Competition in the Labor Market: HR Practices to Avoid 05 September 2025

i. Application of Competition Law to Labor Markets

• Scope

Pursuant to Article 2 of the Law, "any agreements, practices, and decisions made between undertakings operating in goods and services markets or affecting these markets that restrict, distort, or prevent competition; the abuse of dominance by undertakings holding a dominant position in the market; as well as any legal transactions and practices of mergers and acquisitions that would significantly lessen competition, together with measures, determinations, regulations, and supervisions aimed at protecting competition" are considered within the scope of the Law.
 

In Article 3 of the Law, "service" is defined as "activities of a physical, intellectual, or combined nature performed in return for remuneration or benefit." The reasoning of this provision further states that "the labor market in which the principle of collective bargaining is accepted falls outside this definition." Accordingly, this provision is interpreted to mean that the Authority's jurisdiction does not extend to labor markets that are based on unionization and collective bargaining.
 

• Labor Markets and Competition

The Guidelines state that a labor market can be considered competitive when employers offer employees the most attractive wages and working conditions, and employees are able to select job opportunities that best match their skills and expectations. However, because labor supply is generally abundant, employer demand is limited, and worker organization is relatively weak, the structural characteristics of labor markets are considered factors that hinder and complicate effective competition.
 

The Guidelines further indicate that employers, who already hold greater bargaining power compared to employees, may engage in agreements with competitors that restrict competition to the detriment of employees (e.g., wage-fixing or no-poaching agreements), thereby further undermining the competitive structure of the market in addition to existing structural issues.
 

Moreover, because changing jobs entails both financial and social costs for employees, labor supply is structurally inflexible. When combined with the aforementioned employer practices, this situation-observed by the Authority-leads to wage suppression, restrictions on worker mobility, and a deepening of existing imbalances in the labor market.

As a result, employees face lower wages and disadvantageous working conditions, while the quality of labor, its efficient allocation, and innovation are negatively affected. For these reasons, detecting and supervising behaviors that limit competition in labor markets has become essential for both protecting workers' rights and ensuring the efficient functioning of markets.

ii. Key Prohibited Practices to Consider When Competing in Labor Markets

Pursuant to Article 4 of the Law, "agreements, concerted practices, and decisions of associations of undertakings between undertakings that directly or indirectly aim to prevent, distort, or restrict competition in a particular goods or services market, or that produce or may produce such effects, are unlawful and prohibited."

According to the Guidelines, for an agreement in labor markets to have the purpose or effect of preventing, distorting, or restricting competition, it is not required that the undertakings be competitors in output markets. Even if they operate in different sectors, undertakings competing to employ the same employees are considered rivals in this market. Therefore, agreements and concerted practices between employers, as well as decisions of associations of undertakings that aim to restrict competition or produce such an effect, are considered violations under Article 4 of the Law, even if the employers are not competitors in the output markets in which they operate.
 

This Bulletin includes the main types of agreements and concerted practices that the Authority has classified as violations.
 

• Determination of Employees' Wages and Other Working Conditions
   

Agreements or concerted practices between employers aimed at jointly determining employees' wages, fringe benefits, work location and hours, working time, annual leave, social benefits, or health insurance, as well as decisions and practices of associations of undertakings in this regard, constitute a violation of competition under Article 4 of the Law.

• No-Poach Agreements

Arrangements in which one undertaking commits to refrain from offering employment to or hiring current or former employees of another undertaking are referred to as "no-poach agreements". These agreements are typically implemented through mutual commitments not to directly approach each other's employees or by linking recruitment processes to mutual approval. As indicated by the Authority in the Guidelines and previously established by the Board in the İzmir Container Carriers Decision, no-poach agreements are, by their nature, assessed similarly to customer or supplier allocation agreements. The Guidelines further state that if such agreements are found to restrict competition in terms of their purpose, they are considered a cartel.

In the Private Hospitals Decision, the Board found that the undertakings subject to the investigation had entered into agreements, commonly referred to as "gentlemen's agreements," to refrain from hiring each other's employees. It was also determined that representatives of these undertakings discussed employee salary scales among themselves. As a result of the investigation, administrative fines totaling 57,958,835 Turkish Lira were imposed on 18 undertakings and one association of undertakings.
 

• Information Exchange
   

According to the Guidelines, information refers to all data directly or indirectly related to the workforce, and information sharing refers to the transfer of such data between undertakings.
 

In labor markets, information exchanges between undertakings can pose significant competition law risks, depending on the content and nature of the sharing. In particular, the following factors increase the likelihood of restricting competition and, consequently, the risk of violating competition law.
 

• Sharing information regarding employee wages, fringe benefits, and working conditions among a small number of undertakings,
• Disclosing data on an individual basis rather than in aggregated form,
• Sharing information that is current or forward-looking, or whose source can be easily identified.

The Authority recognizes that such exchanges may facilitate wage suppression among employers and/or restrict employee mobility, and therefore carry a clear risk of competition law infringement.

However, it is also possible to reduce the competitive impact of information exchange and, consequently, the associated legal risks. According to the Guidelines:
 

• The sharing should be conducted through an independent third party,
• Data should be aggregated in a way that individual undertakings cannot be identified,
• Information exchange should be based on data at least three months old rather than current data,
• The dataset should include information from at least ten participants, and no single participant's data should constitute more than 25% of the total set.
   

• Ancillary Restraints
   

According to the Guidelines, ancillary restrictions are constraints that do not constitute the primary purpose of the main agreement but are necessary and directly related to achieving the objectives of the agreement. These restrictions may be implemented either as a provision of the main agreement or as a separate agreement, provided that they remain subject to the main agreement. The Guidelines state that if a restriction qualifies as an ancillary restriction, it is not assessed under Article 4 of the Law. However, restrictions related to no-poach or wage-setting agreements that do not qualify as ancillary restrictions are considered infringements in terms of purpose, according to the Guidelines.
 

There are three key conditions for a restriction to be considered an ancillary restriction:
 

• Directly Related: According to the Guidelines, the restriction must be inseparable from the main agreement and implemented solely for the purpose of applying or maintaining the main agreement. In other words, if the main agreement did not exist, the restriction should not exist either. Furthermore, it must be clear which main agreement the restriction is linked to; according to the Guidelines, restrictions introduced without a clear connection fail to meet the directly related criterion.
   

• Necessary: According to the Guidelines, the restriction must be genuinely necessary for the implementation or maintenance of the main agreement. If the parties could implement or maintain the main agreement without the restriction, or through a less restrictive measure, the restriction is not considered necessary. The Guidelines also state that the mere difficulty or reduced profitability of implementing the main agreement without the restriction does not satisfy the necessity requirement.
   

• Proportional: According to the Guidelines, the restriction is considered proportional if there is no alternative, less competition-restrictive means to achieve the intended objective. Additionally, the scope of the restriction must be limited to the purpose, geographic area, duration, and parties of the main agreement.
   

• Assessments Under Articles 5, 6, and 7 of the Law

•  Exemption
   

In general, any agreement, decision, or practice that restricts competition and meets the conditions set out in Article 5 of the Law may be exempted from the application of Article 4. However, the Authority has clearly stated in the Guidelines that wage-fixing and no-poach agreements, as well as information-sharing practices aimed at restricting competition in labor markets, cannot be considered for exemption. This is because they disproportionately restrict competition both legally and economically, and the likelihood of offsetting such restrictions with sufficient economic benefits is low.

• • Abuse of Dominant Position and Mergers & Acquisitions

Pursuant to Article 6 of the Law, it is unlawful for one or more undertakings to abuse a dominant position in a goods or services market, either individually or through agreements or concerted practices with others, across the country or in a specific region. In this context, the Guidelines specify that assessments under Article 6 will examine whether the relevant undertaking holds a dominant position not only in the product or service market but also in the labor market.

Article 7 of the Law prohibits mergers that would create or strengthen a dominant position and significantly reduce effective competition in a goods or services market nationwide or in a specific region. It also prohibits an undertaking from acquiring another undertaking's assets, shares, or governance rights (except through inheritance) in a way that would substantially lessen competition.

According to the Guidelines, when assessing whether a transaction significantly reduces competition in the labor market, the following factors will be considered: the parties' shares in the relevant labor market and its concentration level, the similarity of the employees employed by the parties, barriers to entry in the relevant product market, the degree of labor organization, job-changing costs, competitors' capacity utilization and investment opportunities, potential competitive pressure, possibilities for cooperation among competitors, and the transaction's potential for a "killer acquisition."
 

Conclusion and Recommendations
 

Within the framework of the Guidelines and the Law, anti-competitive practices in the labor market pose significant legal and administrative risks. Pursuant to Article 16 of the Law, enterprises, associations of enterprises, and their members engaging in behaviors prohibited under Articles 4, 6, and 7 may be subject to administrative fines of up to 10% of their annual gross revenues. Accordingly, to prevent potential investigations and minimize associated risks, it is essential for organizations to review their human resources (HR) practices. In particular, no-poach agreements, wage-setting arrangements, and information-sharing practices should be ensured to comply with the Law and the Guidelines.
 

During preliminary investigations and formal inquiries, there is an obligation to provide the Authority with requested information and documents. Failure to fulfill this obligation or obstructing on-site inspections may trigger additional administrative fines under Article 17 of the Law. Such fines are calculated daily at a rate of 0.05% of the annual gross revenue of the preceding financial year, or, if that cannot be determined, of the closest financial year to the decision, as determined by the Authority. Therefore, ensuring compliance with current practices and full cooperation during inspections is critical to mitigating legal and financial risks.

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You can reach the current text of the Law No. 4054 on the Protection of Competition. via
https://www.rekabet.gov.tr/ tr/ Sayfa/ Mevzuat/ 4054-sayili-kanun
 

Competition Authority. (2024, December 3). İş Gücü Piyasalarındaki Rekabet İhlallerine Yönelik Kılavuz. Accessed:
https://www.rekabet.gov.tr/ Dosya/ is-gucu- piyasalarindaki- rekabet- ihlallerine- yonelik -kilavuz- 20241203141442657.pdf
 

Kıran, N. F. (2022). İşgücü Pazarında Rekabet Hukuku Uygulamaları (Specialization Thesis). Competition Authority. Accessed:
https://www.rekabet.gov.tr/ Dosya/ nezir- furkan- kiran- 20220819092342628.pdf

Gürkaynak, G. (2024). Rekabet Hukuku (2nd ed.). Seçkin Hukuk.
 

İzmir Container Carriers Decision: Decision Date: January 2, 2020, Decision No.: 20-01/3-2 Accessed at:
https://www.rekabet.gov.tr/ Karar? kararId= beedfbe9-c183-4a7f-890b-774ccb8f0839
 

Private Hospitals Decision: Decision Date: February 24, 2022, Decision No.: 22-10/152-62 Accessed at:
https://www.rekabet.gov.tr/ Karar? kararId= f3cfc3f9-2e1d-40bc-9d28-639341c72743