The Israeli Antitrust Authority ("the IAA") has recently published a draft policy paper for public review and comment, intended to set standards regarding unilateral public disclosures and publications by the business sector, on the basis of a concern that these have the potential to harm competition ("the Opinion").

The antitrust regulator has taken an interest in certain types of public disclosures made by business competitors, namely those which could affect the business conduct of other competitors, considering that such disclosure and subsequent conduct could amount to an unlawful restrictive arrangement. For example, public expressions such as "we are first waiting for the large companies(…)to increase prices and then we will try our luck" and "Unilever was the first company to announce: we will increase prices after the holidays by 5%-6%"[1], might reduce strategic uncertainty (a factor which encourages competition) and consequently further the ability of parties to reach an arrangement similar to a cartel.

Furthermore, the IAA is of the view that increasing awareness on the part of business entities of the possibility that information exchanges between operators in the same market may be viewed as an unlawful restrictive arrangement may lead them to use alternative ways for the transfer of such information, including by means of public expressions. The Opinion aims to present an analysis of such public expressions in light of the Restrictive Trade Practices Law, 1988 ("the Law") and to clarify the position of the IAA with respect to such expressions.

The IAA recognizes that the availability of business and financial information is generally beneficial and helps consumers, suppliers, investors and other bodies to plan their actions. However, it is also of the view that certain information, although delivered through public disclosure, could be used as an instrument for the creation of what would constitute a forbidden restrictive arrangement. In order to deal with this tension, the Opinion sets out a list of criteria which would be used to determine how severely such disclosures should be viewed: the type of the information (accurate and detailed information, or information about matters such as pricing strategies, production costs and profitability would be viewed more severely than other information), the market structure and its characteristics (the amount of competitors and the market's concentration), the period to which the information relates and the scenarios and competitors which the information addresses.

According to the Opinion, public expressions should generally be examined through the prism of the provisions of the Law concerning restrictive arrangements. This could lead, in certain circumstances (for example, where the information provided is clear and sufficiently accurate so as to enable at least one competitor to act in a manner which would establish a restrictive arrangement), to the somewhat counter-intuitive result of public expressions becoming forbidden due to the Law.

It should however be noted that the restriction of public expressions on such grounds would not be a straightforward matter. Firstly, according to the Law, a number of fundamentals are required in order to establish the existence of a restrictive arrangement. In particular, an element of agreement or contact between the parties, as distinguished from a unilateral act, is required. This being the case, it is not clear on what basis the Opinion seeks to classify a unilateral public expression as a restrictive arrangement.

Secondly, the Opinion suggests that in a case where a unilateral public expression influences the business conduct of another competitor, whether by act or omission, then both of the parties might be party to a restrictive arrangement. However, given that the expression is by definition public, this gives rise to the unwelcome possibility that a business which has acted on information to which it was involuntarily exposed might find itself guilty of committing a criminal offence.

Thirdly, although the IAA recognizes the necessity of the publication of economic and business information, it would appear from the Opinion that the line between what it views as permitted and prohibited expressions is quite blurred. The result of such uncertainty might be excessive deterrence, meaning that businesses would refrain from publishing information which would be of help to consumers and investors in making prudent financial decisions and the disclosure of which would in fact promote competition.

There is also the difficulty that limiting types of public statements might not be consistent with principles of freedom of expression.

The Opinion is certainly interesting. However, it is questionable whether the conclusions it reaches are sustainable. It is yet to be seen, though, how the final Opinion will look and to what extent the IAA will take into account comments from the public on the published draft.