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agreements), certain horizontal arrangements (e.g., certain joint ventures) or other
types of arrangements (e.g., intragroup agreements). However, contracting parties'
ability to rely on these exemptions should be carefully reviewed, as most are subject
to requirements (including market share thresholds). Parties to an illegal restrictive
arrangement are exposed to potential criminal, administrative and civil sanctions.
Merger Transactions
Merger control law applies, among others, to the acquisition of the principal assets
of the target (including the acquisition of a line of business) or acquisition of more
than 25% of either the outstanding shares, voting rights, rights to appoint directors
or dividend rights of the target company. A merger must be notified to the IAA if
at least one of three thresholds is met (a turnover threshold, monopoly threshold
and merger-to-monopoly threshold). Failure to notify a merger exposes parties to
potential criminal, administrative and civil sanctions.
The IAA is granted an initial 30-day timeframe to reviewmergers,subject to extensions.
The IAA proposed a significant overhaul of merger control rules, which is still at a very
early legislative stage.
Monopolies
A firm is deemed a monopoly if it controls more than 50% of a relevant market. The
Commissioner is empowered to issue declaratory proclamations, which serve as
evidence sufficient to establish fact until proven otherwise (prima facie evidence) in
any legal proceeding that the firm in question is indeed a monopoly. Recently, the
IAA advocated for an amendment to the Antitrust Law, which would subject firms
possessing market power to the Antitrust Law's monopoly provisions even if their
market share falls short of 50%. This legislative initiative is still in its infancy.
The main monopoly prohibitions are refusal to deal and abuse of dominant position.
The latter consists of (a) a general prohibition on abusing dominant position in a
manner that may decrease competition or harm the public and (b) certain actions that
are considered per se abuses of monopoly position (e.g., predatory pricing, tying and
price discrimination). The IAA can issue directives to monopolies in order to prevent
potential harm to competition or the public.
Concentration Groups
In order tobetter combat lowcompetition in oligopolisticmarkets,the Israeli legislature
introduced a major revision to the Antitrust Law several years ago. The revision
authorizes the Commissioner to declare that a group of competitors dominating more
than 50% of a market are a "concentration group," provided that (a) there is limited
competition or there are conditions for limited competition between group members
and (b) there are remedies capable of preventing harm to competition or increasing
competition in the market. With this authority, the Commissioner can act as a super-
regulator of themarket and applymeasures needed to increase competition or prevent
further harm (e.g., decreasing barriers to entry or expansion by forbidding the use of
long-termcontracts, terminating facilitating practices like information exchanges). The
Antitrust Tribunal is authorized to issue more drastic instructions such as mandating
the divestment of holdings (even minority holdings) in a competing firm.
Additional Competition Legislation
While the majority of competition legislation resides within the Antitrust Law, there
is also legislation that deals with certain market characteristics and regulates specific
sectors.