Israel’s Consumer Protection and Fair Trade Authority Reduces Financial Sanctions

At the end of June 2026, in its Afikim Water ruling, Israel’s Supreme Court prescribed, for the first time, a clear test for calculating financial sanctions under the Consumer Protection Law. In our earlier update on the case, we reviewed the Supreme Court’s “act-based test” for counting violations and calculating financial sanctions.

The Consumer Protection and Fair Trade Authority (CPFTA) responded swiftly by publishing a legal statement and temporary enforcement directive to immediately implement the test and change how sanctions are calculated in practice. As the CPFTA rarely publishes statements, its quick response indicates the considerable significance it attributes to the ruling.

Legal Statement and Urgent Temporary Enforcement Directive

Until now, in cases involving a defect in a standard document, such as nondisclosure or misrepresentation in a contract, the CPFTA customarily counted each affected consumer as a separate violation, based on the view that each delivery of the document constituted an independent “act.”

The CPFTA’s new statement implements the Afikim Water ruling and provides that, going forward, a violation arising from defective wording in a standard document, such as an engagement contract or transaction cancellation terms, or on a dealer’s website, will be considered a single violation, regardless of the number of consumers who received the document.

Retroactive Application

The CPFTA’s statement clarifies that this relief does not apply only to future violations. It announced that it will revise downward the sanctions amount, through the State Attorney’s Office, in cases where the administrative proceeding has concluded and is now pending before the courts, as well as in proceedings that remain at the administrative stage. In these cases, it will no longer multiply sanctions by the number of affected consumers.

This means that businesses currently facing enforcement proceedings may benefit from an immediate reduction in the sanction amount.

Material Exception – Actual Financial Damage

Nevertheless, the CPFTA clarified that where a defect in a standard document has actually caused consumers financial harm, such as through an unlawful charge, and the CPFTA has evidence of that harm, it will continue to multiply the sanction by the number of affected consumers.

The distinction between a “technical” violation and a violation that caused actual harm will largely determine the scale of the exposure. The CPFTA also emphasized that this is a temporary mitigating directive that takes immediate effect, and that it reserves the right to adopt permanent and more stringent procedures in the future.

No Change in the Food and Retail Sectors

The CPFTA noted that it is making no change in the food and retail sectors, where specific methods are already used to count violations. These include the “categories method,” which permits up to 12 categories under inspection for failures to display prices, and the “catalogue number method” for price deception. These methods are already consistent with the principles of the ruling and have been upheld in extensive case law.

Implications for Businesses

The CPFTA’s statement, like the ruling itself, makes clear that the way violations are counted and classified can affect the amount of the sanction no less than the existence of the violation itself.

We recommend that businesses facing active enforcement proceedings, particularly where violations arising from a defect in a standard document are being multiplied by the number of affected consumers, assess whether they have grounds to seek a reduction in the sanction and contact the CPFTA.

Looking ahead, the key factor in determining the scale of the exposure will be whether the violation caused substantive financial harm to consumers. Above all, properly drafted contractual documents and compliant website interfaces remain the best protection, particularly because even a single defective template may still trigger a sanction.

Upcoming: Permanent Enforcement Procedures

The CPFTA noted that its statement is intended to apply until permanent enforcement procedures incorporating the principles of the court ruling are formulated. Those procedures will be published gradually to increase certainty, transparency, and uniformity. The CPFTA also emphasized that it reserves the right to adopt more stringent methods for counting violations in those procedures. Accordingly, the current temporary relief is not the end of the story, and businesses should continues to monitor future CPFTA announcements.

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Adv. Efrat Cohen is a senior partner and head of the firm’s Regulation Department.

Adv. Or Levi is an associate in the firm’s Regulation Department.

Barnea Jaffa Lande’s Regulation Department advises companies on preventive measures and the management of CPFTA enforcement proceedings. The department also helps clients assess their specific exposures and implement the adjustments needed to mitigate legal risk.