’New antitrust chief Gilo is top expert in the field’

Appointment shows government recognizes importance of competition, says noted attorney.

By NADAV SHEMER
April 21, 2011 03:12
3 minute read.
DAVID GILO

DAVID GILO. (photo credit: Courtesy)

 
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The appointment of Prof. David Gilo as director of the Israel Antitrust Authority demonstrates an increased understanding in government circles of the importance of improving market competition, according to a former deputy head of the authority.

Attorney Niv Zecler, now a partner at Weinstock, Zecler and Co. law firm, called Gilo “the No. 1 expert in Israel in the area of antitrust law,” and said that his appointment was reminiscent of the decision to select then- Hebrew University law faculty dean Aharon Barak as attorneygeneral in the 1970s.

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Gilo, a Tel Aviv University academic with a multidisciplinary education in Israeli and international law and economics, has been published widely on competition law, with particular expertise on partial cross ownership, tacit collusion and current Israeli legislation on restraints of trade between suppliers and customers.

According to Zecler, Gilo – whose appointment was confirmed by the weekly cabinet meeting on Sunday after he was nominated earlier in the month to replace Ronit Kan – will have many challenges to deal with in his new role, including strengthening criminal enforcement, finding the right balance on approving mergers, integrating Israeli antitrust regulation with international standards, and dealing with market concentration.

Zecler said that some of these matters, such as criminal enforcement, were not dealt with sufficiently by Gilo’s predecessors, and added that the challenge for the new director would be to strengthen the criminal department while simultaneously restricting its activities to only the most appropriate cases, namely those involving “agreement between competitors and coordination of tenders.”

On the issue of mergers, Zecler said that Gilo would also need to make “decisions that are more consistent and clear” than those of his predecessors, who, according to Zecler, approved and opposed mergers without properly articulating why they had done so.

As an example, Zecler cited the approval of last year’s takeover of the Jerusalem Light Rail project by the Egged bus company.

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“We want there to be a variety of transportation options, so why did they approve the merger here?” he asked. “And without any explanation, when at the end of the day there is supposed to be competition between the Jerusalem Light Rail and the bus companies.”

Zecler, who was deputy chief of the authority and manager of its legal department from the agency’s establishment in 1994 until 1997, and is currently the chairman of the Antitrust Committee of the Israeli Bar Association, said that he had witnessed tremendous developments in the field of competition law, particularly in terms of the importance given to it by the government.

“The state understood, at the beginning of the 1990s, that if it contributes to [building] the infrastructure for competition within the Israeli market, it will improve the standing of consumers dramatically. The prices will fall, there will be more of a variety of products, and the recognition of the importance of improving competition has risen in the past 20 years so that today there is a bigger budget for the Israel Antitrust Authority,” he said, adding that today the general director of the IAA is considered “one of the most important positions in the local economy.”

Established under an amendment to the Restrictive Trade Practices Act 1988, the IAA has a mandate to prevent the creation of market power through the regulation of mergers and anti-cartel enforcement, to restrain abuse by dominant firms of their position and to preserve competition in the various markets.

It has the power to initiative civil and criminal proceedings and to order monopolies to refrain from acting in a manner which constitutes abuse of a dominant position. In addition, it serves as an advisory body to the government and the Knesset in matters concerning competition.

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