Israel's Antitrust Chief Urges Consumers to Organize Boycotts

'Organized boycotts can rein in rising prices,' says Israel Antitrust Commissioner David Gilo. 'An occasional boycott is not enough.'

Bloomberg

Antitrust Commissioner David Gilo called on consumers Monday to organize boycotts to pressure merchants and manufacturers to reduce prices.

“Organized boycotts are a welcome phenomenon that can rein in rising prices,” Gilo said, speaking at a meeting of the Knesset Finance Committee on cost-of-living issues. “An occasional boycott is not enough. Consumers need to undertake a personal boycott every day, to vote with their feet and compare competing prices.”

Gilo acknowledged that Israel suffers from a high cost of living and from economic concentration, for which he blamed a “mistaken worldview shared by the government and lawmakers that has existed for decades in our country.”

In front of an audience that included a handful of lobbyists from the food industry, Gilo said officials had failed to make the high cost of living a priority and had enabled monopolies to develop.

“One of the things the government and lawmakers have still not succeeded in solving — and it is very important to do so — is the phenomenon of strong workers committees at government monopolies that use their power to strengthen monopolies, deter competition and hurt the consumer,” Gilo said, citing the Israel Electric Corporation as a prime example.

David (Miko) Zarfati, who heads the electric company’s workers committee, accused the government of opening the electric power market to powerful business leaders, citing private power produces like OPC, controlled by the Ofer family, and IPM, controlled by Shari Arison.

“The tycoons entered the electricity market and that didn’t cause rates to fall,” said Zarfati. “Everywhere in the world where private competition has been introduced, electricity prices haven’t fallen but risen.”

Gilo told the committee that the Antitrust Authority was turning its attention to the health care industry.

“Our initial examination of the health care market shows that there are competition problems,” he said. “The lack of competition is enriching providers of health care services.”

In the agriculture industry, Gilo faulted the government for adopting a policy of minimal subsidies for growers while allowing them to form cartels that let them exploit consumers by maintaining high prices.