Antitrust Head Gets Tough With Big Energy to Preserve Competition

YERUSHALAYIM -

Antitrust Authority director general David Gilo says he is taking a tough stand with the energy giants who are developing Israel’s offshore gas and oil fields.

“The objective is for the economy to soon benefit from competition and not be at the mercy of a monopoly. The competition that we’re now demanding in the talks with Delek Group and Noble Energy, without the need for protracted legal hearings, is for an independent player with at least 70 billion cubic meters (BCM) of gas, and the high probability of finding relevant fields that will give it an additional 26.6 BCM,” said Gilo  at the agency’s annual conference this week.

Gilo says he will take them to court to wrest the massive Leviathan field from their hands if they don’t meet his conditions for competition, Globes reported.

“Paralleling this effort, we prepared in time the infrastructure for bringing in a new competitor. We’ve limited the existing gas partnerships so that the competitor we’re creating will be able to compete for customers in the market, including Israel Electric Corporation (IEC). Our vision in this market is an integrated effort that includes the creation of competition in the short term on one hand with intervention in the existing gas partners’ contracts on the other hand, so that the customers will benefit from this competition and not be shackled to the existing gas partnerships.”

Gilo is also out to put teeth into antitrust regulation.

“The court has already said that the proper penalty for an antitrust violation is imprisonment. This was the ruling in the Tnuva Food Industries case, in which former President of the Supreme Court Dorit Beinisch said that imprisonment was fitting, rather than community service, for antitrust violations, in addition to a hefty fine. These are fighting words, but penalties in Israel are still lower than penalties in other countries. In the U.S., the average penalty for cartel violations is 25 months in jail,” said Gilo.

“The creation of a cartel is like theft. The consumer has the right to a competitive price, so when several firms fix prices and create a cartel, it is even worse than theft from an individual, because with price fixing, the companies are picking the pockets of all consumers in the country and taking their money. That is why we think that the courts should treat them severely,” Globes quoted him as saying.