Daily Israel Report

Gov't: Break Up Those Monopolies!

The government on Sunday approved plans to break up monopolies and 'concentrated wealth,' which PM Netanyahu says causes high prices.
By David Lev
First Publish: 4/22/2012, 2:46 PM

Netanyahu
Netanyahu
Israel news photo: Flash 90

The government on Sunday unanimously approved the findings of a committee on monopolization of the economy, approving plans to encourage not only competition, but also the breakup of large “pyramidical” corporations that own many businesses not connected to their core business.

The recommendations include passing legislation that would regulate the size of companies and impose penalties on corporations and individuals who “concentrate” too much wealth or too many assets in a single entity.

Netanyahu praised the approval of the findings, saying that “for years governments have spoken about increasing competition, but now we are finally doing it. When there is more competition, prices come down.”

Netanyahu said that even the small steps that had been taken over the past year had had an effect. “I saw a report by the Central Bureau of Statistics that food prices did not increase in the past year, even though the inflation rate rose. But this does not suffice,” he added. “I will ask that these recommendations be passed into law as soon as possible in order to further open the economy to competition and thus lower prices."

Meanwhile, a report in Globes last week said that two families who control large corporations in Israel are threatening to sue the government if the recommendations on breaking up monopolies and dispersing concentrated wealth are approved by ministers.

The Liberman and Abeles families of Australia, who are partners in the Paz Oil and the First International Bank – both core businesses of conglomerates that own many smaller concerns – said they would go to the International Court of Justice in The Hague or the International Court of Arbitration in Paris, claiming that the government would be in breach of international economic treaties to which Israel is committed  if it tried to implement the committee's findings. They will also claim that the policies threaten their property and rights, and that they, as a smaller conglomerate, would be discriminated against unfairly by being lumped in with much larger corporations.

Attorneys for the families, and their Israeli partner Tzaddik Bino, said that forcing them to sell their assets in a “fire sale” was extremely unfair, since all of the assets they had acquired in recent years had been with government approval. They claim that even though they own both conglomerates, there are no business dealings between them and they are not using their potential “concentrated” power to prevent competition.