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General introduction to the legislative framework for private antitrust enforcement

Private antitrust enforcement is founded in Section 50 of the Economic Competition Law, under which any act (or omission) that contravenes the provisions of the Economic Competition Law, including instructions or conditions imposed by the Director General, automatically constitutes a tort actionable in terms of the Torts Ordinance. For example, Section 4 of the Economic Competition Law makes it a contravention for any person to be a party to a restrictive arrangement, which may include both horizontal and vertical agreements, including per se illegal price-fixing or market-allocation agreements. Section 29 and 29A of the Antitrust Law make it illegal for a monopolist to abuse its monopolistic position in the market through, for example, unreasonable refusal to supply or purchase goods or services, price discrimination or charging an unfair price for goods or services. Such contraventions of the Economic Competition Law are thus deemed to constitute a tort for purposes of the Torts Ordinance. Section 71 of the Torts Ordinance empowers a civil court to grant compensatory damages or to make other orders, such as injunctions, in favour of a person who has suffered damage or injury as a result of a tort committed against him or her.

In 2006, the Class Action Law was signed into law. This legislation extracted the provisions regulating class actions from, inter alia, the Economic Competition Law, and set out an independent regime regulating class actions. The Class Action Law regulates, inter alia, the legal requirements for the commencement of a class action such as issues of legal standing, the legal requirements to bring a class action and the relief that may be claimed, including the calculation of damages. The Class Action Law also sets out the court's powers and authority in its hearing and enforcement of class actions, including its authority to recognise a claim as a class action, to grant a settlement order, and to issue other orders such as in respect of professional fees and remuneration of the class action representative. The Class Action Law also regulates various other issues, such as prescription and the establishment of a fund to finance class actions that are of social or political significance.

Sometimes, claims alleging anticompetitive conduct are brought both under the Economic Competition Law and the Unjust Enrichment Law. In a decision issued by the Central District Court, which involved a claim of abuse of dominant position, the Court awarded the plaintiff a remedy based on the Unjust Enrichment Law. The Court held that misleading the Patents Registrar in order to prolong a pharmaceutical company's monopoly and delay the entry of a generic competitor in the market entitled the competitor not only to receive compensation under the antitrust laws, but also entitled it to claim all or part of the monopoly profits under the Unjust Enrichment Law.

During 2013 and 2014, two laws were enacted aiming to increase competition in the markets generally and in the food sector in particular.

In March 2014, the Law for Enhancement of Competition in the Food Sector (Food Law) was enacted with the objective of increasing competition in the food sector and consequently bringing price reductions to consumers. Inter alia, the Food Law prohibits a supplier from dictating, recommending or interfering in any way in decisions made by a food and consumption products retailer regarding the price it charges consumers for a product of another supplier or the conditions under which it sells a product supplied by another supplier. Specific prohibitions apply to big retailers and big suppliers based on, inter alia, their sales volumes in the preceding year. In general, a big supplier is prohibited:

  1. from interfering in shelves stewardship of a big retailer;
  2. from setting prices below cost to the big retailer;
  3. from recommending the resale prices of its products; and
  4. in the absence of special permission, from subjecting the sale of a product to the acquisition of other products supplied by it.

In addition, the law authorises the Director General to publish on the IAA's website a list of very big suppliers (i.e., suppliers the annual sales of which exceed 1 billion shekels) of which products' placement must not exceed 50 per cent of the total shelf space available in any one of the big retailer's biggest stores. The Food Law further regulates geographic competition by retailers. In this respect, the Director General must define, for every big store of a big retailer, its competitive geographic area, in which area the law prohibits the expansion of the big retailer without prior approval of the Director General.

Interestingly, the Food Law also requires big retailers to publish full and updated prices of any product sold in any of their stores on the internet.

Breach of the Food Law is considered an offence under the Consumer Protection Act, and the Director General is in charge of the enforcement thereof. For example, in July 2018, the IAA reached a consent decree with Shufersal Company, the largest supermarket chain in Israel, according to which Shufersal agreed to pay an administrative fine of 9 million shekels for violations of the Food Law. In addition, in June 2018, the Director General decided to impose a monetary sanction on three supermarket chains for breaching their reporting obligations under to the Food Law.

In the absence of a specific reference to private enforcement of this law, private actions may be filed pursuant to the Torts Ordinance [General Version] 1982 (breach of statutory duty).

In addition, in December 2013, the Law for the Promotion of Competition and Reduction of Concentration was enacted, aiming to strengthen competition and break up certain powerful business groups in the Israeli economy. Inter alia, the Law bans groups from owning both financial and non-financial enterprises (any group that owns both types of companies must divest one or the other) and dismantles business pyramids by stating that no group may have more than two tiers of publicly listed companies. The Law also deals with competition considerations relating to allocation of rights in state assets and the requirement to consult with the Director General in certain cases.

i Prescription

Where a civil claim for damages is brought under the Economic Competition Law, the Prescription Act applies. Sections 5(1) and 6 of the Act direct that a claim (not in respect of immovable property) will prescribe seven years from the date on which the cause of action arose. Under Section 8, however, if the plaintiff was unaware of the facts that constituted the cause of action for reasons that were independent of it, and that even using reasonable caution it could not have known, the period of limitation will commence on the day that the facts became known to the plaintiff. Section 89 of the Torts Ordinance directs that the date on which the cause of action arose will be the date on which the relevant act or omission occurred; and that where the act or omission is a continuing act or omission, then the date on which such act or omission ceased will be the date on which the cause of action arose. Specifically, however, where the claim is a claim for damages, including pecuniary damages, caused by a tortious act or omission, then the date on which the claim arose will be the date on which the damage was incurred. However, should such damage only be discovered at a later date, the cause of action arises on this date, subject to a maximum period of 10 years. Since damage is one of the elements of a cause of action brought under the Economic Competition Law, the latter rule of Section 89(2) should apply to such cases, provided that the plaintiff shows a causal link between the argued action (or omission) and the damage.

In Straus Group et al v. Carmit Candy Industries Ltd, the Supreme Court considered the question of which day the plaintiff became aware of the facts constituting the cause of action. The case involved an action for damages brought by Carmit, the Israeli distributor of Cadbury, against Strauss Group for alleged abuse of dominant position by exclusionary practices aimed at forcing Cadbury chocolates out of the market. The Court ruled that the day on which the plaintiff became aware of the facts constituting the cause of action was not the date on which Carmit became aware of the defendant's salespeople's behaviour and threats to the retailers, but later – when Carmit revealed for the first time that this was part of a strategic decision of the defendant's management to exclude Cadbury from the market. This information was revealed to Carmit only when the investigation of the IAA against the defendant became public.

The inclusion of a person as a claimant in a class action group has the same effect in terms of tolling the statute of limitations as if that person had issued the summons in the matter. In addition, should the court deny an application for approval, the prescription period of the claim of a person included in the group deriving from that cause of action does not end prior to one year after the date on which the decision on the application for approval becomes final, provided that person's claim had not been tolled prior to the date on which the application for approval was filed.