New antitrust chief: Price controls ineffective

June 8, 2016 19:47
1 minute read.

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In he first public remarks since being named Israel's Antitrust Commissioner in January, Michal Halperin on Wednesday called for a tougher approach to breaking up monopolies, but said that price controls were not effective.

"Some 76% of the times monopolies were declared in the last 20 years were free of sanctions or enforcement mechanisms, and thus did not contribute a thing to advancing competition," she told the Knesset Finance Committee.

Already, she said, the Authority was examining its approach to price gouging and declaring companies as monopolies. Of 14 cases of price gouging that were recently reviewed, four of them in-depth, no enforcement action was taken on any.

In particular, she said, attempts to control the problems through price control seemed ineffective at lowering the cost of living.

"If you had asked the cellular companies, if they could turn back time, what do they prefer, price controls or competition, I'm sure they would have preferred price controls," she said.

The cellular reforms introduced by Finance Minister Moshe Kahlon when he was communications minister helped reduce prices dramatically by introducing more competition.

Israel uses price controls largely to regulate the price of food, but also for products in markets with monopolies, such as cement.

Halperin said that another important area of focus would be parallel imports, which allows multiple importers to bring in the same products, thus freeing up a bottleneck in the market.

"The question we at the authority are asking ourselves is how to tackle the high cost of living, and not 'whether' to deal with it," she said.

Setting herself a benchmark, she said the committee should hold her to the numbers and check how much better she has done in the role by the same time next year.

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