Last week, Israel’s Competition Authority (ICA) filed an indictment against supermarket chains and their executives, alleging restrictive arrangements and other anticompetitive practices. Notably, one chain and its CEO were charged with an unprecedented offense—an attempt to engage in a restrictive arrangement by coordinating price increases through public messaging in the media – marking the first time such a charge has been brought in Israel.
This case stands out because it does not rely on direct communication with competitors but rather on public statements as a means to achieve an illicit agreement.
What Were the Alleged Statements?
🔸 Media Interviews – The CEO talked about predicted price increases by suppliers, identified a timeframe for the hikes, and warned that retailers refusing price adjustments might face empty shelves.
🔸 Social Media Post – in which he warned of a “tsunami of price increases” by suppliers, and provided an estimated percentage range for the expected price increase.
🔸 Follow-Up Interviews – In subsequent media appearances, he stated that “a strong price hike is coming”, “across all (products)”.
🔸 According to the indictment, in conversations with suppliers, the CEO stated that his public remarks were intended to pave the way for price increases.
💡 Why Is This a Competition Concern?
The ICA claims that through his statements, the CEO conveyed a message expressing his desire for price increases by suppliers and retail chains, and that the statements were made with the intent to facilitate a restrictive arrangement aimed at raising consumer prices.
Legal Implications
If convicted, this case would set a precedent limiting public statements by executives, especially in concentrated markets.
📜 Regulatory Guidance: When Could Public Statements Become Illegal?
In 2012, the ICA assessed whether a wave of public price hike announcements by food suppliers and retailers amounted to unlawful coordination. Ultimately, it has not taken enforcement measures, but issued a guidance paper, warning that such statements could amount at least to an attempt to form a restrictive arrangement.
🔹 Risk Factors Identified in the Policy Statement:
✔ Statements containing detailed and specific information about pricing or about other competitively sensitive information.
✔ Statements made in highly concentrated markets with few competitors.
✔ References to future pricing or information that allows inferences about future pricing. .
✔ Statements outlining clear conditions for coordination or “if-then” scenarios.
✔ Reciprocity: A series of interconnected statements.
✔ Direct messages to competitors, particularly specific ones.
📍 Bottom Line:
Can public messaging constitute a restrictive arrangement or an attempt to form one? The court will have to decide and clarify the boundaries between legitimate statements and unlawful coordination.
This article was written by Partner, Tamar Dolev-Green, Head of Competition/Antitrust at ERM. View the post here on LinkedIn or here on Facebook.