The Knesset authorized a bill 72-0, to reduce concentration in the market, in
its final vote Monday night.
“Passing the Market Concentration Bill is
good and encouraging news for the future of the Israeli market,” Knesset Finance
Committee chairman Nissan Slomiansky (Bayit Yehudi) said, presenting the
legislation to the plenum.
“Today, we radically changed the structure of
the market and made it suit the needs and interests of the
According to Slomiansky, the bill will end a situation in which
“the public’s money was taken advantage of by a small number of wealthy people
for their own welfare,” bringing money back to the public and protecting savings
and pension funds.
The complex bill has several functions meant to change
the economy’s structure.
The legislation breaks up so-called pyramid
companies, or firms with subsidiaries that own more of these, by forbidding the
creation of more than two levels of subsidiaries.
Existing pyramids will
have to break up over the next four to six years, depending on their
Pyramids were seen as allowing individual companies and, more
specifically, their major shareholders, too much influence.
restrictions on the corporate structure is expected to lead to several years of
highlevel sales, mergers and acquisitions, as pyramids are forced to restructure
or sell perfectly healthy companies on the open market.
“From now on,
Israelis can only see pyramids in Egypt,” Slomiansky quipped.
legislation also sets a definition for companies that have too much heft in the
market, exposing them to regulatory scrutiny that would make it harder, for
example, to get government tenders or licenses.
Such companies are those
that have more than NIS 6 b. in annual sales, over NIS 40 b. in financial
assets, constitute 50 percent or more of its particular field, and have 10
franchises in more than four sectors of the economy.
In addition, there
will be a separation between “real” economic institutions, and financial
A Supermarket or a software company, for example, that make
“real” things cannot be attached to a bank, insurance provider or credit card
company – such combinations could lead to conflicts of interests.
will increase competition in the market, reduce the influence wealthy people
have on decision-makers and put the public’s interests at the head of the
government’s economic priorities,” Slomiansky said.
opposition MKs had positive things to say about the bill’s intentions, the
debate lasted nearly five hours, as part of an attempt to filibuster the next
bill on the agenda, which is meant to curb illegal African
Meretz leader Zehava Gal-On expressed concern that the
legislation will not reach its goal.
“The government turned the market
into an arena that gives tycoons public property on a silver
Time and again we see the government work for the interests of
the few, not the wider public,” she said.
Gal-On said that “despite the
significant steps taken by the bill, it will allow tycoons to continue milking
Although this is better than the original draft submitted
by the government, the law needs to be more courageous.”