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The Tribunal may also call for the breakup of a monopoly into two or more distinct
business corporations, if the Director General has found that as a result of its existence
the public is significantly harmed and that such harm cannot efficiently be prevented
through regulating its activity.
The Director General recently proposed to amend the definition of ‘monopolist’ to
encompass any entity which holds market power.
Mergers
The legislativedefinitionof companymergers includes,but is not limited to,the following:
(1) Acquisition of the main share of the assets of a company by another company;
(2) Acquisition of shares in a company by another company that wouldgive the acquirer
more than a quarter of the nominal value of the issued share capital or of the voting
power, or the power to appoint more than a quarter of the directors or participate
in more than a quarter of the profits.
The merging parties are obliged to make a pre-merger notification of the transaction
and await the Director General’s consent, where one of the following criteria is met:
(1) The merger creates a monopoly market share for the parties to the merger in any
stage of the production chain of the product;
(2) One of the merging parties is (already) a monopoly;
(3) The combined sales turnover of the parties to the merger, in the financial year
preceding the merger, exceeds 150 million NIS, and the sales turnover of at least
two parties to the merger is 10 million NIS each.
Although the RTP Law sets a review period of 30 days, a longer examination period is
sometimes required before the merger is blocked, approved or conditionally approved.
Breaching the reporting duty or the waiting period by the merging parties could lead to
criminal and civil proceedings.
Restrictive Arrangements
Arestrictivearrangement isatradearrangemententered intoby legal entitiesconducting
business, under which at least one of them restricts itself in a manner liable to eliminate
or reduce the business competition between it and the other parties, or any of them, or
between it and an entity not party to the arrangement.
An arrangement is deemed to be restrictive if it involves one of the following matters:
(1) The price to be demanded, offered or paid;
(2) The profit to be obtained;
(3) The division of the market, according to the location of the business or according to
the persons with whom business is to be conducted;
(4) The quantity, quality or type of assets or services in the business.
The Law prohibits a legal entity from being a party to a restrictive arrangement unless
one of the following conditions prevails:
The Director General recently proposed a reform in the supervision of mergers,
where a general prohibition would apply to mergers where there is reasonable
concern of significant harm to competition. The merging parties would be
redirected to a self-assessment route and if the parties determine there is no
risk of harm to competition, they can execute the merger without applying to
the Director General for approval.