Insights & News / Gal Rozent

The high fine spares Meta an official determination by the Israel Competition Authority that it violated competition law by failing to report mergers, and serves as a “warning sign” to other international corporations that may not be sufficiently familiar with the obligation pursuant to Israeli law to report a merger if the company fulfills the monopoly criterion.

According to the Competition Authority’s Director General, the negative covenants included in the merger agreement between Strauss Group and Wyler Farm raise concerns of harm to competition, and the parties began implementing the merger before receiving approval.

The amendment is part of the government’s efforts to bring down the cost of living by increasing competition in the import sector. However, the amendment also imposes considerable restrictions on direct importers.

As part of a series of measures to combat the cost of living, the Israel Competition Authority’s Director General is taking broad law enforcement measures for the first time against major food suppliers for violations of the Food Law. Inter alia, the Food Law prohibits food suppliers and retailers from engaging in various commercial arrangements that could prevent small suppliers or retailers from competing. 

This is not the first time the Israel Competition Authority has imposed sanctions on companies that fail to respond adequately to its demands for data. However, this is the highest sum ever imposed for such a violation and approaches the maximum the ICA’s Director General may impose in this regard.

The Israeli government is continuing to amend the Competition Law with the intention of curbing the cost of living. In the crosshairs are direct importers, who will be subject to strict scrutiny once the amendments are enacted.

The Israeli Ministry of Finance and the Competition Authority are pushing to introduce a plan in the annual Economic Arrangements Law that would impose significant restrictions on importers and suppliers of major brands, with the aim of reducing concentration and increasing competition in the food and toiletries market in Israel.

The Israeli Competition Director General fined MBI and company officers after they spiked the price of a life-saving drug called Leadiant by hundreds of percentage points.

The Israeli Competition Authority believes its authority to issue information requests is not limited to Israeli companies, and that foreign companies with no affiliation to Israel are also subject to its authority and to fines for breach of the Competition Law. 

Israeli district courts have already recognized the possibility of suing a monopoly for charging an unfair excessive price, but the Israeli Supreme Court’s recognition of this cause of action ends defendants’ potential arguments for opposing this very possibility.

The striking innovation in this draft bill is that, upon its enactment, monopolists, even if not declared as such, must publish their financial statements, even if they are not reporting companies.

The Supreme Court issued a ruling in principle that it sees no merit in the approach of releasing a person who breached the law from criminal liability based on the fact his or her lawyer failed to warn that the planned action was criminal.

The new format heralds a reduction in the volume of transactions that require reporting. However, it imposes a far heavier burden on parties to transactions that do require reporting, even for mergers posing no competitive concerns.