Why Netanyahu Is Bent on Regulating Hidden Advertising in the Media

What happens when the prime minister supports the right bill for the wrong reason? And is a complex cabinet reshuffle that's under way a sign that the plan to bring Zionist Union into the coalition is dead?

An illustration showing MK Miki Rothensal casting a shadow shaped like Netanyahu. Minister Kahlon is walking behind him carrying various portfolios.
Amos Biderman

For people of a certain age who followed with interest – and envy – the elegant changing of the guard in Britain’s ruling party, the following story will evoke the great comedy series “Yes, Prime Minister.” It starts with a bill submitted to the Knesset last summer by two former journalists, MKs Miki Rosenthal (Labor/Zionist Union) and Yinon Magal (Habayit Hayehudi); the latter subsequently resigned from the government under unfortunate circumstances.

The legislation deals with hidden advertising, aka “marketing content,” which in recent years has engulfed large segments of established media in the country. Semi-news items – interviews, features – are broadcast or printed as part of a financial transaction struck between the interested party, perhaps a government ministry or a real estate entrepreneur, and the media outlet (newspaper, website or commercial television station).

In proportion to the amount of the money that changes hands, the nave media consumer is fed a highly favorable report by the paying side, without said consumer knowing (because no one informed him) that this is hidden advertising, PR stuff, mere puffery. The usual result takes the form of ads or commercials underwritten by the payer. The biggest beneficiaries of this ploy in the shrinking Israeli media market are the Yedioth Ahronoth Group and Ynet, the two Channel 2 franchisees, Reshet and Keshet, and Channel 10. They all stand to lose a great deal if the present situation is changed.

In most enlightened countries, the hidden advertising issue has been regulated in one way or another. But not here. Rosenthal’s bill is far from revolutionary. It wouldn’t ban marketing content, but it would oblige media outlets to be transparent and make a full disclosure whenever they employ it.

Let’s say the Education Ministry or the Transportation Ministry has signed a contract worth a million shekels ($250,000) to purchase ads in a mass-circulation newspaper to promote some sort of campaign, and that in return the minister was promised, in addition, five magazine articles and uncritical coverage in general. Under Rosenthal’s bill, readers would be informed of this quid pro quo, perhaps by means of a footnote to the effect that the article they are reading is the result of a financial agreement.

So much for theory. Enter practical politics. Following the proper procedure, Rosenthal submitted the bill to the Ministerial Committee for Legislation about two months ago. The committee’s head, Justice Minister Ayelet Shaked (Habayit Hayehudi), didn’t fully grasp the economic implications of the proposal and postponed a discussion so she could study the material. The following week, she brought the legislation up for discussion, but then, Health Minister Yaakov Litzman, chairman of the United Torah Judaism party, then requested a further postponement. Agudat Yisrael, the faction to which Litzman belongs, has a newspaper, Hamodia, which, like other media outlets in the ultra-Orthodox, or Haredi, community, upholds the practice of publishing marketing content very piously.

Like other opposition MKs whose bills, however meritorious, are usually given a knee-jerk boot by the ministerial committee solely because of their party affiliation – Rosenthal wasn’t surprised by these developments. But there’s also another frustrated, behind-the-scenes player who has become the bill’s chief, albeit secret, promoter: Benjamin Netanyahu by name. Certainly the last politician one would suspect of having an interest in common with Rosenthal.

The pressure exerted by the bureau of the communications minister (Netanyahu) on the bureau of the justice minister to hurry and get the legislation approved made Shaked suspicious. That was another reason for her not to rush ahead. She realized that if Netanyahu was so eager to get Rosenthal’s bill passed, there must be, as the saying goes, something rotten in the state of Denmark.

What is left to say about the prime minister’s obsession with the media? It’s not by chance that he kept the communications portfolio for himself. Or that he made all coalition partners sign a declaration that they would not support any legislation relating to the media without the consent of the responsible minister – a result of the lesson he learned from the traumatic precedent in the last Knesset of a bill concerning Israel Hayom, the free, pro-Netanyahu newspaper financed by the casino billionaire Sheldon Adelson. Indeed, it’s not by chance that Netanyahu is focused – more than he is on ending the conflict with the Palestinians – on an ongoing effort to crush and suppress the free media in this country.

Rosenthal’s bill is everything Netanyahu could ask for himself and for Adelson. Israel Hayom takes pride in not using marketing content. Adelson’s worldwide network of casinos is the freebie’s business plan. And in any event, the paper’s front page and first few pages constitute marketing content promoting a well-known human product.

Not only does Rosenthal’s bill strike at the media outlets that Netanyahu is out to weaken or make his captives in his capacity as the regulator: It gives his beloved Israel Hayom a further advantage. The possible collateral damage – a certain loss for the Walla news portal, owned by Netanyahu’s good friend Shaul Elovitch – is not critical.

Netanyahu’s personal interest in getting this bill passed is so transparent that even he, the Emperor of India, who in this term of office has shed all restraint in many areas, understood that he had to keep his distance from the legislative process. So, not only has he not dared to submit a government-sponsored proposal in this spirit, he hasn’t even asked a Likud MK to act as his long arm and submit it as a private bill.

Thus, Miki Rosenthal is the perfect insurance policy for the prime minister: No one will accuse the MK of trying to promote a Netanyahu agenda. Still, some suspect that Rosenthal is trying to settle accounts with his bitter rival, Noni Mozes, publisher of Yedioth Ahronoth, where Rosenthal was a longtime senior editor. These days the two are at serious loggerheads, although Rosenthal denies it.

From right: MK David Bitan, Prime Minister Benjamin Netanyahu and MK Tzachi Hanegbi at a Likud faction meeting, May 2016.
Olivier Fitoussi

Studied indifference

Before last Sunday’s meeting of the Ministerial Committee for Legislation, the forum of coalition party leaders convened. Also present was the coalition whip, MK David Bitan, one of the Likud MKs closest to Netanyahu. They chatted about this and that, until at a certain stage Netanyahu turned to Bitan and said, perfunctorily, “David, is there a subject you would like to raise?”

“Ah, yes,” Bitan replied. He reported that Rosenthal’s bill would come up in the committee on legislation and elaborated its virtues. “It’s an important piece of legislation,” he said, “and the coalition should support it.” Some of the party leaders present were caught unprepared. Shas leader Arye Dery asked for a week’s delay to study the subject. Litzman explained his objections.

Bitan glanced at Netanyahu, who gestured to him to continue, according to one of those present. Bitan urged the ministers to instruct their representatives on the committee to vote for the bill. But the ministers asked for time “to familiarize” themselves with the issue. Bitan didn’t relent: “The bill has been on the agenda for a year, it’s time to move it forward.” The ministers remained unconvinced.

Netanyahu, who had said not a word during the discussion, thereby intending to signal his supposed indifference, saw that it was a lost cause. “Fine,” he said, “if everyone wants to study the subject, that’s legitimate. We’ll postpone.”

Bitan gave him a look of surprise. The abrupt retreat apparently didn’t fit in with his battle plan. “Mr. Prime Minister,” he said loudly, “I understood from you that this legislation is nothing less than essential.” “It’s all right, we’ll put it off,” Netanyahu repeated.

Bitan, naively or feigning naivete, pressed on: “But Mr. Prime Minister, you told me the time has come to pass it and that we have to insist.” Netanyahu looked embarrassed: “We’ll put it off,” he muttered. Bitan fell silent. The ministerial committee subsequently postponed discussion of the bill until November.

The next day, Rosenthal ran into Bitan in the Knesset and told him he was fed up with the repeated postponements. It’s clear to him that as long as Shaked – the darling of Yedioth Ahronoth, although that probably has nothing to do with it – heads the committee in question, the legislation is doomed. He’s now threatening to put the matter to a vote in the Knesset plenum next Wednesday, without first going through the legislation panel, which will ensure its defeat by the coalition majority.

I asked Rosenthal whether he’s counting on Netanyahu ordering Likud MKs to vote in favor or to absent themselves so that the bill has a chance to muster a majority. Maybe Bitan hinted something to him? Rosenthal didn’t reply explicitly. “I am putting the bill on the agenda,” he said. “What will be, will be.”

Finance Minister Moshe Kahlon at the annual conference of the Antitrust Authority, Airport City, January 26, 2016.
Ofer Vaknin

Home economics

Netanyahu’s willingness to give the economy and industry portfolio, which he holds, to Kulanu seems to signal the weakening of the unity-government option. Until not long ago, the prime minister said he would not forgo the portfolio, because he was ostensibly about to enter a regional peace conference that would bring at least half of the MKs from the Zionist Union into the coalition. Now, after the appointment of Avigdor Lieberman as defense minister (a post that Netanyahu promised to Zionist Union leader MK Isaac Herzog in their negotiations a few months ago), handing over the economy portfolio to Kulanu would signal to all concerned that a deal with Zionist Union is not in the cards in the foreseeable future.

This political move would seem to be at odds, however, with the current diplomatic buzz in the region. The Egyptian foreign minister’s visit to Israel this week, which was perceived as aiming to promote a peace conference, and the recent successive meetings of the indefatigable mediator between Israel and the Palestinians, Tony Blair, with the leader of Israel’s opposition and the prime minister have created an impression that something is afoot. Herzog is desperately looking for an excuse to leap onto the government bandwagon. That could be just the medicine for his intra-party troubles, but the dowry is shrinking apace.

There’s no cause for celebration in the ruling party, either. Likud folks have long since realized that they are doomed to make do with the crumbs that fall from the plates of the coalition partners. The economy and industry portfolio (which was once industry, trade and labor) will be sliced up. Labor will be returned to the Social Affairs Ministry, now headed by Haim Katz (Likud), and what will go to Kahlon is industry and trade. In return, the latter will forgo the environmental protection portfolio, which was vacated a month ago by Avi Gabbay, Kahlon’s former confidant and his cofounder of Kulanu, in protest of the firing of Defense Minister Moshe Ya’alon and Lieberman’s appointment. There’s a good chance that we’ll see Gabbay on the slate of Ya’alon’s party in the next election.

The industry-and-trade portfolio is set to go to Construction and Housing Minister Yoav Galant or to MK Eli Cohen, both from Kulanu. Environmental protection will be given to Likud’s Zeev Elkin, who gave up the Immigrant Absorption Ministry for the sake of bringing Yisrael Beiteinu into the coalition. Elkin had hoped to get the economy portfolio, even if it’s slashed to ribbons.

Kahlon deserves credit for extorting yet another hefty economic ministry from Netanyahu, which will bolster the empire he’s building in the Finance Ministry. Still, when it comes to weakening Likud, and blatantly ignoring the needs of its stalwarts, while strengthening the coalition, you don’t have to press Netanyahu very hard. He assents readily.

So, while such key Likud figures as Elkin, Yariv Levin and Tzachi Hanegbi are dividing junior portfolios among themselves, a kid like Eli Cohen is going to become housing minister.

Galant will likely be kicked upstairs, or horizontally, into the weakened Economy Ministry. The trade and industry portfolio is still considered more powerful than the Housing Ministry in its present incarnation, without the Israel Land Authority, which was torn from it and inserted into the Finance Ministry when the government was formed.

The reshuffle in Kulanu gives added fuel to the prevailing working assumption in the political arena: that Galant, who doesn’t get along with Kahlon, to put it mildly, is likely to run on the Likud slate in the next election as the senior security figure and its candidate for defense minister.

The last and only serious portfolio that remains in Likud’s hands is the Foreign Ministry. If the unity scenario is irrelevant now, Likud figures say, then Netanyahu’s excuse for retaining this ministry (so as to give it to Herzog) doesn’t hold water, either. At least three Likud ministers want the foreign affairs portfolio: Gilad Erdan, Yisrael Katz and Yuval Steinitz. Katz has a written promise from Netanyahu to be appointed one of the three senior Likud ministers. Erdan has a similar promise, apparently also in writing, that postdates Katz’s.

But Katz, the transportation minister, has leverage that Erdan, the public security minister, lacks: He’s chairman of the Likud secretariat. He can embitter the life of the party leader in various internal spheres. He’s also close to the other Katz (Haim, no relation), who as chairman of the party’s central committee also has the power to make trouble for the leader. Yisrael Katz had hoped to form an alliance with his two comrades Haim Katz and Zeev Elkin, and create an impressive threat to Netanyahu in the internal arena, which would be lifted if the demands of them all were met. As of now, he’s alone.

In any event, reader, Netanyahu should know that if he makes Yisrael Katz foreign minister, he will get Erdan as leader of the opposition in Likud and in the coalition.