Sibel ÖZTÜRK, Attorney at Law, LL.M.
Introduction
The decision of the Turkish Competition Board dated 31 October 2024 and numbered 24-44/1029-439 is noteworthy in terms of the assessment of inter-company practices in labour markets under Article 4 of Law No. 4054 on the Protection of Competition.
In the decision, allegations regarding no-poach practices among undertakings operating in the pharmaceutical sector were examined; and, based on the findings obtained, the investigation was concluded through settlement with respect to the relevant undertaking.
This article addresses, within the framework of the aforementioned decision, the position of labour markets in competition law, as well as the Board’s assessment of no-poach practices and ancillary restraints.
I. Assessment of Labour Markets under Competition Law
In the decision, labour is treated as an input for undertakings. In this context, the importance of maintaining competition in determining employment conditions is emphasized.
It is stated that the labour market constitutes a structure where employees represent the supply side and employers represent the demand side, and that wages and other employment conditions are determined within this framework.
Accordingly, agreements between undertakings that restrict competition in relation to labour are considered to fall within the scope of competition law.
II. No-Poach Practices
In the decision, no-poach practices are defined as practices whereby undertakings directly or indirectly agree not to employ each other’s employees.
Such practices may take different forms. For instance:
It is assessed in the decision that such practices may affect employee mobility and competitive conditions in labour markets.
III. Nature of the Evidence in the File
The information and documents obtained during the investigation indicate that certain restrictions regarding the recruitment of employees were implemented among undertakings.
In particular, internal communications including expressions such as:
demonstrate that these practices were reflected in human resources processes.
The Board, by evaluating these findings as a whole, concluded that such conduct in labour markets falls within the scope of competition law.
IV. Assessment under Competition Law
The Board notes that labour constitutes a significant cost element for undertakings and that employee mobility plays a key role in ensuring competitive market conditions.
In this context, restrictions on competition regarding the employment of employees may:
V. Assessment in Terms of Ancillary Restraints
The decision also examines whether no-poach practices may, under certain circumstances, qualify as ancillary restraints.
1. Assessment in the Context of Specific Transactions
The Board acknowledges that, in certain cases, restrictions concerning employees may arise in connection with a specific economic transaction. In this respect, where employees are part of a transferred business, restrictions limited in scope and duration may be assessed within this framework.
In the case at hand, certain practices arising within the context of a specific transaction and limited in duration were evaluated accordingly.
2. Practices Not Demonstrated to Be Connected
On the other hand, certain practices identified in the file were not considered within the same framework, on the grounds that:
Accordingly, such practices were assessed separately under competition law.
Conclusion
The Genveon decision provides important insights into the assessment of inter-company practices in labour markets under competition law.
Within the scope of the decision, it is established that:
In this context, it is important for undertakings to review their recruitment processes and human resources practices in light of competition law requirements.
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