Client updates

One of the key privacy protection issues in Israel is whether and to what extent the activities of an Israeli company may be subject to foreign privacy protection laws. This question has become of critical importance since the enactment of the General Data Protection Regulations in the European Union.

A significant precedent was handed down recently by the Israeli Supreme Court, whereby a company’s separate and independent standing must be recognized, even after a motion for a derivative suit has been approved.

Recently, the UK government pledged to introduce a new Data Protection Bill. The proposed bill will uphold the UK’s commitment to applying the privacy principles enshrined in the General Data Protection Regulation (GDPR) despite the Brexit process.

Recently, the Knesset approved an amendment to the Supervision of Financial Services Law, which regulates the activities of online lending platforms that broker between people and businesses under a peer-to-peer (P2P) model.

In early July 2017, the Knesset’s Constitution, Law and Justice Committee approved the elimination of the compulsory registration fees and periodic fees paid by database owners.

Recently, the Israeli Antitrust Authority (IAA) published a final version of its statement regarding Resale Price Maintenance (RPM) arrangements. In this statement, the IAA presents its position with regard to the circumstances under which a supplier is able to dictate the resale price of its products to its distributor (either retail or wholesale) for the next link in the supply chain, without such an arrangement being considered an illegal restrictive arrangement.

Recently, ILITA (the Israel Law, Information and Technology Authority) published new guidelines addressing the interpretation and implementation of provisions of the Protection of Privacy Law relating to direct mail and direct-mail services.

Recently, the Israeli Attorney General, in a legal opinion filed with the Israeli Supreme Court as part of an appeal filed by Facebook, opined that foreign companies (specifically those that do business via the internet) may not escape Israeli court jurisdiction even if the terms and conditions posted on their website state otherwise.

New rules came into effect recently that constitute an amendment and update of the principal rules addressing industrial wastewater flowing from factories into the sewer system.

On June 2017, the government of Israel approved a draft bill to amend the Securities Law that is intended to tip the scales in the battle being waged in the financial trading sector over binary options.

New court decision on transfer pricing taxation may shift structuring of M&A transactions from shares to assets.

Precedent set by the Tel-Aviv District Court rules that a bank may refuse to provide service to a company engaging in virtual currencies.

The Urban Renewal Law, which was promulgated at the beginning of April 2017, is attempting to regulate the phenomenon of obtaining apartment-owners’ signatures on undertakings towards developers and/or various entities (organizers) that are supposedly promoting urban renewal projects.

It is not uncommon for Israeli incorporated companies to seek investments abroad. In many cases, such investments are done through public offerings on international stock exchanges. Securities issued by Israeli companies are traded on the NASDAQ, the London Stock Exchange and a variety of other exchanges, including Australia. These situations, which make perfect sense from a business perspective, give rise to interesting and sometimes quite complex legal issues.

The Israel Innovation Authority (IIA) announced last week that it issued new directives regarding royalty payments and know-how transfer. These are the first significant directives to be issued by the IIA since it was established in January 2016 and the activities of the Chief Scientist were transferred to it.

There have been cases where bonuses have been paid by a controlling shareholder of a public company out of his own pocket to officers as remuneration for their work in the company. This raises the question as to whether a controlling shareholder is allowed to personally guarantee additional remuneration to officers of the company that is inconsistent with the company’s remuneration policy.

An amendment to the Securities Regulations (Periodic and Immediate Reports) was promulgated in March 2017, whereby small reporting corporations shall be able to publish their financial statements on a bi-annual basis, provided that they have not issued bonds that are being held by the public. In this regard, a “small corporation” is defined in the said regulations.

The Constitution, Law and Justice Committee recently approved the Privacy Protection Regulations (Data Security), 5767-2017, which enacts new and comprehensive norms for entities that manage or hold databases regarding data security procedures. In practice, these regulations affect many entities in the Israeli marketplace, from small businesses managing client information databases to large corporations.

The Israeli District Court of Tel Aviv ruled against global food giant, Nestle, and its subsidiary Nespresso in a claim filed by them in Israel against Espresso Club, an Israeli company, on the grounds of alleged copyright infringement, trademark violations, unfair competition and damage to Nespresso’s reputation.

The subject of discrimination in the labor market in general, and the subject of ageism in particular, has lately become a hot topic in the public discourse. A recent ruling handed down by the Regional Labor Court in Tel-Aviv in the Bat Sheva Simchi vs. Maabarot Products Ltd. case addressed the issue of age discrimination.