The Israel Antitrust Authority said Sunday it aims to prevent companies from announcing price changes in advance, a practice it says firms have been using to coordinate prices.
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Companies would be banned from pre-announcing price changes both in everyday press statements and in talks with analysts and investors, the Antitrust Authority said in the draft of a policy paper.
The authority says such announcements can be as harmful as secret pacts, and that a public statement does not make a company immune from the law. The stipulations in the draft are in line with policy in countries in the Organization for Economic Cooperation and Development, of which Israel is a member.
“Information passed along in public statements could be used to preserve or coordinate cartel efforts, be they secret or in the open,” the Antitrust Authority said.
The prohibition applies to every industry and is expected to be strictly enforced in markets with little competition including the dairy sector, food, banking, cellular telephony and insurance.
One example of dubious behavior happened among food retailers in 2012. In August that year Unilever announced that prices would rise 5% to 6% after the Jewish holidays; the following month Osem unveiled a price hike for that November. In October, Tnuva and Strauss said prices would rise between 3% and 5% in November.
Also, in 2011, food companies allegedly used the media to coordinate a strategy against the social-justice protests. Another example of dubious behavior would be a comment by an executive that a competitor’s prices were “dangerous” and could “cause a market to collapse,” the Antitrust Authority said.
The ban would also apply to statements by mid-sized firms; for example: “We’re waiting for the big companies like Tnuva and Osem to raise prices, then we’ll try our luck too.”
The Antitrust Authority’s document will be open for public review until next month, when, after any changes, it will be implemented immediately.