Major Reform Of The Israeli Competition Law

Author:Ms Tal Eyal-Boger, Roi Warhaftig and Shani Brown
Profession:Fischer Behar Chen Well Orion & Co
 
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The Knesset (the Israeli parliament) approved the Restrictive Trade Practices Legislative Bill (Amendment 21), 5779-2019

On January 1, 2019, the Knesset approved a significant amendment to the Restrictive Trade Practices Law (Amendment 21), 5779-2019 (the "Amended Law").

The Amended Law creates material and comprehensive revisions to the current language of the Restrictive Trade Practices Law, 5748-1988 (the "Restrictive Trade Practices Law" or the "Law"), including to key provisions of the Law, related to the Israeli monopoly control regime, the Israeli merger control regime, the enforcement mechanisms of the Law, and more.

The Amended Law constitutes one of the most comprehensive revisions made to Israeli competition law in more than three decades, and we expect it to have significant implications to companies acting in the Israeli market.

According to the Israeli Antitrust Authority (the "IAA"), the objective of the Amended Law is twofold: first, the Amended Law aims to intensify and focus the IAA's resources on activities which have the potential to cause damage to competition and to the public, as well as to strengthen the IAA's ability to act with all of its powers and with maximum efficiency in order to promote competition and decrease the cost of living. At the same time, the Amended Law aims to decrease the bureaucratic and regulatory burdens under the existing Law with respect to commercial activities which do not raise harm to competition concerns.

Following are the main elements of the Amendment:

An increase in the combined sales turnover threshold for the submission of notices of merger to NIS 360 million (approx. USD 96.1 m / Euro 84 m); An increase to the maximum administrative fines imposed on a company - up to NIS 100 million per violation (approx. USD 26.69 m / Euro 23.33 m); A new additional definition for a "Monopolist", based on market power (in addition to the current definition based on market share); Increased criminal penalties for restrictive arrangements - up to five years imprisonment (with no requirement for aggravating circumstances); A stricter obligation is imposed on officers in a company to supervise and to prevent competition-related violations; Below we further describe, in detail, the main elements of the Amended Law:

  1. The Increase of the Sales Turnover Threshold which Necessitates the Submission of Notices of Merger to the IAA (section 17(a)(2) of the Law) - to NIS 360 M (approx. USD 96.1 M / Euro 84 M)

    Summary of the amendment - the aggregated sales turnover threshold which necessitates the submission of notices of merger to the IAA was updated, so that if the aggregated sales turnover of the parties to the merger is greater than NIS 360 million (and not NIS 150 million - the aggregated sales turnover under the pre-amended Law) the parties will be required to receive the Director General's advance approval.

    In detail - The amendment provides...

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