A Q&A guide to competition law in Israel.
The Q&A gives a high level overview of merger control, restrictive agreements and practices, monopolies and abuse of market power, and joint ventures. In particular, it covers relevant triggering events and thresholds, notification requirements, procedures and timetables, third party claims, exclusions and exemptions, penalties for breach, and proposals for reform.
To compare answers across multiple jurisdictions visit the Competition Country Q&A tool.
This Q&A is part of the PLC multi-jurisdictional guide to competition and cartel leniency. For a full list of jurisdictional Q&As visit www.practicallaw.com/competition-mjg.
Mergers and acquisitions are regarded as restrictive practices, which are regulated by the Restrictive Trade Practices Law 1988 (RTP) (mainly in Chapter 3).
All mergers are notified to, and reviewed by, the Israel Antitrust Authority (Authority). The Authority's decisions can be appealed before the Restrictive Trade Practices Tribunal (Tribunal) (see box, The regulatory authorities).
Mergers are defined as either (RTP):
The acquisition by one entity of most of the assets of another entity.
The acquisition by one entity of shares in another entity, which gives the acquiring entity:
more than 25% of the nominal value of the target's issued capital or the voting power;
the right to appoint more than 25% of the target's directors; or
the right to participate in more than 25% of the target's profits.
The Authority is not subject to a statutory limitation period with respect to administrative actions in relation to mergers. Criminal proceedings in relation to mergers, as wall as civil proceeding, are subject to a statutory limitation period (see Question 16)
An acquisition that falls within this definition must be notified if any of the following conditions are met:
As a result of the merger, the merged entity would be regarded as a monopoly (see Question 28).
In the fiscal year preceding the merger, both the:
merging entities' aggregate sales turnover in Israel exceeded NIS150 million; and
sales turnover in Israel of at least two of the merging entities exceeded NIS10 million each.
One of the merging entities already has a monopoly in any relevant (product and geographic) market.
A merger between non-Israeli entities falls within the scope of the RTP if these entities conduct business in Israel and meet the necessary thresholds (in relation to their activities in Israel only).
Once the threshold requirements are met (see Question 2, Thresholds), notification is mandatory.
There is no specific timing requirement. However, the parties must obtain approval from the Authority before implementing any action that might be regarded as constituting performance of the merger. Therefore, notification should be filed as soon as possible.
A pre-ruling procedure is available (RTP). However, the Authority is not obliged to provide informal guidance and any guidance given does not replace the duty to file formal notices and obtain formal approvals. In August 2004, the Authority published rules detailing the procedure for obtaining a pre-ruling decision (that is, guidance from the Authority before notification). The pre-ruling decision can cover whether a merger is notifiable or whether it is likely to raise substantive issues.
Each of the merging entities must file its own merger notice.
Notification is made to the Authority. In 2008, the Authority published Guidelines of the Controller of Restrictive Trade Practices with respect to notification procedures and examination of mergers of companies. These focus on the procedural review of mergers by the Authority and the policies and commentaries implemented by the Authority in connection with the notification duties and review of mergers under the RTP.
Notification must be submitted in writing on either a short simplified or long detailed form (Restrictive Trade Practices Regulations (Registration, Publication and Reporting of Transactions) 2004 (Regulations)).
The short form notification can be filed if certain conditions are met (for example, the parties' aggregate market share in the relevant product market must not exceed 30%). The notification must include details of, among other things, the:
Transaction.
Relevant product markets.
Market share of each party to the merger.
Customers and suppliers.
Major competitors in the market.
The long form requires the same information and other details, including, among other things:
Horizontally competing and vertically related products.
Arrangements with third-party competitors in the relevant market.
When either one of the parties' pre-merger share (or the parties' joined post-merger share) of a market relevant to the merger transaction exceeds 25%, the long form must also include details of:
Barriers to entry in the relevant market.
Quantitative and turnover market share in the two years before the merger.
Both forms allow the notifying party to apply for an exemption from the Authority for ancillary restraints contained in the merger transaction (see Question 11).
As of February 2013, merger notifications may also be submitted to the Authority online, through its website (see Online Resources).
There is no filing fee at present, but this may change.
The parties are globally barred from closing or implementing the merger until approved by the Authority.
The parties to a transaction must establish whether there is a merger within the meaning of the RTP and whether any of the thresholds apply and, if so, notify the Authority (see Questions 2 and 3).
The Authority's Economic Division primarily conducts the review process. It considers the information included in the merger notice and any accompanying letter, as well as any other relevant public information. It can also ask for the views of interested third parties, such as competitors, suppliers, customers and government ministries.
The Authority commonly requests the notifying parties to provide additional information. Once the Economic Division completes its internal report, the report is brought before an Advisory Committee for Exemptions and Mergers (Advisory Committee), which is authorised to review the Authority's recommendation and give advice.
The Controller of Restrictive Trade Practices (Controller) (the head of the Authority) must consult the Advisory Committee before clearing (or blocking) a merger, although its advice is not binding.
If the Authority intends to object to the merger, it usually holds an administrative hearing with the notifying parties. The Authority presents its views and allows the notifying parties to comment and/or provide further information.
If the Authority considers that the merger should be conditionally approved, it usually approaches the parties concerned with a draft of its proposed conditions. The parties can then comment on the proposed conditions to reach agreement.
The Authority must review merger notifications within 30 calendar days from the date that it receives the notifications of all parties to the transaction (RTP). It can request the Tribunal to extend this period. However, it usually seeks parties' consent to this, which, if given, avoids the need for Tribunal permission. If no response is issued by the end of the 30-day or extended period, the transaction is deemed approved.
For an overview of the notification process, see flowchart, Israel: merger notifications.
The Authority does not usually publicise merger filings or related information during the review process.
After a decision is given on a merger notification, the merger notices and the decision are registered in the Authority's registry, which is open for public inspection but does not contain information gathered or received by the Authority.
Information is not automatically kept confidential (see below, Confidentiality on request).
The notifying parties (and third parties) usually request that the information they supply to the Authority be kept confidential (the Authority usually respects this request). However, the Freedom of Information Act 1998 and a specific right of review under the Administrative Tribunals Law 2000 enable:
Third parties to review certain types of information under certain conditions.
The notifying parties to review information received from third parties during the merger review period.
A third party, on its own initiative, can give its opinion on the merger (in writing or orally) to the Authority, or provide any information it wishes to bring to the Authority's attention.
Access to documents is available after a decision is made (see Question 5, Procedural stage).
Third parties are not usually involved in the review process of merger notifications. However, the Authority can ask certain questions of, or request further information from, any third party (see Question 4, Procedure).
A merger is approved unless the Controller believes there is a reasonable danger that, as a result of the merger, either (RTP):
Competition will be substantially lessened (for example, if the merged entity will have a market share of more than 50%).
The public will be harmed by the price level, quality, quantity, regularity or terms of supply of a particular asset or service.
In its decision, the Authority can impose various conditions on the merging parties. Alternatively, it can suggest remedies to the parties for their acceptance during the review process and before reaching a decision.
The conditions can include:
The divestiture of certain assets or areas of activities.
Behavioural undertakings.
The RTP does not provide any specific procedure for monitoring and ensuring compliance with such remedies. The Authority can, however, specifically demand the parties in its decision to file periodic or other compliance reports or conduct random inspections to ensure fulfilment of any conditions. Failure to comply with a decision of the regulator, including conditions of clearance for the merger would also amount to a criminal offence, and may also constitute grounds for a civil tort based on breach of a statutory duty.
Failure to notify correctly, implementation before approval or failure to observe a decision of the regulator constitutes a criminal offence, the punishment for which is either:
Three years' imprisonment for an individual (or five years' imprisonment if the offence was committed under aggravating circumstances).
A fine of up to NIS2.02 million plus an additional fine of up to NIS14,000 for every day the offence continues for an individual, or double any of these sums for a corporate entity.
Criminal fines are only imposed by a court order following criminal conviction, which sets a period of imprisonment for failure to pay. If no order is made, non-payment is subject to general enforcement proceedings.
There is no criminal sanction invalidating the transaction, which remains valid under civil law unless the Authority applies to the Tribunal to invalidate it (section 25, RTP).
The failure to notify correctly, implementation before approval or failure to observe a decision of the Authority or tribunal, including conditions of clearance for the merger or remedial undertakings given, also constitute grounds for the imposition by the Authority of administrative fines in an amount not exceeding NIS1 million for a violating person or corporate, and up to 8% of a corporate entity's turnover, for a violating corporate entity whose turnover exceeds NIS10 million (in any event, the maximum fine to be imposed will not be more than NIS24 million).
See above, Failure to notify correctly.
See above, Failure to notify correctly.
The Controller's decision to approve a merger (unconditionally or under conditions) can be appealed to the Tribunal within 30 calendar days of publication of the decision in two daily newspapers. The right of appeal is granted to:
Any of the merging entities.
All persons liable to suffer an anti-trust injury because of the merger.
Business associations.
Consumer organisations.
The Controller's decision to decline a merger or conditionally approve it can be appealed to the Tribunal within the same period, by any of the merging parties.
The Tribunal can affirm or cancel the Controller's decision, or amend it or any of its conditions. The Tribunal's judgment can be appealed to the Supreme Court.
Both merging parties and third parties can appeal a conditional approval.
See above, Rights of appeal and procedure.
A non-compete covenant given by a party selling an entire business to the acquiring entity is not deemed restrictive, provided it does not conflict with reasonable and established practices (RTP).
In addition, certain types of ancillary restriction in merger agreements are automatically cleared if they meet specific conditions, set out in the Block Exemption for Restraints Ancillary to Merger Agreements 2009, for example:
A non-compete restraint for a period of no more than four years.
Supply assurance restrictions for no more than three years.
The parties must seek an exemption from the Authority or an approval by the Tribunal for restrictions that do not fall within the scope of the block exemption and that are not automatically cleared (see Questions 13 to 26).
No industries are specifically regulated. However, if a merger falls within the scope of any government ministry's responsibility, then the director general of that ministry is sent a copy of the merger notice and the Authority usually considers any opinion put forward by the ministry as a relevant (although non-binding) consideration.
Restrictive agreements are prohibited (unless approved in advance, exempt or excluded (see Questions 15 and 16)). They are regulated by the RTP (mainly in Chapter 2). They are unenforceable, and can be the basis for civil claims, including class actions.
In addition, it is a criminal offence to be a party to an unlawful restrictive agreement. The creation of a restrictive arrangement may give rise to criminal liability even if the arrangement itself is not put into practice or if it is unenforceable (see Question 14).
Moreover, being party to a restrictive agreement (unless approved in advance, exempted or excluded) or violating one of the conditions imposed by the Authority or tribunal for exemption or approval of such agreement, might subject the parties to such agreement to administrative fines in the amount and scope (see Question 9, Failure to notify).
A restrictive agreement is an agreement made between persons who manage businesses, under which at least one of the parties imposes a restriction on himself that is liable to prevent or reduce competition between himself and (section 2, RTP):
All or some of the other parties to the agreement.
A person who is not a party to the agreement.
A restrictive agreement automatically exists where there is a restriction on the (section 2(b), RTP):
Price being requested, offered or paid.
Profits to be earned.
Allocation of all or part of a market, by the:
location of the business; or
people, or categories of people, with whom business is to be transacted.
Quantity, quality or category of assets or services in a business.
These presumptions apply to both vertical and horizontal restrictions.
The Authority and the Tribunal are the main regulatory bodies that deal with all matters relating to restrictive agreements.
A restrictive agreement includes all types of agreements and understandings, whether formal or informal, oral or written, irrespective of whether they are legally binding and enforceable (RTP).
The RTP also applies to concerted practices and policies set by trade associations which affect their members, as well as to the conscious behaviour of a person who, knowing of the existence of a restrictive agreement, adjusts his activities to comply with all or part of the agreement.
There are two types of exemptions (RTP):
Individual exemptions. These can be obtained from the Authority, provided that the:
restrictions either:
do not restrict competition in a substantial portion of the market affected by the agreement (that is, the parties' aggregate market share is not substantial);
are likely to affect a substantial portion of the relevant market, but do not have a material effect on competition in that market.
object (or essence) of the agreement is not to reduce or prevent competition and all the restrictions are necessary for implementing this object.
Block exemptions. The Authority has issued several block exemptions, including a block exemption for (RTP):
agreements that have only a minor effect on competition, which means that:
the aggregate market share of the parties to the agreements does not exceed 15% in each market the agreements relate to;
if the parties to the agreements are competitors, their aggregate market share does not exceed 30% in each market the agreements relate to.
joint ventures;
agreements relating to the performance of joint research and development activities;
exclusive purchase agreements;
exclusive distribution agreements;
franchise agreements;
restraints ancillary to merger agreements (see Question 11);
arrangements between air carriers;
arrangements between affiliated companies where the agreement does not include another party;
operational arrangements between international maritime transportation carriers (this is a new block exemption which was introduced in 2012); and
arrangements between air transportation carriers engaging in the marketing of flight capacity to destinations subject to "open sky" arrangements (this is another new block exemption which was introduced in 2012).
A restrictive agreement is not prohibited if any of the following apply (section 3, RTP):
It is determined in accordance with the law.
It concerns the right to use certain IP rights (IPRs) and both:
the agreement is made between the owner of the IPR and the recipient of the right to use it; and
the IPR is registered in Israel, if required by Israeli law.
All its restrictions relate to the type of activities that the acquirer of a right to land is allowed to perform on that land and the parties to the agreement are the provider and acquirer of the right in the land, respectively.
It relates to the cultivation and marketing of certain categories of domestically produced agricultural produce, provided that all the parties are either growers or wholesale marketers.
It is between an entity and its subsidiary.
It is between a person who acquires an asset or a service and the supplier, and (provided that the supplier and the purchaser are not competitors):
all of the restrictions constitute an undertaking by the supplier to only supply those assets or services to the purchaser for marketing; and
there is a reciprocal undertaking by the purchaser to acquire those assets or services only from the supplier.
All its restrictions relate to international sea or air transport, or to a combination of international sea, air and land transport, and notice of the agreement was given to the Minister of Transportation. The parties to the agreement must be either:
air or sea transportation entities;
an air or sea transportation entity and an international organisation of aviation or maritime entities, approved by the Minister of Transportation.
However, this exclusion is no longer applicable, following an amendment to the RTP, in relation to air transport agreements between:
Israeli air carriers;
an Israeli air carrier and a foreign air carrier;
foreign air carriers (where at least one of them has activity or a representative in Israel).
The agreement must mainly relate to air transport to or from Israel. The restrictions relate to the activity (or refraining from it) in Israel by any of the parties to the agreement.
The exclusion continues to apply to:
international sea or air transport, or to a combination of international sea, air and land transport;
agreements approved by the Minister of Finance and the Minister of Transport for the purposes of preventing real damage to Israel's foreign relations, or for the purpose of safeguarding ongoing flying rights between Israel and other countries.
In addition, a new block exemption for arrangements between air carriers was published in November 2008.
It relates to an undertaking, given by a seller of the whole of its business to a purchaser, not to engage in the same line of business. The undertaking must not conflict with reasonable and established practices.
It relates to the employment of employees and the conditions of employment, and an employer or an employee organisation is a party to the agreement.
De minimis agreements or practices may be exempt (see Question 15). The parties should seek the approval of the Tribunal for restrictive agreements that are not excluded or individually exempted by the Authority, or which do not fall within the framework of a relevant block exemption.
Criminal offence of being party to an unlawful restrictive arrangement. The statutory period of limitation is either:
Five years.
Ten years, where the offence is committed under aggravated circumstances.
The limitation period can be suspended where the restrictive arrangement is continuous in nature. An investigation, an indictment or a legal proceeding can also postpone and suspend the limitation period.
Civil claim. The limitation period is generally seven years. This limitation period can also be suspended where the restrictive arrangement is continuous in nature. In addition, if the damage is part of the necessary elements of the cause of action, where the damage is latent, the limitation period starts to run from the date the claimant first discovered the damage. However, any claim filed more than ten years after the damage has occurred will be barred by the statute of limitation.
Finally, the limitation period starts from when the claimant first became aware of relevant facts for the cause of action if the:
Relevant facts were concealed from the claimant for reasons which were not related to him.
Claimant could not have prevented those reasons for the concealment even where he showed reasonable care.
Administrative fines. The RTP does not specify any statutory limitation period with respect to the imposition of administrative fines. The enforcement of administrative fines is subject to general judicial principles emanating from Israeli administrative and public law.
Any restrictive agreement is illegal and unenforceable unless exempt or approved (see Questions 15 and 16). Therefore, notification for exemption or approval is required in the relevant circumstances.
In certain cases, it is possible to obtain informal guidance from the Authority before filing a formal notification (see Question 3, Formal/informal guidance), particularly for those entities implementing a compliance programme of the RTP (this provides certain incentives to encourage entities to voluntarily adopt and implement internal compliance programmes ensuring proper enforcement of anti-trust laws). Informal guidance or opinion does not replace the requirement of a formal decision, if a duty to notify applies.
Each party to the restrictive agreement can initiate the notification procedure by filing an application to approve or exempt the restrictive agreement. Failure or refusal to notify by any party does not prevent the Tribunal or Authority from considering an application filed by another party to the agreement.
An application for approval must be made to the Tribunal and an application for exemption from the need to seek approval must be made to the Authority.
A written application for exemption is filed with the Authority and is based on a form prescribed in the Regulations. The application must include copies of all written documents, details of the agreement and reasons justifying an exemption.
An application for approval by the Tribunal is also based on a form prescribed in the Regulations, and the details and documentation required are essentially identical to those required for an application for exemption. However, in practice, the applications are far more elaborate.
The Authority does not currently charge a fee, but this may change. Applications before the Tribunal are subject to court fees (these are not significant).
Investigations can be initiated by the regulator itself.
Investigations can be initiated by a third party by making a complaint.
The Authority can decide to summon third parties or complainants for interrogation (either as suspects or witnesses) during a criminal investigation. Complainants can ask to make representations or be heard in an investigation based on their complaint, or in civil investigations.
Applications for an exemption by the Authority are reviewed in a similar manner to mergers when third-party involvement is concerned. Applications for an approval by the Tribunal take the form of court proceedings, and a third party must seek the Tribunal's approval to join the proceedings and comment on the application (approval is given only if the third parties have a further or different argument, which the respondent Authority does not already raise or deal with). In practice, third parties can approach the Authority and provide information on the application, and the Authority may use this information in its pleadings if it thinks fit.
Third parties or complainants do not have access to documents during an investigation.
See above, Representations.
There are no formal timetables for investigations. The Investigations Department of the Authority conducts criminal investigations and the Legal Department of the Authority then reviews its recommendations and processes. The Controller may then decide whether a criminal proceeding is in order (and her decision is subject to an appeal to the Attorney General), or whether any non-criminal methods are available (such as an administrative decision, a consent decree, and so on).
The Authority's Legal Department primarily conducts investigations, which may result in non-criminal methods or develop into criminal investigations.
When the Authority considers a notification for an exemption, the procedure is similar to merger reviews (see Question 4), but the Authority's Legal Department primarily does the review. In addition, the Authority has 90 calendar days from the date the application was filed to decide on the application, and it can extend this period by a further 60 days for reasons that must be recorded.
Unlike mergers, these periods do not include the time that passes from the day the Authority asked for further information to the day it receives this information. The Tribunal can extend the time period if special reasons are proven (section 38, RTP).
An application for an approval by the Tribunal of a restrictive arrangement is a court proceeding, which is conducted in accordance with the relevant procedural regulations, and is not subject to a binding timetable or limits.
The Authority does not usually make information it collects during investigations (criminal and civil), or the fact of an investigation, public during the investigation (although, in some cases, their existence, or raids on parties' offices are published).
Following an investigation, parties can review investigation materials, if an indictment was filed against them. Third parties or parties to other investigations can request documents under the Freedom of Information Act 1998, or if they have a right to file an appeal on the outcome of the investigation, under the Administrative Tribunals Law.
Notifications for exemptions or approvals are recorded in the Authority's registry (also available on its website (see box, The regulatory authorities)) when they are filed. The registry contains:
Applications (the Tribunal can order that certain details remain confidential, for example, for commercial secrets, and so on (see below, Confidentiality on request)).
Decisions given in relation to the application.
Other details prescribed in the regulations.
The Authority's registry is open for public review.
The Authority also publishes details of applications filed for approval by the Tribunal, in the official publication (Reshumot) and in two daily newspapers.
Specific materials (such as drafts and internal consultations in the Authority) are not made public.
The filing of an application for an exemption is kept confidential.
Parties can request that certain information (mainly trade or commercial secrets) filed by them in the applications or answers to the Authority's questions in other investigations be kept confidential, and the Tribunal can issue orders to ensure confidentiality (see above, Publicity).
The Authority can initiate a criminal investigation or an administrative inquiry. It has broad investigative powers, which are aimed at ensuring due and proper enforcement of the RTP, including:
Search and seizure.
Interrogation and request, and delivery of information.
Arrest and release on bail.
The Authority can enter into a consent decree instead of criminal proceedings (see Question 24, Orders and Fines), a draft of which is published for the public's review, and then filed for the approval of the Tribunal. The Authority can also exercise the leniency programme (see Question 24, Immunity/leniency). In appropriate cases, the Authority can accept an undertaking by parties to a case to cancel or change an arrangement suspected to be restrictive, without issuing an infringement decision or applying other enforcement powers.
The Authority has extensive means of enforcement, including:
An administrative determination, declaring that an existing or planned agreement between parties, or an existing or planned action by a trade association, is restrictive.
Applying to the Tribunal for an order to any person to refrain from any act that breaches the RTP, and to order any action necessary to prevent the breach.
Criminal proceedings before a competent court, which can lead to a fine or imprisonment of the same level as for mergers (see Question 9) (the Authority cannot issue fines in administrative proceedings, unless in the framework of a consent decree).
A consent decree between the Controller and any other person. This can include, without admission of liability, an obligation for the person to pay money to the State Treasury and an obligation to perform, or abstain from, a certain act.
As noted in Question 13, Scope of rules, being party to a restrictive agreement (unless approved in advance, exempted or excluded) or violating one of the conditions imposed by the Authority or tribunal for approval of such agreement, also constitute grounds for the imposition by the Authority of administrative fines in the amount and scope (see Question 9, Failure to notify).
Directors, managers or officers of an entity in breach of the RTP can be personally liable, unless they prove that both:
The offence was committed without their knowledge.
They took all reasonable steps to ensure compliance with the RTP.
An employee accused of an offence under the RTP is not liable if he can prove that he both:
Acted on behalf of his employer under his employer's instructions.
Believed, in good faith, that his act did not constitute an offence under the RTP.
Under certain conditions, managers, officers or directors of an entity who have elected to implement an internal compliance programme of the RTP are not liable.
In May 2005, the Authority published a leniency programme to encourage persons involved in restrictive practices to provide information to the Authority that could assist it in exposing restrictive agreements. In return, subject to the fulfilment of several conditions (such as being the first member of the cartel to come forward before an investigation has been initiated by the Authority), these persons obtain immunity from any fines or imprisonment resulting from their participation in the cartel.
Where restrictive provisions are not severable from the entire agreement, or where the nature of the agreement is to reduce or prevent competition, the agreement is void in its entirety.
Third parties can claim damages for losses suffered under regular civil rules and regulations.
The Controller can issue an administrative determination that provides, among others, that a restrictive arrangement exists (section 43(a), RTP). This constitutes prima facie evidence of its subject matter in any legal proceeding (section 43(e), RTP).
Class actions are also possible under the Class Actions Law 2006.
Third parties that may be harmed by a Controller's decision to exempt an arrangement (whether conditionally or unconditionally) can appeal to the Tribunal, within 30 calendar days from the date the decision is published. A decision to conditionally approve an application for exemption can also be appealed by any of the applicants to the Tribunal, within the same time frame.
However, it is presumed that the Controller's decision not to individually exempt a restrictive agreement must be appealed to the High Court of Justice rather than the Tribunal (no specific time limit is set). Since there is no specific right of appeal under the RTP for this kind of decision, the general rules of petitions on decisions by administrative agencies apply. Anyone that receives notice of an administrative decision under section 43 of the RTP can appeal it to the Tribunal (in practice, this will be the parties affected by the subject matter of the decision). The appeal must be applied for within 30 calendar days from the day on which notice was given.
The Authority's decision to start criminal proceedings can be appealed by the complainant to the Attorney General, and his decision can be appealed to the High Court of Justice.
The Tribunal's judgments can be appealed to the Supreme Court within 45 calendar days from the date the decision is received.
Any appeal can result in the affirmation, cancellation or modification of the decision or judgment under review.
Third parties that may be harmed by a Controller's decision to exempt an arrangement can appeal to the Tribunal (see above, Rights of appeal and procedure).
The RTP regulates (mainly in Chapter 4) monopolies and abuse of market power, both under civil and criminal law. The Authority and Tribunal are the main regulatory authorities.
The Controller can declare a certain person or entity to be a monopoly (RTP). However, the RTP monopoly provisions still apply to a monopoly even without a previous formal declaration. The main significance of the declaration is that it can be used in any legal proceedings as prima facie evidence of the existence of a monopoly.
The Controller can demand in writing that a monopolist (RTP):
File an application with the Standard Contracts Tribunal for approval of an existing, or proposed, agreement with customers or suppliers. If the monopolist fails to comply with the demand within a specified period, it is prohibited from using, or referring to, the agreement.
Comply with the Standards Law 1953 for any asset or service manufactured, sold, imported or provided by the monopolist, if its activity is subject to the standards specified in that law.
The following restrictions also apply (RTP):
A monopolist cannot unreasonably refuse to supply the asset or service for which it holds the monopoly. This duty also applies to a monopolist's refusal to purchase an asset or a service for which it holds the monopoly.
A monopolist may not abuse its position in the market in any manner liable to reduce business competition or injure the public.
If the Controller concludes that a monopoly injures competition or the public (or that significant public injury may be caused), he can instruct the monopolist to take certain measures to prevent the injury. The monopolist can file an appeal with the Tribunal and, the Tribunal may stay the instruction to the monopolist, until a final decision is rendered in the matter or until such other date as shall be determined by it.
If the Controller cannot prevent injury to competition or the public by directing the monopoly's operations, he can apply to the Tribunal to dissolve the monopoly into two or more separate entities.
In 2011, a draft bill published in 2008, which concerns "concentration groups", was enacted. The Controller is now entitled to determine that a group of persons who manage businesses and who possess a concentration of more than one-half of the supply of assets or provision of services or their purchase in a specific sector be regarded as a concentration group if the following apply:
Among the members of the group or in the specific sector in which they operate, there is either little business competition, or the conditions for little business competition exist.
The implementation of certain measures might:
prevent harm or the fear of substantial harm being caused to the public or to business competition among the members of the group or in the specific market in which they operate;
substantially increase competition in the sector or establish conditions for the substantial increase of competition in the specific sector.
The RTP also empowers the Controller to issue orders to members of the concentration group, whether in whole or in part, concerning the steps they will need to take to:
Prevent harm or the fear of substantial harm being caused to the public or to business competition among the members of the group or in the sector in which they operate.
Substantially increase competition among the members of the group or in the sector.
Establish conditions for the substantial increase of competition in the sector.
A monopoly is defined as a concentration of a market share in Israel that exceeds 50% (no proof of market power is necessary) (RTP). The Minister of Trade and Industry can lower this threshold for a particular market.
Several categories of behaviour are deemed abusive, including (RTP):
Unfair (that is, predatory and, presumably, excessive) pricing of the product under a monopoly.
Reducing or increasing the quantity of assets or scope of services offered by the monopolist, outside the framework of fair competitive behaviour.
Discriminatory practices that involve setting different terms for similar transactions, which are likely to give certain customers or suppliers of the monopolist an unfair advantage over their competitors.
Tying agreements.
The Authority will issue orders to eliminate damage (including instructions on how to achieve this) caused by monopolistic behaviour if it adversely affects any of the following:
Price, quality, quantity, regularity and conditions of supply of a product under a monopoly.
Fair competition in businesses.
There are no explicit exclusions or exemptions for monopolies or abuse of market power. However, the Tribunal has ruled that, in appropriate cases, a specific exclusion can arise if it is proven that the monopolistic behaviour results from a law that overrides the RTP.
There is no duty (or possibility) to notify in relation to monopoly issues, since the Authority or the Tribunal cannot clear them. The Authority can provide, in appropriate cases, informal guidance on a specific query as to whether certain conduct may be considered abusive (see Question 3, Formal/informal guidance).
The investigations and procedures that apply are the same as for restrictive agreements (see Questions 18 to 21 and 23) other than in relation to the notification procedure, which is not applicable.
The Authority's powers of investigation for monopolies and abuse of market power are identical to those for restrictive agreements (see Question 22).
An abuse of market power is a criminal offence, punishable by three years' imprisonment (or five years if committed under aggravating circumstances) for an individual and a fine (see Question 9). It is also a civil tort, which may give rise to civil claims (including class actions) seeking damages, injunctions or other civil remedies available under Israeli law. The Controller can issue a declaration that certain behaviour constitutes abuse of market power, which may then be used as prima facie evidence in any legal proceedings.
An unreasonable refusal to supply the asset or service, for which it holds the monopoly, or abuse of market power or violating an order issued by the Controller, also constitute grounds for the imposition by the Authority of administrative fines (amount and scope detailed in Question 9, Failure to notify).
Third parties can claim damages for losses suffered as a result of abuse of market power under regular civil rules and regulations.
Competition matters, including abuse of market power, can be brought before civil courts within the framework of civil proceedings and class actions that involve causes of action in tort under the RTP. An administrative determination issued by the Controller regarding the existence of a monopoly or abuse of market power can be used as prima facie evidence of its subject matter in any legal proceedings (see Question 25, Special procedures/rules).
Class actions are also possible under the Class Actions Law 2006.
Not applicable.
There is no formal legal definition for a joint venture, which is broadly defined as an agreement to co-operate. Joint ventures are usually regarded by the Authority and Tribunal as restrictive agreements, especially if held between competitors, and are dealt with in the same manner. However, the Authority can treat a joint venture as a merger, if it appears to be a merger rather than an agreement to co-operate.
The Authority has issued a block exemption for joint venture agreements, which applies in certain circumstances.
The Authority is a party to a treaty for the exchange of information and co-operation on anti-trust matters with the US anti-trust authorities, and a similar treaty with the European Commission, although the latter has not yet been signed. The Authority has informal relations with many competition authorities worldwide. The Authority is also a member of the International Competition Network and the Organisation for Economic Co-operation and Development.
During 2011, the Controller issued a draft official statement offering a "safe harbour" from the enforcement of criminal proceedings to companies and their office holders that were involved in the unlawful execution of mergers without submitting merger notices or without obtaining the prior approval of the Controller. This official statement only concerns mergers that do not raise substantial competition concerns, and will require, among others, a payment of money to the state treasury.
During 2012, the Controller issued a draft new block exemption that is intended to apply to arrangements that are not horizontal and which do not contain restrictions regarding price. In terms of the draft, such type of arrangements will be exempt from obtaining the Tribunal’s approval, if:
The restrictions in the arrangement do not limit competition in a substantial part of the market affected by the arrangement, or may limit competition in a substantial part of the market as aforesaid, but do not substantially harm competition in such market.
The essence of the restrictive agreement does not reduce or prevent competition, and the arrangement does not contain restrictions that are not essential for its implementation.
In 2013, a draft bill regarding the exclusion to growers and marketers engaging in the cultivation and marketing of certain categories of domestically grown agricultural (see Exclusions) was published. According to the draft bill, the exclusion will be limited, inter alia, to the actual growers, and will not be granted to wholesale marketers that are not growers.
Description. This is the official website of the Israel Antitrust Authority. The website contains updated version of:
The RTP and other relevant legislation.
IAA guidelines and rules as well as press releases, regulations promulgated under the RTP (including block exemptions), case law by the courts and the Tribunal in civil and criminal proceedings, and official registries managed by the IAA which are open for public review (mergers, monopolies, exemptions and approvals for restrictive arrangements, consent decrees etc).
All materials are formally published in Hebrew only. Portions of the materials may be found informally translated into English at www.antitrust.gov.il/eng/ however, they are not frequently updated.
Head. Professor David Gilo (Controller of Restrictive Trade Practices and Controller or the Director General of the Authority)
Contact details. 22 Kanfei Nesharim Street
PO Box 34281
Jerusalem 91341
Israel
T +972 2 655 6111
F +972 2 651 5330
E jerusalem@antitrust.gov.il
W www.antitrust.gov.il/eng/
Outline structure. The Authority is the administrative authority that oversees competition in Israel. It is headed by the Controller, who is appointed by the government, on the recommendation of the Minister of Trade and Industry.
The Authority mainly comprises a:
Legal Department.
Economic Department.
Criminal Investigations Department.
Responsibilities. The Authority is responsible for the administrative and criminal enforcement of the Restrictive Trade Practices Law 1988 (RTP). It has broad powers to initiate and conduct criminal investigations of alleged breaches of the RTP, and to initiate administrative inquiries.
The Authority can:
File indictments and institute administrative actions against violators of the RTP with the Tribunal.
Review and decide on merger notifications.
Grant individual exemptions from the obligation to have a restrictive agreement approved by the Tribunal.
The Controller can:
Issue administrative determinations stating that certain activities are illegal or that a specific transaction should be regarded as a merger of entities within the meaning of the RTP.
Declare that a certain agreement is restrictive.
Impose administrative fines.
Issue block exemptions for restrictive agreements.
Issue a declaration on the existence of a monopoly and establish rules of conduct for monopolies.
Recommend the signing of a consent decree between herself and any other person, rather than initiating criminal, administrative or judicial proceedings. A consent decree must be submitted for the approval of either the competent court dealing with offences under the RTP or the Tribunal.
Procedure for obtaining documents. The Controller can obtain information by conducting search and seizure activities or interrogations, or by requesting that certain information be delivered to her. Third parties can request to view applications filed with the Authority using, among other things, the provisions of the Freedom of Information Act 1998.
Head. Nava Ben-Or (district court judge)
Contact details. The District Court of Jerusalem
40 Zalah-a-din Street
Jerusalem
Israel
T +972 2 628 1284
F +972 2 629 2522
W www.court.gov.il (main website for the Judicial Authority)
Outline structure. The Tribunal is formed from district court judges and public representatives.
Two district court judges are appointed to the Tribunal (in addition to their usual district court responsibilities), for a single term of three years (which can be renewed for additional terms), by the Minister of Justice in consultation with the President of the Supreme Court.
The public representatives are appointed by the Minister of Justice on the recommendation of the Minister of Trade and Commerce for three-year terms (which can be renewed for up to three consecutive terms). A total of up to 17 Tribunal members can be appointed at any one time.
A Tribunal panel is formed from this pool of professional and non-professional members in each individual case. Most proceedings are presided over by one of the judges (who acts as chairman of the panel) and two public representatives. However, the professional judge can decide that the hearing be presided over by a single judge (which would be the head of the Tribunal or his deputy).
Responsibilities. The Tribunal serves as a court of appeal to decisions given by the Authority, including administrative fines. It can affirm the Controller's decision, amend it (or any of its conditions) or cancel it. The Tribunal's judgment can be appealed to the Supreme Court.
The Tribunal also acts as a court of first instance:
By application, to approve restrictive agreements that are not excluded or exempted by the Controller (section 7, RTP).
To split up entities that have merged in contravention of the RTP provisions (section 25, RTP).
To order, on the application of the Controller, the dissolution of a monopoly into two or more separate entities (section 31, RTP).
The district court judge or, in his absence, another judge of the Jerusalem District Court can, at the Controller's request, order any person to refrain from performing any act that violates the RTP (section 50A, RTP).
The Tribunal or competent court dealing with offences under the RTP can approve a consent decree submitted to it by the Controller (section 50B, RTP).
Competition matters can also be brought before the regular courts within the framework of civil proceedings and class actions that involve causes of action in tort under the RTP. Criminal charges are filed with the Jerusalem District Court.
Procedure for obtaining documents. The procedure for obtaining documents follows the procedural regulations that apply to Israeli Courts and Administrative Tribunals.
T +972 3 567 0614
F +972 3 566 0974
E hagaid@s-horowitz.co.il
Professional qualifications. Israel, Advocate. Admitted to the Israeli bar in 1997.
Areas of practice. Hagai Doron heads S. Horowitz & Co.'s anti-trust and competition practice which has a comprehensive anti-trust practice that includes strategic counselling on all aspects of competition and trade regulation law, including cross-border mergers, result-orientated negotiations with the anti-trust authorities and anti-trust-related litigation for domestic and foreign clients.
Hagai Doron is consistently ranked as a leading and highly recommended lawyer in Israel in the field of anti-trust by all major international directories, including GCR, Chambers, 'The International Who's Who of Competition Lawyers', Which lawyer? etc.
Non-professional qualifications. B.A. (summa cum laude) Economics, University of Haifa, Israel, 1996
Recent transactions
Languages. Hebrew, English
Professional associations/memberships. Lex Mundi Competition and Trade Practice Group.
