On January 19, 2021, the Court of Appeal ruled in favor of all the appeals filed by the IEC and its officers. In doing so he effectively confirmed the decision of the competition commissioner. The tribunal also did not intervene in the amounts of the financial sanction imposed.
The procedure discusses the Commissioner’s decision of March 6, 2017, according to which the Electric Company abused its position as a monopoly owner, and harmed the service received by business customers who switched to purchasing electricity from private electricity producers. As part of the commissioner’s decision, the IEC imposed a financial sanction of NIS 13 million, as well as personal sanctions ranging from NIS 110,000 to NIS 165,000 for senior officers in the company.
The commissioner’s decision dealt with actions taken by the IEC from mid-2013 to the end of 2015, in which it discontinued the services of a “portfolio manager” for customers who switched to purchasing electricity from private electricity producers, the new competitors entering the electricity supply market.
As part of the government’s many attempts to introduce competition into the electricity sector, in 2013 private electricity producers began to supply electricity to customers. However, alongside the competition that developed in electricity generation, the IEC remained an exclusive monopoly in the electricity transmission network, so both private electricity producers and customers who purchase electricity from private electricity producers must use the electricity network and distribution network held by the IEC.
As part of its services to business customers in the transmission and distribution segment, the IEC provided its customers with a customer portfolio manager (“Matal”), an available contact who accompanies the business customer and takes care of all his needs with the IEC. Coordinating initiated power outages, and accompanying the business customer in real time in cases of faults in the electricity network, while providing information regarding the treatment of the fault and its expected continuation.
Since power outages can lead to heavy financial losses for business customers due to downtime, it is of great importance to service the hangar for them. Private electricity producers do not have the ability to provide a similar service as the IEC is an absolute monopoly on transmission and distribution segments.
The cessation of the MTAL service performed by the IEC, as specified in the Commissioner’s decision, could have deterred business customers from switching to the IEC’s new competitors, the private electricity producers, and thus could have hurt the developing competition in the IEC.
A few months ago, another precedent-setting ruling was given by the Competition Court, which dealt with the discount structure granted by the Port of Ashdod (TK 40796-01-16) and constituted an abuse of its status as a monopoly contrary to the provisions of the Competition Law. Additional in respect of sanctions decisions of the Commissioner of Competition imposed on monopolies that abused their status: Bezeq, the Central Beverage Company (Coca-Cola) and SOS (SOS).
The full verdict is confidential at this stage until the court approves a version that is visible for publication. For the sake of convenience, this notice is accompanied by the decision of the Commissioner for the Abuse of the Class and the imposition of sanctions on which the rejected appeals were filed.
The competition commissioner was represented in the case by Adv. Yael Sheinin, the Deputy Attorney General, and Adv. Moran Miara, Itai Milberg, Tal Arnon and Ella Feinberg. On behalf of the competition commissioner, the economist Dr. Roni Ben-Porat testified.
The IEC has a number of bonds in which mutual funds invest: