An amendment to the Restrictive Trade Practices Law sponsored by Minister of the Economy and Industry Eli Cohen and the Antitrust Authority passed first reading in the Knesset yesterday.
The main aim of the amendment is to strengthen the deterrent power and the effectiveness of the Antitrust Authority and to focus its activity on promoting competition and reducing the cost of living. Under the provisions of the amendment, the bureaucratic burden on entities that do not harm competition will be removed in order to let businesses that act fairly boost economic growth.
The amendment seeks to update the law to take account of substantial changes that have taken place in the Israeli economy since it was enacted thirty years ago, and also to bring Israeli law closer to international antitrust practice.
The main proposed changes are:
- Broadening of the definition of a monopoly owner subject to the obligations and prohibitions in the Restrictive Trade Practices law so that it will include anyone with significant market power, even if his market share is below 50%. The current law stipulates a market share of over 50% as the sole criterion for being a monopoly owner.
- Reduction in the obligation to report small mergers to the Antitrust Commissioner. The financial threshold necessitating reporting will be raised from a joint turnover of NIS 150 million to a joint turnover of NIS 360 million. The rise in the threshold flows from the substantial growth in the Israeli economy since the current amount was set in 1999, and also from the fact that the regulatory burden of supervision of mergers in Israel is high in comparison to other OECD countries.
- Abolition of the NIS 24.5 million limit on sanctions against those found in breach of the law. Businesses in Israel will subject to a maximum sanction of 8% of sales turnover. The current situation unjustly benefits large corporations, with turnovers in the billions of shekels. The amendment will lead to stronger deterrence and enforcement in relation to the largest businesses in the Israeli economy.
- As far as binding arrangements (cartels) are concerned, the reform will continue the trend of reducing the need for bureaucratic approvals and a switch to a prohibition on arrangements that harm competition.
- Equalization of the examination periods for mergers and cartels: a substantial shortening of the decision time on applications for exemptions for cartels from 90 days to 30 days, similar to the time set for decisions on mergers. The Antitrust Commissioner will have the power to extend the decision period by a further 120 days in cases in which the examination is complex and requires more time.
- The name of the law will be changed from the Restrictive Trade Practices Law to the Competition Law, and similar changes will be made to the names of the Restrictive Trade Practices Tribunal, the Antitrust Commissioner and the Antitrust Authority.
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Minister of the Economy and Industry Eli Cohen said, "This is a further step reducing the excessive bureaucratic and regulatory burden and making life easier for business and commerce. The reform will enable the Antitrust Authority to make its enforcement activity more effective and to devote its resources to promoting competition and strengthening deterrence against monopolies and other entities that harm competition."
Antitrust Commissioner Adv. Michal Halperin said, "The law in its new format will oblige business owners to act responsibly as far as competition is concerned, while at the same time reducing the regulatory burden and easing regulations for small businesses. The amendment will allow the Antitrust Authority to boost enforcement and apply significant sanctions to businesses that harm competition."
Published by Globes [online], Israel business news - www.globes-online.com - on May 22, 2018
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