1. Agreed Order between the Competition Commissioner and Super-Pharm (Israel) Ltd. (2017) – How did the abolition of the exclusivity arrangements on the part of Super Pharm affect the ability of competitors to enter shopping centers where a Super Pharm store?
On December 11, 2017, the Competition Tribunal approved Super Pharm’s undertaking to cancel the existing exclusivity arrangements, subject to a number of exceptions.
The Authority’s investigation revealed that since the issuance of the agreed order, five branches of Super Pharm’s competitors have been opened in trade complexes where there were exclusivity arrangements prior to the issuance of the agreed order. The purpose of the agreed order was to remove the main barrier facing competitors seeking to enter the complex where Super Pharm is located.
The Authority’s investigation revealed that in addition to the contractual restriction imposed on the property owner from bringing in a competitor, another factor in the property owner’s discretion is the construction of the mix of stores in the commercial center under his management. Despite the abolition of the exclusivity, the owner of a property may, for his own reasons, not allow another competitor from the pharma field to enter a commercial center.
However, the very entry of additional competitors into the trading complexes as well as references to requests to rent properties in complexes where there was an exclusive arrangement prior to issuing the agreed order, indicate the effect of the agreed order in lowering one of the entry barriers in the field, and allow Super Pharm competitors to offer value offers to the property owner. Their entry into trade centers.
2. Merger approval between Yedioth Ahronoth and Bar Distribution (2016) – Did turning Yedioth Ahronoth from a stakeholder in Bar Distribution, the most significant distributor at the time in the daily newspaper distribution market, to a controlling shareholder in a distribution bar hurt competition in the print press market or in distributing newspapers competing with Yedioth Ahronoth?
The examination revealed that there was an increase in the distribution fee for daily subscribers in all newspapers while the distribution fee for weekend subscribers remained unchanged. It can not be determined that the merger affected competition in the print press market, as the increase in distribution fees for daily subscribers can be explained by a decrease in subscriptions. A decline that characterizes the print press market, as well as an increase in the market power of a distribution bar in recent years as a result of its becoming the sole distributor in the print press market.
It should be noted that despite the increase in the distribution fee for daily subscribers, the newspapers did not raise the subscription prices for their customers and absorbed the increase in the distribution price. The Authority’s investigation revealed that the quality of distribution had actually improved – so that the fears of harming the quality of distribution to newspapers that compete with Yedioth did not materialize.
3. Holmes Place chain merger approvals between the years 2019-2017 – Did the gradual expansion of the Holmes Place chain, which purchased gyms in different parts of the country, affect the prices or the quality of service to the chain’s customers?
A retrospective examination of the Commissioner’s decisions to approve nine mergers between the Holmes Place chain and various gyms was based on a comparison of trends in the “old” branches of the Holmes Place chain in cities where the chain expanded through mergers, relative to trends in Holmes Place branches in cities where no merger took place.
The test results do not indicate an effect on prices or quality of service (supply of studio classes and overcrowding in gyms) at Holmes Place branches, as a result of mergers. The possibility that the merged Holmes Place chain raised prices at the national level as a result of the increase in the volume of its activity was also examined and ruled out as part of the tests conducted.
4. Restrictive arrangement between milk packaging manufacturers (2015) – Did the cancellation of the agreement between Alufek and Dokrat milk packaging manufacturers affect competition in the cardboard packaging manufacturing industry for dairy products?
In 2018, the Alufek and Ducrat milk packaging manufacturers sought to renew the exemption granted to them three times earlier regarding an agreement between them in the field of manufacturing cardboard packaging for liquid dairy products. Prior to the Commissioner’s decision, the parties withdrew the application and rescinded the agreement between them.
The investigation revealed that after the cancellation of the agreement, both Dockert and Alopek began marketing cardboard packaging for dairy products separately and competed for the first time after many years between them. The inspection revealed that the prices of the packaging were reduced, the level of service remained as it was at the time of the restrictive arrangement and the packaging manufacturers continue to develop new products in cooperation with the dairies.
Retrospective evaluation of decisions is part of a process of inquiry and self-audit conducted by the Authority on its actions in order to improve the way markets and transactions are examined, to improve the decision-making system and to improve the effectiveness of the actions taken. Impact assessment of past decisions and interventions are carried out in competition authorities around the world.
The publication of the reviews will allow the public to learn about the analysis of the markets in which the Authority operated, and the internal investigation conducted in order to examine these actions in retrospect.
This is the second year in a row that the Competition Authority publishes a group of retrospective tests it has conducted during the year. The Authority intends to continue this practice in 2021 as well.