Therefore, at the end of the day, a recommendation was made to allow the appellant to continue to hold only one of these two licenses. As it is said:
"By splitting the two products and importing them by two different importers, you can develop competition between Yamaha motorcycles and Kawasaki motorcycles, because each importer will have an incentive to compete in the best way against the other product [sic] – to increase sales of the brand it imports, to lower prices for the customer, to improve the quality of service, and more. In addition, a split between the two brands is likely to reduce [the appellant's] bargaining power vis-à-vis its authorized garages. Accordingly, it is likely that the barriers to entry and expansion facing the other small importers will be reduced, which is also expected to promote competition in the import and sale of motorcycles."
With regard to gasoline scooters, the Authority reiterated the recommendation presented in the opinion regarding Sun Yang's products. With regard to electric scooters, the Authority recommended that the appellant be allowed to continue importing them made by Yamaha and other products for which it holds a license (Gogoro; Hereinafter: Gogoro), subject to its consent to examine these licenses on their upcoming renewal date. With regard to the other Kawasaki vehicles for which the license was requested to be renewed, it was recommended that it be renewed without restrictions or conditions.
- In light of the Authority's opinion, the appellant was given opportunities to voice her arguments in writing and orally before a decision was made by the Director. The appellant's arguments were essentially that the Authority's recommendations lack reasoning and a proper factual basis; that the competitive analysis it conducted in its opinion is erroneous and its adoption will lead to broad economic harm, including harm to consumers; that its recommendations are tainted by discrimination and selective enforcement; that a decision adopting the recommendations would be unreasonable due to excessive weight of competition considerations over other considerations derived from the Licensing Law, to which significant weight should be given; that the adoption of the recommendations would lead to disproportionate infringement of the Appellant's right to property and freedom of occupation; that the manager was required to exercise independent and separate judgment from the Authority; that the hearing was held in a serious violation of the appellant's right to argue; that section 10(a) of the Licensing Law enumerates the exclusive grounds for which it is possible to refuse to renew a license, and in this case none of them existed; and that weight should be given to the fact that the appellant has held a license for decades.
- At the conclusionof the hearing process and after repeated consultations with the Authority, on April 17, 2024, the Director's decision was issued. The decision adopted the main recommendations of the Competition Authority in relation to the products of Yamaha and Kawasaki, but not in relation to the products of Sun Yang. Accordingly, it was determined that the appellant should be allowed to renew its license in relation to Sun Yang's products without conditions or restrictions, and that with regard to the products of Yamaha and Kawasaki, it must choose within 60 days which of the two products it wishes to hold an import license. It was also noted that the direct importer's license for the product that the appellant does not choose will be valid until December 31, 2024; and that if the appellant chooses to renew its license for the Yamaha product, its renewal will be subject to the examination of its licenses for this product and the Gogoro product on the date of their renewal.
- In summary, the reasons detailed in the decision were that the promotion of competition in the automotive industry is one of the important purposes that underpinned the Licensing Law, and therefore competition considerations must be given their due weight; that the role of the Director is to balance all the relevant considerations in order to realize the purposes of the Law in the most complete manner; that in this framework he is obligated by law to consult with the Competition Authority, which is the professional body and expert in conducting market analysis; that the Director is not limited to the grounds in section 10(a) of the Law in granting a decision not to renew a license, and he is entitled to decide not to assign a right even for reasons of promoting industry competitiveness by virtue of section 45 of the Law; that it is doubtful whether the license granted to the Appellant can be defined as property, and in any case it is a proportionate infringement; that the violation of the Appellant's freedom of occupation is only in the manner of the exercise of the occupation, It is also proportionate; that the licenses that were given to the appellant over the years were given in advance for a fixed time, and in any event the appellant was given an extended period of time to prepare for the implementation of the decision in question; and that the appellant's argument for selective enforcement should not be accepted. With regard to the claims on the economic level, the decision determined that there was no flaw in the competitive analysis conducted by the Authority; that there are significant barriers to entry into the two-wheeled vehicle industry, which harm competition; that the degree of substitution between Yamaha and Kawasaki products is high, since they are Japanese products that compete with each other in almost all subcategories; Because of this, the potential to promote competition from non-renewal of one of the licenses is clear and significant, and the potential benefit to the public is high to very high; and that splitting the licenses will not cause harm to consumers in terms of safety and the provision of services.
- The appellant did not accept the decision with respect to the products of Yamaha and Kawasaki and filed a petition against it with the Court for Administrative Affairs. It was argued, inter alia, that the decision violates her constitutional rights, and that it is a disproportionate infringement. The Director's decision was also given without authority, since none of the grounds set forth in Sections 8 and 10(a) of the Law arose, in which the Director may refuse to renew a license. In its decision, the Director tried to circumvent the need for these grounds to exist by means of section 45 of the Law, but this section does not constitute an independent source of authority to refuse to renew a license when the grounds set forth in the law are not met. In addition, the director breached his duty to set criteria for exercising his powers in granting and renewing a license, so that his decision was arbitrary. His decision also unlawfully violates the appellant's reliance on the license granted to it and its expectation that it will be renewed in the absence of any real change; It was given in the absence of a sufficient factual basis; It suffers from extreme improbability; It was based on erroneous and incomplete competitive analysis and will lead to harm to competition and the public; It was adopted without consulting the Advisory Council for the Import and Marketing of Vehicles (hereinafter: the Council) as required by the Licensing Law; It was granted without allowing the appellant an effective right of appeal; and it discriminates against the appellant and constitutes selective enforcement against it. In view of all of the above, we were asked to instruct that its applications for the renewal of direct importer licenses for Yamaha and Kawasaki products be accepted unconditionally, and for the maximum period prescribed by law of 6 years.
- The court rejected the petition. First, it was determined that the Director's decision was given with authority, since Section 45 of the Law grants him explicit authority not to renew a license for reasons of promoting competition. This is a section that stands apart from sections 8 and 10(a) of the Law, which gives the Director an independent ground for non-renewal of the license; that this conclusion is also supported by the purpose of the Licensing Law and its legislative history; and that any other conclusion will lead to the emptiness of the provision of section 45 of its content. Although in view of the consequences of the exercise of the authority, it should be used only in exceptional cases and in accordance with the rules of administrative law, the authority exists. It was also determined that he was not found to be in the myriad of flaws that were claimed to have occurred in the proceeding. The appellant did not claim the absence of standards and arbitrariness in the hearing held for her, and in any event there is no obligation to set standards and the fact that they were not set does not lead to the nullification of the decision in our case, which was professional and reasoned and was given on the basis of a concrete factual basis and after an orderly proceeding. The court also noted that the considerations detailed in the Licensing Law are examined and implemented according to the specific circumstances of the case, so that it is difficult to determine in advance uniform criteria for each scenario. The appellant's argument for non-granting of the right of argument was further rejected. It was determined that she was given the right to plead in an orderly proceeding in which her arguments were heard both in writing and orally, and the decision included a detailed reference to her arguments. The appellant's argument for non-compliance with the obligation to consult with the council was also rejected, while it was determined that this argument was also not raised at the hearing. In any event, the said consultation is required by law only in cases of non-renewal of a license by virtue of sections 8 and 10 of the law, and not in the case of a decision by virtue of the independent cause of action in section 45 of the law. In addition, the court rejected the appellant's claim for selective enforcement, ruling that the decision was made with a clear distinction between it and other importers, and it was proven that there was no identical basis for comparison between them.
- On the merits of the decision, the court ruled that it was a reasonable, proportionate, professional and balanced decision made on the basis of the Authority's professional and in-depth opinion; After an in-depth discussion of the appellant's arguments and a balance between her rights and the protection of the public interest; while exercising independent discretion by the Director in the partial adoption of the Authority's recommendations; and while examining means that are less harmful. Against the background of the aforesaid, and given the limited scope of the court's intervention in decisions such as this, it was determined that the decision does not reveal grounds for intervention. It is true that the decision constitutes harm to the appellant, but in contrast to its interest, stands the public interest in opening the market to competition, removing barriers and lowering the prices that may be due to competition. This is indeed a precedent-setting decision, but promoting competition requires innovative decisions. In light of all the above, the court rejected the petition, but at the same time, the appellant was given an additional period of time to organize until the end of 2025.
Hence the appeal before us.