12-34-56-78 Chekhov v. State of Israel, P.D. 51 (2)
- Copied from NevoThe Director-General's determination was divided into several chapters relating to a series of alleged violations by the company: the clause of the agreement period; the restriction of the placement of competitor's products in the company's refrigerators and the removal of competitor's refrigerators from points of sale (hereinafter: the refrigerators chapter); exclusive agreements and linking; the standard of discounts introduced by the company; activity to remove "Nesty" devices from points of sale; and a policy against parallel imports of the company. Accordingly, the Director-General found, in the chapter of the term of the agreement, that the company abused its power in the market and violated a series of obligations imposed on it. It did so by means of a provision that included in the trade agreements it signed with many of its customers, the content of which constituted a threat to the company's customers that a reduction in purchases on their part would result in the cancellation of the trade agreements signed with it, including the discounts included in them. In the refrigerators chapter, it determined that the company acted to remove competitors' refrigerators that were placed at points of sale, and to limit the placement of competing products in its refrigerators that it loaned to customers. In the other chapters, it was determined that the company entered into arrangements that included linkage and exclusive agreements; that the company has adopted a discount policy that links the volume of purchases of all of its products to discounts on "Coca-Cola"; because it worked to remove from the points of sale devices for pouring "Nesty", which is a competing product; It was also determined in the Parallel Imports chapter that the company acted to thwart parallel imports by adopting a policy of stopping supply to customers who purchased parallel import products. Later, the Director-General discussed various claims of the company that arose in the framework of the objection and the dialogue that took place with it. Among other things, it rejected the company's argument that it was necessary to prove a mental element as a prerequisite for imposing a financial sanction; the argument that it was not entitled to take enforcement steps due to the violation of the agreed order without prior application to the Tribunal; the argument that it is not authorized to impose a financial sanction when it is a matter of retroactive application of the amendment to the law that authorized it to impose sanctions; as well as the company's claims regarding an improper procedure and a violation of its right to a hearing. Finally, the Director-General discussed the amount of the financial sanction against the background of the various violations and claims, while reducing the amount of the sanctions by 10 percent due to the length of the proceedings. Below we will expand a little on the determinations that are the focus of the appeals before us.
- (-) The clause of the period of the agreement. The Director-General determined that the inclusion of a clause dealing with the termination of an engagement in certain circumstances in the Company's trade agreements with many of its customers constitutes a violation of Section 29A of the Law, which deals with the abuse of the status of a monopoly holder, the provisions for a monopoly holder, the agreed order and the terms of the approval of the merger. As a result, a financial sanction was imposed on the company, which was exacerbated, among other things, by 30 percent due to the violation of the specific instructions imposed on the company, and by 36 percent due to a particularly high sales turnover. Accordingly, the sanction imposed on the company in respect of this section was set at ILS 9,825,028.
The clause in the company's trade agreements instructed as follows: