MK Moshe Gafni 311.
(photo credit: Courtesy)
Members of the Knesset Finance Committee spoke in favor of cracking down on
cross-ownership of financial and non-financial holdings during a debate
Wednesday on proposals made by a committee on market
“Economic concentration causes real harm to competition
and endangers democracy. The fact that a very small amount of people
simultaneously control financial and non-financial holdings, and even media
companies, is unacceptable,” Finance Committee Chairman Moshe Gafni (UTJ)
“We could find ourselves in a situation in which a small number of
groups with a huge amount of power – part of which they obtained from state
funding – could raise prices, and that nobody would say a thing and the media
would not raise criticism because those same people are in charge there, too.
This is an apocalyptic forecast, but it could happen.”
The Committee on
Strengthening Market Competitiveness released its report in September,
recommending a prohibition on control of financial institutions by large
non-financial corporations, or by companies which control large non-financial
corporations. It defined large financial corporations as companies with NIS 50
billion, or more, in assets under management and large non-financials as
companies with more than NIS 8 billion in sales.
chairman, Finance Ministry Director-General Haim Shani, told the Knesset Finance
Committee that in comparison to the rest of the world, “the Israeli economy is
one of the most highly concentrated, in that 10 large groups hold 41% of the
value of public companies.”
MK Shai Hermesh (Kadima) argued the committee
did not touch on concentration within specific industries, and therefore “missed
out on a major source of harm to competition.”
MK Zahava Gal-On (Meretz)
also criticized the committee, calling its conclusions “too restrained.” She
added: “Tycoons like Sheri Arison and Nochi Dankner will be able to evade these
Gal-On said lawmakers should legislate for the complete
separation of financial and non-financial holdings, “beginning with the first
Prof. Eugene Kandel, chairman of the National Economic Council
in the Prime Minister’s Office and a member of the concentration committee, said
the recommendations had “far-reaching consequences,” and warned against taking
any more dramatic steps that could harm the economy.
recommendations will be submitted to the cabinet within two months, after public
submissions have been heard.