Israeli Ministers Approve Major Reform of Antitrust Law

While easing other rules, legislation would widen definition of a monopoly to include companies that dominate their market even if they have less than a 50% share in that market

Israel's Economy Minister Eli Cohen works at his office in the Knesset, the Israeli parliament, in Jerusalem November 22, 2017.
RONEN ZVULUN רויטרס

Companies that dominate their markets, even if they have less than a 50% share in that market, could be subject to monopoly controls under legislation approved on Sunday by the ministerial legislative committee.

The reform, which is promoted by Economy and Industry Minister Eli Cohen and Antitrust Commissioner Michal Halperin, would bar dominant companies from exploiting their market power or engaging in predatory pricing.

The legislation, which will almost certainly be opposed by businesses when it reaches the Knesset, calls for changing the name of the "Antitrust Authority" to the "Competition Authority" and the "Antitrust law" to the "Competition Law."

Cohen and Halperin said the name changes were more than just semantics and reflect a new policy by the government that emphasizes competition, rather than seeking to enforce limits.

“The new law will require business owners to act with competitive responsibility while reducing the regulatory burden and easing the burden on small businesses,” Halperin said. “The amendment allows the Antitrust Authority to step up enforcement and impose significant sanctions on businesses that harm competition.”

The law currently defines a monopolist as controlling more than half of a market.The new standard would encompass businesses like Bank Hapoalim in banking and Super-Sol in food retail, as well as importers with exclusive rights to distribute in Israel.

On the other hand, the proposed legislation would ease penalties on violators. It calls for maximum jail time for violators of three years, even under aggravated circumstances, down from five years in the existing law.

However, the maximum financial penalty for violators will rise from a ceiling of 24.5 million shekels ($7 million) to as much as 8% of the company’s turnover, without any shekel ceiling.

One way the legislation will ease the regulatory burden on smaller businesses is by more frequently exempting companies that are undertaking small mergers. The proposed law would exempt mergers between businesses with combined turnover of 360 million shekels from needing approvals, which is up from 150 million today.