On-site inspections conducted by the Competition Authority have recently become one of the most critical risk areas for undertakings, both in terms of scope and the severity of sanctions. In particular, the full inclusion of digital data within the scope of inspections and the significant fines imposed for obstruction of inspections necessitate that this process be treated not only as a legal risk but also as an operational one.
Practice clearly demonstrates that even the misconduct of a single employee may lead to substantial administrative fines.
Scope of On-Site Inspections
Pursuant to Law No. 4054 on the Protection of Competition, the Competition Board is authorized to conduct on-site inspections at the premises of undertakings where deemed necessary.
Within the scope of an on-site inspection, the Board may:
- Examine all types of data and documents kept in physical and electronic environments,
- Take copies of such data,
- Request written or oral explanations.
The scope of inspection is not limited to commercial books, contracts, and accounting records; it also includes email correspondence, meeting notes, commercial forecasts, indirect evidence relating to contacts with competitors, servers, cloud systems, and communications on mobile devices used for business purposes.
In addition, the Authority’s technical capabilities allow for the recovery of deleted data. Therefore, data integrity is of utmost importance during the inspection process.
Management of the On-Site Inspection Process
Proper management of the on-site inspection process is decisive in mitigating the risk of sanctions. In this regard:
- The in-house legal team and external counsel should be informed immediately upon the commencement of the inspection,
- The process should be managed through a single point of coordination,
- Necessary physical and technical access should be provided to the Authority’s experts without delay,
- All employees should be promptly reminded not to delete any data and of the sensitivity of the process,
- Documents reviewed and copied should be tracked as much as possible, and minutes should be carefully checked,
- An authorized employee should accompany the experts throughout the inspection.
Critical Mistakes During On-Site Inspections
Obstruction or hindrance of an on-site inspection leads to severe administrative sanctions. In particular:
- Deletion, alteration, or concealment of data,
- Interference with devices or restriction of access,
- Delaying the entry of the Authority’s experts to the premises,
- Concealing or directing employees,
- Removing documents from the company premises,
- Any action that hinders the inspection process
are considered direct violations.
It should be emphasized that the content of the deleted data or the possibility of its recovery is not taken into account in the assessment of the violation. The act of deletion itself is sufficient.
What Do the Board’s Decisions Indicate?
The Competition Board’s decisions demonstrate that the concept of obstruction of on-site inspections is interpreted broadly:
- In decision no. 23-49/943-335 (nuts sector), administrative fines were imposed due to disrespectful and threatening behaviour towards the inspection team and the physical obstruction of entry to and exit from the administrative building.
- In decision no. 24-40/955-413 (cement sector), the deletion of WhatsApp messages from employees’ mobile devices after the inspection had commenced was considered direct obstruction of the inspection, despite partial recovery of the data.
- In decision no. 21-24/278-123 (food sector), delaying the initiation of the inspection, hindering access to employees, and subsequent deletion of data on mobile devices were collectively deemed to constitute obstruction of the inspection.
These decisions clearly show that the concept of obstruction is not limited to physical interference; actions such as delaying, directing, and deleting data are also considered within this scope.
Sanctions
Pursuant to Article 16 of Law No. 4054:
- In case of providing incomplete or incorrect information, an administrative fine of 0.1% of the undertaking’s annual turnover in Turkey of the entity for the previous financial year is imposed,
- In case of obstructing or hindering an on-site inspection, an administrative fine of 0.5% of the undertaking’s annual turnover in Turkey of the entity for the previous financial year is imposed.
In practice, these sanctions may reach significant amounts. Indeed, in a recent decision, an administrative fine of
TRY 282 million was imposed on an undertaking due to data deletion during an on-site inspection.
Conclusion and Assessment
On-site inspection processes carry a high risk of sanctions, particularly due to risks arising from employee conduct.
In this context, it is recommended that undertakings:
- Establish a clear, practical, and enforceable internal procedure for on-site inspections,
- Provide regular, practical, and scenario-based training to employees,
- Ensure effective coordination between legal and IT teams,
- Review document retention policies and maintain an up-to-date inventory of devices.
In conclusion, compliance in on-site inspections is not limited to formal adherence to legislation; it requires the proper and holistic management of the process, as well as ensuring that employees act in an informed, consistent, and prompt manner. This approach plays a critical role in preventing potential administrative sanctions.