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Competition Law and Policy in Israel

OECD Publishing, November 2011, Pages: 83

Israel adopted its comprehensive competition law, the Restrictive Trade Practices Law, in 1988, replacing a law dating from 1959 and embodying a new approach to promoting market competition. Hard core cartels are now prosecuted as per se violations, while other agreements are subject to rule of reason analysis. Block exemptions that excuse parties from obtaining specific exemptions for restrictive arrangements are based on EU models. In monopoly law, provisions like Article 102 TFEU (Treaty on the Functioning of the European Union) have been added to an earlier design keyed to market share.

Mergers are reviewed using a contemporary, effects-based analysis, but the Laws employment of market share as a criterion for notification does not conform to recommendations that criteria be objective. Although improvements in procedures have reduced the time expended to evaluate mergers, appellate review of IAA merger decisions has sometimes been delayed.

Pending amendments would focus the laws restrictive arrangements prohibition on conduct that impairs market competition, limit per se treatment to horizontal collusion affecting price, and provide more effective tools for addressing oligopoly markets. The proposals mirror and support the general trend to reduce the scope of per se and categorical treatment, as the IAA and the courts have become better able to assess competitive effects.

The Review of Competition Law and Policy in Israel was prepared as part of the process of Israel's accession to OECD Membership. The report describes the policy foundations, substantive competition law and enforcement experience, institutional structure as well as treatment of competition issues in regulatory and legislative processes. The review then examines these findings under three assessment themes: the current situation of competition policy and enforcement; the magnitude and direction of change in competition policy over the last 5-10 years; the extent of conformity with the particular OECD competition recommendations.

Executive Summary

1. Foundations

2. Substantive issues: content and application of the competition law
-2.1 Restrictive arrangements
--2.1.1 Horizontal restrictive arrangements
--2.1.2 Vertical restrictive arrangements
-2.2 Monopoly
-2.3 Mergers
-2.4 Unfair competition
-2.5 Consumer protection

3. Institutional issues: enforcement structures and practices
-3.1 Competition policy institutions
-3.2 Enforcement processes and powers
-3.4 International aspects
-3.5 Agency resources and priorities

4. Sectoral regimes and exclusions
-4.1 General principles of exclusion or special treatment
-4.2 Sectoral issues

5. Competition issues in regulatory and legislative processes

6. Conclusions and Recommendations
-6.1. Cartels and restrictive agreements
-6.2. Merger and monopoly issues
-6.3. Structural separation in regulated industries
-6.4. Market regulation
-6.5. International co-operation
-6.6. Intellectual property rights

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