Beefing Up the Antitrust Commissioner: Knesset to Vote on Taming Concentration of Economic Power

The Knesset Economic Affairs Committee yesterday supported a bill that would increase the Antitrust Authority's power to get tough with industries with low levels of competition. The bill would authorize the antitrust commissioner to declare that companies in an industry with low competition are subject to the heightened enforcement powers. This would apply when an insufficient number of companies have more than a 50% share in a market and there is either no competition between them or competition is limited.

The bill now goes to the Knesset for second and third readings. If the measure passes in these two votes, it becomes law.

 Ronit Kan - Moti Kimche
Moti Kimche

If the bill passes in its current form, it will authorize the Antitrust Authority to order companies to take steps to enhance competition.

In the event of cross-ownership between competitors, for example, the antitrust commissioner will be empowered to seek an order at the antitrust tribunal requiring that a stake be sold.

In the debate over the past year, regulatory agencies sought changes to the bill so their powers would not be diminished. The Bank of Israel's supervisor of banks, for example, opposed giving authority to the antitrust commissioner in the banking sector, where competition is considered weak.

The insurance commissioner at the Finance Ministry also sought unsuccessfully to secure veto power over antitrust action in his sector. The original version of the bill gave a veto right to the supervisor of banks and the insurance commissioner.

Other regulators lose veto

The Knesset Economic Affairs Committee, however, removed these exceptions. In the version approved by the committee, if regulatory agencies such as those in banking or insurance object to a declaration of economic concentration by the Antitrust Authority, the matter will be settled by the cabinet.

The revised bill also requires the Antitrust Authority to consult with sector-specific regulatory agencies, when they exist.

Five lobbyists attended yesterday's Economic Affairs Committee hearing, representing major firms from a number of industries including natural gas, banking, communications and cellular telephony.

At the hearing, officials from the central bank and the Association of Banks opposed the committee's changes to the original draft bill. The Bank of Israel's deputy bank supervisor, Or Sofer, called on the committee to defer its vote on the bill, saying that it was inconsistent with what had been approved by the Ministerial Committee for Legislation.

Committee chairman Carmel Shama-Hacohen (Likud ) countered that providing exceptions in the bill for the banking and insurance industries would gut the proposed law.

Retiring Antitrust Commissioner Ronit Kan said about the passage of the bill in committee: "The legislation has immense value from the standpoint of competition and the economy. The authority has been working on the bill for several years."

She said that "the antitrust commissioner has been given tools here to operate in markets where we see competition problems. It's a very significant farewell gift, and I'm leaving behind a major enforcement challenge to my successor."

Kan will be stepping down at the end of this month. The committee screening candidates to succeed her has narrowed the list to 10 from 30 names, according to a source close to the situation.

Sources at the Industry, Trade and Labor Ministry are denying rumors about the advancement of candidates identified with the interests of the rich. Industry Minister Shalom Simhon said he would announce his choice for the job on March 3.