Antitrust Authority reexamining policy on monopoly prices

April 18, 2016 20:28
1 minute read.

money. (photo credit: REUTERS)


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The Antitrust Authority on Monday said it was reviewing a policy that would allow it to tackle monopolies for price gouging.

Two years ago, the authority announced that it would go after companies that charge take advantage of their market power to overcharge for products. Companies with over 50% market share that charged over 20% of their production costs could be sued in class action lawsuits, though they would not be subject to criminal sanctions. It would also consider how similar products were priced abroad and the business risk in the industry.

Since then, however, the Authority ran into difficulties, and never put together a complete enforcement mechanism. It also said that developments since the 2014 ruling had reshaped its thinking.

While price gouging remains a clear negative consequence of market concentration, the Authority wrote in a release on the matter, it is no longer clear if it is an Antitrust issue.

Recently, a court hearing a case on Tnuva overcharging for cottage cheese released new guidance on the matter, which the Authority said may alter the approach.

The Authority speculated that the 20% benchmark could prevent companies from investing, and thus ultimately harm the public, and that price controls might be more effective.

In that light, the Authority reopened its policy for review, and has invited comments from the public through June 16, after which it will make a new decision on its approach.

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