undertakings pose a serious threat not only to individual employees but also to the overall functioning of the labour market and the general competitive structure of the economy. Accordingly, it was explicitly established that protecting competition in the labour market is as important as ensuring competition in output markets, and that no-poach agreements must be treated under the cartel regime within the scope of Article 4 of Law No. 4054.

Findings and Final Fines

As a result of its assessment, the Board concluded that sixteen undertakings had violated Article 4 of Law No. 4054 by engaging in no-poach agreements. These undertakings are: LC Waikiki, Türk Telekom, FLO, TAB Gıda (Burger King), KoçSistem, Vodafone, Hepsiburada, Arvato, Bilge Adam, Binovist, Veripark, Vivense, Çiçeksepeti, Insider, Zeplin, and Zomato.

In its decision, the Board imposed the highest administrative fine on LC Waikiki, amounting to 59,590,457.10 TL. It was followed by Türk Telekom with 41,022,658.16 TL, FLO with 18,021,702.86 TL, TAB Gıda with 7,293,869.36 TL, and KoçSistem with 6,513,239.09 TL. The fines imposed on Hepsiburada, Vodafone, Arvato, and the other undertakings remained below 5 million TL.

On the other hand, the Board decided not to impose administrative fines on twenty-one undertakings, as the violation could not be proven in their cases.

Some undertakings argued that the relationships between them were of a vertical commercial nature and, therefore, the conduct in question could not be classified as a “cartel.” The decision identified various vertical commercial relationships, such as Arvato–Trendyol, Bilge Adam–Doğuş Teknoloji and KoçSistem, Burger King–Yemeksepeti, Hepsiburada–İstegelsin, Insider–Getir and Trendyol, and LC Waikiki–Trendyol. However, the majority of the Board held that such agreements between competing employers in the labour market restrict the free movement of employees and result in the same economic outcome as market sharing, and therefore ruled that the cartel regime must be applied.

Dissenting Opinion

The decision includes a dissenting opinion authored by Board members Hasan Hüseyin Ünlü and Berat Uzun. The dissenting members agreed with the majority of the Board on the existence of the violation and the necessity of imposing administrative fines on the undertakings involved. However, they expressed different views regarding (i) the method used to calculate the fine base and (ii) whether the infringement should be legally characterized as a “cartel.”

First, the dissenting opinion raised a difference regarding the calculation of the base for administrative fines. Pursuant to Article 16 of Law No. 4054, the administrative fine imposed for a violation must be calculated based on the annual gross revenues of the undertakings as of the end of the preceding fiscal year. Article 3 of the Regulation on Administrative Fines to Apply in Cases of Agreements, Concerted Practices and Decisions Limiting Competition and Abuses of Dominant Position (“Regulation on Fines”) defines annual gross revenue as the net sales in the uniform chart of accounts or the income items closest to net sales.

In the Board’s established practice, net sales have consistently been taken as the basis for this calculation. Indeed, the Council of State (Danıştay) has also expressly confirmed in its previous decisions — such as the decision of the 13^th Chamber dated 09.05.2012 concerning Hes Hacılar Elektrik Sanayi ve Ticaret A.Ş. and the decision of the 10th Chamber dated 02.04.2013 concerning Toprak Saniterleri ve Turizm İşletmeleri A.Ş. — that net sales must be considered when determining the fine base. Accordingly, the dissenting members found legally inappropriate the approach taken in this case, where, due to the labour market context, the fine base was calculated using the ratio of employee costs to turnover, and they did not concur with this method.

The second element of the dissenting opinion concerns the legal characterization of the violation. Since this decision was adopted on 26 July 2023, during the period when the previous version of the Regulation on Fines (in force from 2009 until 27 December 2024) was still applicable, whether the violation was classified as a “cartel” or as another type of infringement directly affected the determination of the administrative fine[5].

The majority of the Board considered non-solicitation agreements to be equivalent to market sharing on the buying side and therefore classified such conduct as a “cartel.” In contrast, the dissenting members emphasized that some of the undertakings under investigation were engaged in vertical commercial relationships. The decision explicitly noted the existence of various commercial relationships between, for example, Arvato and Trendyol; Bilge Adam and Doğuş Teknoloji & KoçSistem; Burger King and Yemeksepeti; Hepsiburada and İstegelsin; Insider and Getir & Trendyol; KoçSistem and Adeo; Bilge Adam and Türk Telekom; LC Waikiki and Trendyol; Vivense and Trendyol; and Veripark and Yemeksepeti.

According to the dissenting members, where such vertical commercial relationships are present, the violation should not be classified as a “cartel” but rather as another form of hardcore infringement. The concept of a cartel primarily applies to horizontal arrangements between direct competitors with the objective of dividing the market. Applying the cartel regime to a structure that includes vertical elements risks overstepping legal boundaries and leading to an incorrect classification

In conclusion, while the dissenting members agreed with the majority on the finding of a violation and the imposition of administrative fines, they adopted a different approach regarding both the determination of the fine base and the legal characterization of the infringement.

Conclusion and Evaluation

The Turkish Competition Board has established that agreements restricting employee mobility in labour markets constitute a “by-object” hardcore infringement under Article 4 of Law No. 4054. The decision emphasizes that the use of “off-limits” lists in human resources processes, correspondence between competitors aimed at restricting recruitment, blacklists sent to recruitment agencies, and contract clauses tying employee transfers to high compensation requirements, when agreed upon between competing undertakings, produce the same economic effects as market or customer allocation and must therefore be assessed within the cartel regime.

The Board, in its exemption assessment under Article 5 of Law No. 4054, concluded that the justifications put forward by the undertakings — such as customer satisfaction, service quality, or the protection of investments made in employee training — for restricting employee mobility were not sufficient to offset the negative effects on competition. Therefore, no exemption was granted for non-solicitation agreements.

The decision further underlined that, within the supply and demand structure of the labour market, employers are positioned on the demand side while employees are on the supply side. Non-solicitation agreements between competing employers artificially restrict labour demand and, in doing so, limit competition in a manner similar to market allocation agreements in output markets.

In this context, it was emphasized that the fact that undertakings operate in different output markets or have low market shares in the labour market does not preclude the finding of infringement.

In the majority view, such agreements were assessed under the cartel regime. However, the dissenting opinion attached to the decision argued that, due to the existence of vertical commercial relationships between certain undertakings, the infringement should not be classified as a cartel but rather as another type of hardcore infringement. The dissenters also contended that the fine base should be calculated on net sales rather than using the ratio of labour costs.

In conclusion, the Board determined that systematic and widespread non-solicitation agreements between competing undertakings severely harm the functioning of competition in the labour market and decided to prohibit such agreements as a by-object hardcore infringement under Article 4 of Law No. 4054. This decision sheds light on an area long overlooked in Turkey, revealing that many practices considered “industry custom” in human resources processes actually constitute competition law violations and that coordination practices in labour markets are far more widespread across sectors than previously understood.

[1] Attorney Gülce Korkmaz Erdem is the external competition law consultant of Baş | Kaymaz Law Firm. After completing her master’s degree at Bilkent University, she is currently pursuing her doctoral studies in the field of competition law at the Faculty of Law of Lüneburg Leuphana University (Germany) as a PhD researcher with the scholarship of the Joachim Herz Foundation.

[2] For the Board’s reasoned decision on the case, please see here (only available in Turkish).

[3] As cited in the decision, United States v. Knorr-Bremse AG and Westinghouse Air Brake Technologies Corporation, No. 1:18-cv-00747 (2018); Deslandes v. McDonald’s USA, No. 1:17-cv-04857 (N.D. Ill. 2018).

[4] As cited in the decision, for the Spanish case see CNMC Decision S/012008; for the French case see Autorité de la concurrence, Decision 17-D-20, 19.10.2017.

[5] The Regulation on Administrative Fines to Apply in Cases of Agreements, Concerted Practices and Decisions Restricting Competition and Abuses of Dominant Position was updated by the new version published in the Official Gazette dated 27 December 2024 and numbered 32765. With the New Regulation on Fines, the former regime—under which the basic fine rate was set based on a “cartels vs. other infringements” distinction—was replaced. Under the former regime, the first step (determination of the basic fine) drew a distinction between “cartels” and “other infringements” (in contrast to Law No. 4054, which only provides for a fine between 0% and 10% of turnover in case of infringement). For details, please see our information note examining the New Regulation on Fines.

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