Shai Bakal Roi Krause September 22 2022 ICA's power to seek documents – what you need to know Arnon, Tadmor-Levy | Competition & Antitrust - Israel Shai Bakal, Roi Krause Competition & Antitrust BackgroundICA draft opinionHighlights of ICA draft opinionBackgroundIsraeli competition law stipulates that upon the request of the director general of the Israel Competition Authority (ICA), every person – including companies – is obliged to submit any information or document which, in the director general's opinion, may ensure or facilitate the implementation of the law. Such requests are known as "request for information " (RFIs). This authority has been broadly interpreted in case law and complex legal questions have been raised in light of:the increasing usage of RFIs; andthe significant increase in the scope of information and documents stored by corporations in the digital era.The best example of this is the expanding trend of the ICA to require respondents of RFIs to divulge information that is stored outside the company's servers, including information stored on company employees' personal computers and phones (eg, correspondence made through WhatsApp, SMS or other instant messaging apps). The broad interpretation of the authority raised questions of data privacy, as well as practical issues pertaining to the difficulty of filtering relevant information from within the vast amount of information that is stored in instant messaging apps. In many cases, compliance with such RFIs requires tens of thousands of documents to be reviewed in order to filter out the data that is relevant to the ICA. Even after the information is filtered, there remains the concern that not all the required information was disclosed to the ICA.On the other hand, non-compliance or partial compliance with an ICA RFI is a criminal offence under competition law that is punishable by up to one year's imprisonment and financial penalties. It is also within the general director's authority to enforce compliance with RFIs in the administrative field using financial sanctions.ICA draft opinionOn 4 September 2022, the ICA published for public comment Draft Opinion 2/22, regarding the receipt of information by the ICA and its review by third parties. In this draft, for the first time, the ICA details its position with respect to the practical aspects that stem from its authority to collect information and documents.If these instructions are adopted in their current form, it is thought that the difficulties that respondents to RFIs already face will intensify significantly. This article presents the highlights of the new instructions.Highlights of ICA draft opinionWhat information may the ICA demand?In the draft instructions, it is stipulated that the general director may require any information that is available to the company or its affiliates, including:quantitative data;internal documents; andcorrespondence of any kind, including through instant messaging apps.It is the ICA's approach that the general director even has the authority to oblige respondents of RFIs to submit written documentation of oral agreements that were agreed upon in an undocumented manner.If the response to the RFI includes an opinion that was prepared in view of proceedings before the ICA, the general director may also require disclosure of all the information to which the writer of the opinion was privy, and not just the information upon which the opinion is based.Who can be subject to RFIs?The draft instructions stipulate that it is within the director general's authority to demand information from:companies;private persons; andunder certain circumstances, foreign companies.Who is legally responsible for responding to an RFI?The draft instructions stipulate that the responsibility to respond to an RFI falls upon the company and its general manager. The general manager or chief executive officer may authorise another person to respond on their and the company's behalf. However, it is the general manager's responsibility to:ensure that the RFI reaches all the relevant personnel within the company;oversee the data collection process;ensure that the response is complete and full; andensure that the response reaches the ICA within the timeframe advised in the RFI.Failure to comply with this obligation exposes the company and the general manager to criminal and administrative enforcement.Is it possible to approach the ICA with questions regarding an RFI?The draft instructions stipulate that if respondents to RFIs have specific questions with respect to certain information or documents that are requested in the letter, they must approach the ICA in a timely manner to ensure compliance with the scheduled submission date. However, it is clarified in the draft instructions that, as a general rule, the ICA will not confirm to the respondent that its search was complete and will not provide guidance which respect to how the search should be implemented. For example, the ICA will not confirm whether certain search words are relevant.Is it possible to submit redacted documents or to filter out non relevant portions of documents?With respect to redaction of information, the ICA makes it clear in the draft instructions that respondents to RFIs are not allowed to redact or omit parts of documents that the respondent thinks have no relevance to the RFI on their own accord. It is clarified that the submission of redacted documents without the prior approval of the ICA is a violation of the law and is subject to enforcement. The ICA must receive all the documents in their full original version, such that they would be able to make sure no parts have been omitted.It is clarified that deviation from the aforementioned rule will be considered in exceptional cases and on the basis of prior application to the ICA to receive its consent for the redactions. As a rule, it is not possible to redact parts of presentations. With respect to redaction of personal information, the ICA clarified that it is possible to redact information, without the need for prior approval, such as:ID numbers;telephone numbers; andmedical conditions.It should be noted in the response that the redaction was made for privacy purposes. With respect to confidential information, the ICA clarified that confidentiality requests should be raised explicitly and beforehand. The ICA may require that certain clarifications are provided in review of confidentiality requests.Is it possible to request a deadline extension or reduction of the scope of documents requested?According to the draft instructions, any claim with respect to the scope of documents requested or the burden that is imposed on the company must be raised as soon as possible in the framework of a reasoned request in a manner that will make it possible for the ICA to focus the RFI if it reaches the conclusion that the request is merited.Also, the ICA clarifies that any delay in response to an RFI may expose the company to enforcement measures. Therefore, it is clarified that respondents would be prudent to approach the ICA as soon as they are made aware that they would not be able to comply within the scheduled timeframe.What are the implications of non-compliance with RFIs?The ICA clarifies that, as a rule, the imposition of a financial sanction would be the main enforcement tool for non-compliance or partial compliance with RFIs. However, if the ICA is made aware that documents or information was knowingly not delivered to it or that the company intended to withhold information, criminal enforcement would be considered.For further information on this topic please contact Shai Bakal or Roi Krause at Yigal Arnon – Tadmor Levy by telephone (+972 3 684 6000) or email ([email protected], [email protected]). The Yigal Arnon – Tadmor Levy website can be accessed at www.arnon.co.il.