Antitrust Authority Takes Aim at Unfair Prices

YERUSHALAYIM -

Israeli monopolies have been put on notice that unjustifiably high prices are coming under renewed government scrutiny, Haaretz reports.

The Israel Antitrust Authority is taking steps to reduce the monopolies’ role in the high cost of living, as Antitrust Commissioner David Gilo published a draft of policies for better regulating monopolies.

“In Israel’s economy, which is characterized by small, concentrated markets, often with high entry barriers, there is particular legitimacy for giving the Antitrust Authority and citizens effective tools to fight this phenomenon,” the draft states.

The first step is providing a clearer definition of fair policies, to clear the way for enforcement of the law forbidding monopolies from charging unfair prices. This includes strategically low prices aimed at forcing competition out of the market, as well as unreasonably high prices that would not be possible in a truly competitive market. Moreover, the document states that without regulatory intervention, the less competition in a given market, the higher the price.

Meanwhile, a bill limiting bags of cement to 25 kilograms is under fire from the Economy Ministry, which has branded it as a ploy to block imports that would encroach on the monopoly of Nesher Israel Cement Enterprises.

Internationally, cement is generally packaged in 50-kilogram bags, while it is believed that Nesher plans to switch over to packaging its cement in 25-kilogram bags. In the explanation for the bill, its author MK Haim Katz said that it is motivated by humane as well as economic consideratons, the intention being to protect the wellbeing of workers who carry bags of cement on their backs, which ultimately benefits the economy.