Competition Law in Israel – What changes should European companies and firms be aware of?

Firstly, the lawyers we spoke to did highlight the current political situation, with some being concerned that it would reduce investment from abroad into Israel.  Initially, the Competition Authority took a very flexible approach, but as time has passed this has morphed into more of a “business as usual” approach.  One of the lawyers, mentioning the concerns around reduced international business, was hopeful that in future the Authority would lower the bar to allow more news companies to enter the Israeli market, but this has not happened yet.

While there will certainly be additional challenges because of the current situation, it appears as though it is not having a major direct impact on the competition law market.

The major sectors that the Israeli Competition Authority is focusing on are the technology, banking and food sectors.  For anyone who has dealt with the DMA or the global regulatory vagueness around AI, the focus on the technology sector will not come as a surprise, but it does seem that the ICA wants to match the approach taken by the European Commission and the US Department of Justice in this area.  A prime recent example in Israel has been the Authority’s investigation into Meta.

However, the areas that are more unique to Israel will be around the food and banking sectors.  Several lawyers mentioned that the ICA has been coming under increasing pressure as part of the cost-of-living crisis to investigate these two sectors closely, with high prices in the food sector and limited competition in the financial sector being areas of popular concern.  In these areas, the Authority is helped by specific powers that are not shared by many authorities in Europe, namely the Law to Advance Competition in the Food Sector (introduced in 2014) and the Law for the Promotion of Competition and Reduction of Concentration (passed in 2013).  The latter has been used recently to investigate the major banks in Israel in an attempt to declare the banking sector an oligopoly by showing that the major banking groups are a concentration.  The Authority has a strong focus on enforcing the “Food Law” currently in an attempt to fight rising prices, which means firms have been kept busy with requests for information, investigations and challenges to financial sanctions.

Merger clearance is also a key area of work in Israel with lawyers commenting on the increase in the number of mergers being reviewed or blocked, and on the fact that the reviews appear to be taking longer as the reviews become increasingly thorough.  Some firms attributed this to an aggressive attitude on the part of the presiding competition commissioner.  This is also linked to an increase in the number of fines for gun-jumping.  Again, the food and technology sectors are a particularly key area for investigations into proposed mergers, while the renewable energy sector is also experiencing a number of proposed joint ventures at the moment that need approval from the ICA.

Class actions is another area that may be familiar to clients and firms in Europe.  It is a well-established area in Israel, particularly around claiming damages following cartels, where the Interchange and Trucks cartels remain high-profile matters.  Previously there were a number of private enforcement actions around excessive pricing allegations, but these appear to have diminished following a recent Supreme Court ruling.

While there are still some obvious similarities between competition law in Europe and Israel, European companies and firms will need to be particularly aware of the “Food Law” and law on concentrations if they are hoping to do business in Israel in the near future.