Global Competition Law is primarly a practitioner's guide presenting the most salient aspects of the major competition laws country by country, giving an overview of their structure and most charasteristic elements.
Global Competition Law also provides insight into possible future developments in the field.

Global Competition Law

  A corporate merger is defined in Section 1 of the 1988 Act as follows:
  “Including the acquisition of most of the assets of a company by another company or the acquisition of shares in a company by another company by which the acquiring company is accorded 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 …

Concept of concentration

Concentrations are dealt with in Chapter C of the 1988 Act, as lastly amended in January 2019 (Sections 17 to 25). These provisions are supplemented by the following guidelines, based on the principles used by the ICA as reflected in its decisions and court rulings:

- Guidelines For Reporting and Evaluating Mergers Pursuant to the Restrictive Trade Practices Act, 1988, published on 9 January 2008;

- Guidelines of the Failing Firm Doctrine, published on 25 January 2010;

- Horizontal Merger Guidelines, published on 23 January 2011;

- Draft Guidelines for Remedies in Mergers, published on 23 January 2011.

Also worth mentioning is the ICA's Database of Market Definitions, established from 1 January 2005.

It should be noted that a new Merger Notice was issued in May 2022 in accordance with the Economic Competition Regulations (Register, Publication and Reporting of Transactions), 5764-2004.

Finally, the Law for the Promotion of Competition and Reduction of Concentration, published on 11 December 2013 and aimed at limiting the influence of a small number of groups over the whole Israeli economy, contains some interesting provisions for practitioners. Firstly, the law sets limitations on the allocation of State assets (e.g. privatization of a State-owned company) or rights (e.g. grant of a licence to operate a public transport service) to concentrated entities. This refers to entities holding more than 50% of the market for an essential infrastructure (e.g. natural gas, electricity, oil etc.) or 10 or more licences or contracts in at least four essential infrastructure markets. Before granting, extending or renewing the right, the relevant regulatory authority must assess the impact on the concentration of the Israeli market as a whole. Where the right is to be granted on a market with a limited number of operators, the impact must be assessed on that specific market. Secondly, the law aims at dismantling “business pyramids”. As per the new provisions, business groups will no longer be allowed to hold more than two tiers of publicly listed corporations. Finally, the law prohibits the ownership by one company of both financial and non-financial corporations in order to facilitate access to credit for the competitors of such company.

Context

  A corporate merger is defined in Section 1 of the 1988 Act as follows:

  “Including the acquisition of most of the assets of a company by another company or the acquisition of shares in a company by another company by which the acquiring company is accorded 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 participation in more than a quarter of the profits of such company; the acquisition may be direct or indirect or by way of rights accorded by contract”.

  According to the 2008 Guidelines, such definition comprises two aspects: a wide and open one (which is not specified in the definition and which consists in any creation or strengthening of a substantial influence link between the decision-making mechanisms of two companies) and a collection of specific cases, which are listed in the definition, each one of which necessarily creating a corporate merger. Therefore, pursuant to the Guidelines, the Act is concerned only with the result (a structural link between the companies) and not with the method that led to such result.

The 2019 amendment expanded the scope of merger control by stating that the term “company” includes non-profit organizations.

The duty to file a merger notice arises only when the merger satisfies one or more of the following conditions established in Section 17(a) of the Act:

- as a result of the merger, the market share of the merging companies in the production, sale, marketing or purchase of a particular asset and a similar asset or in the provision of a particular service and a similar service, would exceed fifty percent, or such lower market share as the Minister shall determine with regard to a monopoly, in accordance with section 26(c);

- the aggregate sales turnover of the merging companies, in the fiscal year preceding the merger, exceeded ILS 360 million (EUR 100,840,722 million), and the combined sales turnover of at least two of the merging companies is not less than ILS 10 million (EUR 2.8 million) for each of them;

- one of the merging companies is a monopoly within the meaning of the term under Section 26.

Thresholds

The substantive test for assessment of a merger is established in Section 21 of the Act, according to which:

"The General Director shall object to a merger or stipulate conditions for it, if he believes that there is a reasonable risk that, as a result of the merger as proposed, the competition in the relevant sector would be significantly damaged or that the public would be injured in one of the following regards:

(1) the price level of an asset or a service;

(2) low quality of an asset or of a service;

(3) the quantity of the asset or the scope of the service supplied, or the constancy and conditions of such supply."

Global Competition Law

1031. Concept of concentration

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Les notions juridiques connexes

1031. Concept of concentration

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise