The Israeli Competition Authority (ICA) and Meta agreed on a consent decree, according to which, Meta will pay 25 million NIS (approx. 6.6 Million USD) and will agree to notify the ICA on any future merger in Israel.
In 2018-2019 Meta acquired two start-ups – Redkix and Servicefriend. These transactions were not reported to the ICA.
The proceeding started in May 2021, as the ICA claimed that according to the Competition Law, these transactions should have been filed to the ICA in order to receive the ICA’s General Director’s clearance prior to closing.
According to the Competition Law, if one of the following two thresholds are met, then the parties to the transaction are obliged to file a merger notification to the ICA and await its decision: (1) the turnover threshold – according to which all the parties to the transaction have revenue in Israel of more than 387 million NIS (approx. 103 million USD) and at least two parties to the transaction have revenue in Israel of more than 21 million NIS (approx. 5.6 million USD); or (2) the market sharethreshold – according to which one of the parties to the transaction is a monopoly in any market in Israel – even if such market is unrelated to the target company.
In the case of Meta, the ICA claimed that although the parties did not meet the turnover threshold, the mergers were reportable due to the fact that Meta holds a monopoly in the social media market for end users.
It should be noted that the ICA’s position is that if the transactions would have been notified, they would have been cleared. Nevertheless, it is clear that the ICA will take enforcement measures against any failure to notify – even in cases in which the failure is of a ”technical” nature – since the merger itself did not cause any competitive harm.
The consent decree is now open to the public for 30 days to receive public comments before it is filed to the Competition Tribunal.
Foreign companies should be aware of the ICA’s policy to find and enforce any failure to notify, and conduct their business accordingly.
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The content in this communication is provided for informational purposes only and is not intended to be comprehensive. It does not serve to replace professional legal advice required on a case by case basis.
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For further questions, please get in touch with:
Boaz Golan, Head of the Antitrust and Competition Department
Nimrod Prawer, Vice Head of the Antitrust and Competition Department
