Israel: A Competition/Antitrust Overview
In 2025, Israeli competition law saw several notable developments, chief amongst which was the intensified enforcement against companies in the food and retail sector and against importers. The year also featured prolonged review timelines by the Israeli Competition Authority (ICA), particularly in merger control. Moreover, the ICA has recently announced an additional hearing in a “concentration group” case in the Israeli banking sector, which is expected to have significant implications for the Israeli financial system. Finally, the ICA has been looking into certain passive investments of less than 25%.
Increased Scrutiny of the Israeli Food and Retail Industry
As in the previous year, the ICA focused particular attention on the food sector, vigorously enforcing both the Economic Competition Law (ECL) 5748-1988 and the Law to Promote Competition in the Food and Pharm Sectors, 5774-2014 (the “Food Law”).
As a result, for example, indictments were recently filed against senior executives in the food industry (retail chain managers) regarding price-fixing allegations. The ICA declined to indict several suppliers who were also investigated. The common denominator of all defendants is the conversations they held with one of the retail chain managers, allegedly attempting to bring about an across-the-board price increase in 2021. This is the first criminal indictment for price signalling through posts and media interviews.
Moreover, the ICA has several ongoing administrative fine cases of up to several tens of millions of New Israeli Sheqel on several food suppliers, including the Israeli Coca-Cola franchisee, for violations of the Food Law. The allegations include intervention by food suppliers in retailers’ shelf arrangements, interference with the consumer price, the transfer of payments and bonuses that fall outside the framework of the law, among others.
Heightened Enforcement Against Importers Operating in Israel
The ICA has recently stepped up the attention it pays to importers operating in Israel.
A key example is found in Section 31f of the Competition Law, a new and globally unique provision that grants the Competition Commissioner (the “Commissioner”) the authority to take both criminal and administrative actions against “direct importers” who reduce or harm competition from parallel or personal import. “Direct importers” are importers or distributors of imported goods who have an agreement with a goods manufacturer outside of Israel, or local franchise-manufacturers licensed by a franchisor outside Israel. The amendment creates a completely new “restrictive trade practice” which, to the best of our knowledge, has no equal anywhere else in the world, limiting freedom of action for direct importers operating in Israel, as it includes a series of new prohibitions on direct importers that stop them from taking actions that prevent or reduce competition from parallel and personal imports.
The Commissioner has already exercised her powers under this new amendment in several matters discussed below.
Most recently, the Commissioner notified an importer of branded, non-perishable products that, subject to a hearing, it will impose financial sanctions totalling approximately ILS10 million (around USD3,050,222) on the company for violations related to harmful parallel imports. Allegedly, the importer shared with the manufacturers abroad images and information about the existence of parallel imports in a way that allowed tracking of the supply chain of products imported in parallel, with the aim of enabling manufacturers to trace the suppliers of the product importers and take action to stop them.
Moreover, the Commissioner has published for public comment a consent decree with a food and candy importer, in the amount of ILS500,000 (around USD 152,511). Allegedly, a representative of the importer sent the manufacturer’s representative a photograph of a candy package with a sticker on the back with details of a parallel importer to Israel as well as details of the importer in the Netherlands. As a result, the candy manufacturer in Argentina stopped supplying the candy to the importer in the Netherlands, which also affected the parallel import of the candy from the Netherlands to Israel.
Prolonged and Intensive Review Procedures
In recent years, the ICA’s reviews have become longer and more intensive. Companies are receiving broader requests for information and enduring extended proceedings even for relatively small transactions. This trend raises concerns that the ICA may be devoting disproportionate resources to low-impact cases.
Careful Examination of Passive Investments
Lately, the ICA has taken a strict stance, scrutinising even passive holdings below 25%, while holdings above 25% require the submission of merger notifications.
An example is the case of Soglowek, which saw a group of investors that would acquire control of a target – a local meat products manufacturer. The ICA raised concerns stemming from the fact that one of the institutional investors held stakes in a PE fund that held control in the target company’s competitor. Ultimately, it was agreed that the institutional investor would acquire 15% instead of 21% of the target’s shares.
This decision may impact institutional investors in Israel and could have a broader impact on the operating model of investment funds in the country, as the Commissioner sought to pierce the corporate veil of an LP fund.
Similarly, in the case of MGroup, an insurance company wanted to acquire 24.9% of the municipal services company MGroup from a private equity fund. The insurance company had a joint holding in a completely different field with MGroup’s competitor. Due to that joint interest, and following contact with the ICA, the insurance company was required to acquire a smaller stake than the 30% it had initially intended to acquire.
In addition, in the case of Neema, sanctions of ILS40 million (around USD12,202,544) were imposed on two banks as part of a consent decree with the Commissioner due to their minority holdings in a fintech company, which the ICA perceived as a competitor of the banks. The ICA saw the minority holdings as a prohibited restrictive arrangement and noted that this is the highest amount ever agreed to be paid by a single company under a consent decree, which was reduced since the banks sold all their holdings in Neema.
A Possible Declaration of a “Concentration Group” in the Banking Sector
Recently, the ICA started a hearing regarding the possibility of declaring a “concentration group” – a unique Israeli legal construct aimed at handling oligopolies – in the banking sector, and imposing orders on the concentration group’s members.
Such declaration is very rare and significant in Israel. Since the chapter on concentration groups was introduced, there have been only three proceedings involving such groups, two of which did not end in a declaration, and it has not been used since 2013. A declaration on the banking sector will have far-reaching effects on the Israeli economy.
Conclusion
Overall, 2025 reflected assertive and interventionist ICA policy. Enforcement in the food/retail and import sectors intensified, and the ICA enforced new legal provisions and used existing legislation that had not been used for many years. Merger control review proceedings are now longer and more cumbersome, and even passive minority holdings face heightened scrutiny. Israeli and non-Israeli entities doing business in Israel thus face ever-increasing scrutiny and competition law enforcement risks.