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Israel: Amendment Allows Forced Sale of Assets of Monopolies That Threaten Competition

(Jan. 26, 2015) On November 17, 2014, the Knesset (Israel’s parliament) passed an amendment to the Restrictive Trade Practices (RTP) Law. (RTP (Amendment No. 16) Law, 5775-2014, SEFER HAHUKIM [Book of Laws, the official gazette] No. 2476, p. 33, amending the RTP Law, 5748-1988, LAWS OF THE STATE OF ISRAEL [LSI] 135 (5748-1987/88), as amended, up-to-date version available from NEVO LEGAL DATABASE (by subscription) (in Hebrew).)

The RTP Law generally prohibits the operation of restrictive Business arrangements carried out in the absence of judicial approval and proper registration. (RTP Law, ch. B.) A restrictive arrangement is defined as “an arrangement made … according to which at least one of the parties imposes a restriction on himself which is liable to prevent or to reduce business competition between himself and all or some of the other parties … [or with] a person who is not party to the arrangement.” (Id. § 2(a).)

The RTP Law generally defines a “monopoly” and a “concentration group” (under additional specified conditions and as appropriate), as the concentration of more than half the total supply or the total acquisition of assets, or of more than half the total provision or total acquisition of services, by one person (for a monopoly) or by a limited group of persons (for a concentration group). (Id. §§ 26 & 31B (a).)

The RTP Amendment Law authorizes the Restrictive Business Practices Court, established under the RTP LAW, to force a monopoly or a member of a concentration group whose practices have been found to cause or to constitute a threat to business competition or to the public to sell its assets. (RTP Amendment Law, adding §§ 30A(a) & 31C(b1) to the RTP Law.)