Manufacturers Decry Antitrust Authority Interference

Israeli manufacturers are up in arms over Antitrust Authority plans to impose price controls on monopolies that have a profit margin exceeding 20 percent, Globes reports.

“Our businesses are being nationalized,” said Manufacturers Association of Israel president Amir Hayek.

“With this measure, the Antitrust Authority director [David Gilo] will become the supervisor of the Israeli economy. He will set the prices that companies can charge for their products. If someone wants to dictate the price of a bottle of Coca-Cola to Central Bottling Company [Coca-Cola Israel] president Ronnie Kobrovsky, maybe the government should take over running the business and be done with it,” Hayek said sarcastically.

In response, Gilo said that the aim of the new regulatory scheme is to provide the consumer protection from unfair pricing by monopolies.

“The Antitrust Authority’s objective is to protect competition for the sake of consumers, but also to protect them from monopolies that abuse their power. There’s a limit to the profit that a monopoly should take at the consumer’s expense.

“I do both: I protect competition and I protect the consumer. In Israel, despite all the efforts, competition doesn’t always do what it should, and it’s the duty of the Antitrust Authority to protect consumers.”

Adv. Eldad Koresh of the Amit Pollack Matalon & Co. law firm offered a legal perspective on the issue. “Regulatory intervention in setting prices harms a manufacturer’s freedom of occupation and its property rights. If, when investing in a particular asset or line, a manufacturer intended to maximize profitability, the regulator is now fixing a price and harming its right to act.”

He explained that such intervention could contribute to business uncertainty because the Antitrust Authority director was seizing authority without taking responsibility for the consequences.

“If the pricing of a product is wrong, the director will not bear the responsibility for the collapse of a business.”

This article appeared in print on page 6 of the November 8th, 2013 edition of Hamodia.