New Antitrust Chief Calls for Major Overhaul of Law

Gilo appointment still pending cabinet approval.

The cabinet will be asked at one of its upcoming meetings to approve the appointment of Prof. David Gilo as the next antitrust commissioner.

Gilo, 47, is a professor of law at Tel Aviv University and considered an international expert on antitrust matters. He is a member of the Antitrust Court. Industry, Trade and Labor Minister Shalom Simhon announced his decision to nominate Gilo on Sunday evening.

David Gilo
Ofer Vaknin

"If the committee on economic concentration decides to change the Antitrust Law and give the antitrust commissioner [the responsibility] for economy-wide competition, Gilo will will be happy to take on the job," said one of his confidantes yesterday. "In his view, he is supposed to serve the law."

The present Antitrust Law does not deal with competition that spans the entire economy or issues related to centralization and overall economic concentration. It only deals with competition within sectors of the economy. But because of the small size of the Israeli economy, a problem of large conglomerates owning relatively large chunks of the market exists. These huge conglomerates can easily move into new new sectors and increase their power and harm competition through their overall strength.

The present law does not prevent such expansion into new industries and businesses by already powerful companies or groups of companies. The cabinet has established a committee to investigate such issues.

In interviews before his nomination, Gilo said there was a need to act forcefully against powerful groups in the economy. His vision and plans impressed his audiences, including Simhon, sources said.

Gilo's plans include restricting such powerful groups, changing aspects of antitrust law that relate to restrictive trade practices and cooperating with international counterparts.

"Now it is time to wait and see if Gilo will carry out what he said he would," said one of the sources. Among other things, Gilo said it was necessary to fight loopholes in the law and the lack of good faith among powerful corporations. The most powerful conglomerates in Israel that harm competition need to be identified and laws should be drafted to limit their encroachment, Gilo is said to have told those interviewing him.

He also advocated improving internal enforcement within companies to make sure all employees understood the law, and in that way, minimize violations.

Gilo was one of two finalists for the antitrust job, the other being Boaz Golan, the chief legal counsel for the Antitrust Authority. Outgoing Antitrust Commissioner Ronit Kan announced her resignation in November 2010. Many antitrust experts were surprised not only that Gilo, known for his lukewarm views on antitrust issues, was chosen as one of the two finalists, but also that Maher Dabbah, an internationally acclaimed antitrust expert, was not on the shortlist.

Several weeks ago, the Movement for Quality Government in Israel sent a letter to a group of senior officials, asking them to examine numerous conflicts of interest on Gilo's part.

Gilo had worked and written legal opinions on behalf of a number of large firms on antitrust matters. Yesterday, the organization said it would be appropriate for Gilo to present his views publicly on two issues before the cabinet votes: On the question of cross-holdings between financial institutions and industrial and other businesses; and on the question of dismantling the pyramidical holdings of conglomerates. In addition, the organization asked that Gilo sign a conflicts of interest agreement if appointed to prevent him from dealing with issues related to companies he had dealings with before his appointment.

Most of Gilo's background in the antitrust field is academic. He has also written many legal opinions for companies on matters of antitrust law. In his academic papers and presentations, he gas tended to present both sides of the issue, but as antitrust commissioner, he is expected to take sides and set a clear-cut policy. One such case may be the purchase of the Maariv newspaper by Nochi Dankner's IDB group.

Gilo will be expected to spend much of his time as commissioner attending Knesset committee hearings and appearing before the cabinet on matters related to his position. The job also entails managing the authority and dozens of employees. Gilo does not have that much experience in management.

He will also have to find new senior staff for the Antitrust Authority, since, for example, Golan is expected to leave after being turned down for the post of commissioner. It is rumored that a number of other senior officials also plan to leave.

Gilo has a bachelor's degree in law and economics from Tel Aviv University and a doctorate in law from Harvard where he specialized in antitrust law.