Manufacturers May Set Minimum Prices, Says Antitrust Commissioner

Each case will be examined individually; new rule won't apply to monopolies

Antitrust Commissioner Ronit Kan has changed her mind: manufacturers may set minimum prices at which retailers may sell their products.

Until now Antitrust law had prohibited manufacturers from dictating prices to consumers, to prevent anticompetitive behavior.

The change in attitude will be reflected in law. A committee chaired by Prof. Zohar Goshen  has already prepared an amendment to existing Antitrust law, which has received Kan's approval.

The amendmend states that "horizontal" price-fixing (by several retailers) will continue to remain illegal, on the grounds that it is anti-competitive. However, "vertical" coordination of prices, meaning when the manufacturer dictates a minimum price to retailers, may be permissible: in each case, manufacturers will need to apply for approval and each case will be examined individually, the Goshen team recommends.

For instance, the importer of Crocs has come under Antitrust Authority attack, for forcing retailers to sell the shoes at no less than NIS 200 per pair. However, under the new rules, the importer could apply to the Antitrust Authority for permission to set that minimum price, and the commissioner would check whether the request is anticompetitive or now.

The change in rules will not apply to monopolies, however. They may not set minimum prices no matter what: there, the automatic assumption is that any such move would be anticompetitive.