"The validity of this agreement is [...].
Notwithstanding the foregoing, the Company may terminate this Agreement immediately and without any prior notice in any case where the Customer has failed to comply with any of its obligations under this Agreement, including but not limited to:
The customer has ceased to purchase the company's products or has significantly reduced his purchases compared to previous years;" (Hereinafter referred to: the clause or clause of the term of the agreement).
- The clause is included in more than 1,000 agreements that the company has entered into with many of its customers, and it allowed the company to effectively terminate an engagement with a customer in the event that he reduced the scope of his purchases from it, for example due to acquisitions from competing companies. It was found that in certain cases, the company had its customers sign a "purchase statement" in which the customer declared in advance the total scope of his business's beverage purchases. This was without a separation between Coca-Cola's products and other products of the company. In other words, even in cases where a customer maintained the same volume of purchase of "Coca-Cola" from the company but was interested in diverting the purchase of other products to competitors, the company has the option of terminating the trade agreement with the customer. This determination was based on a concrete case that illustrated to the Director-General's position the interpretation given by the company to the clause and the manner in which it believed that it could use it as an anti-competitive tool (hereinafter: the " A."). In the aforementioned case, the company's employees threatened a fast-food restaurant chain that transferred some of its purchases to a competing company by reducing the rate of discounts on carbonated drinks, the main ones of which were "Coca-Cola" products, while relying on the section. The Commissioner added that the problematic nature of the clause lies mainly in the threat it created, and not necessarily in its actual implementation. According to her, the clause embodied a threat that was intended to deter customers from exercising their desire to stop purchasing the company's products and from purchasing products that are not the company's. The Commissioner rejected the company's claim that the purpose of the clause was to deal with situations in which a customer continued to purchase its products symbolically in order to evade a refund he received in advance as an advance discount or as a promotional budget. She was of the opinion that this argument found no basis in the language of the section, and that in any event it had no place to hear in view of the use made of the clause and the interpretation given to it by the company's personnel. It further ruled that the fact that the Authority became aware of the problematic clause at a late stage, after copies of the trade agreements had passed through its hands on various occasions in the past, did not in order to establish protection for the company.
- (-) Policy against parallel imports. The Director-General determined that the company's policy against parallel imports led to a violation of the provisions of the Agreed Order, the provisions for a monopoly holder, and the provisions of Sections 29 and 29A of the Law. Due to these violations, the company was imposed a financial sanction in the total amount of ILS 7,241,986. The total sanction imposed included, among other things, a 20 percent aggravation due to a violation of individual provisions and 36 percent due to a particularly high sales turnover. In the background of her determination, the Director-General insisted that the phenomenon of parallel imports in the company's field of business had increased since the first decade of the 2000s. Thus, parallel import products began to be marketed in Israel and, according to the company's definition, products bearing the company's brand names that were not manufactured in its factories. These products usually originated in the Palestinian Authority, and in various countries such as the United States, England, Georgia, and the like. In the face of this phenomenon, the company took various steps and formulated a policy of stopping the supply of carbonated beverages to customers who were found to have parallel imported products. In 2009, a procedure was formulated on the subject, which was in force until 2014, and relevant employees were examined on it from time to time (hereinafter: the procedure). The procedure instructed the company's employees to block the supply of products in a relevant category to customers who were found to be in possession of parallel import products, while excluding products with Hebrew inscriptions on them, in which case the company's employees were instructed to block only after a sample of the product was provided.
- The procedure also included a call script that the employees were asked to follow. The following is the language of the script:
"You hold at the point of sale a product that bears the brands of the Central Company for the Distribution of Soft Drinks, but was not manufactured by the Company. According to a legal opinion in our possession, these products are illegal, and therefore we are prohibited from selling you the company's products in the category until the equivalent goods are removed from the point."