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;" (Emphasis added).
- The company's main criticism is directed at a series of determinations regarding the threat that the clause posed to the company's customers. In essence, the company was of the opinion that at the point in time at which the matter was examined, it was not sufficient to prove the "element of libel" in the context of the existence of a threat to the customers, and the court should have examined whether the clause actually created a sense of threat among the customers from the purchase of competing products, and that the various pieces of evidence on which the tribunal relied do not show that such a threat arose. It should be clarified that the "element of libel" is one of the elements mentioned in section 29A of the Competition Law, which states that "a monopoly holder shall not abuse his position in the market in a manner that is liable to reduce competition in business or harm the public." The violation of the prohibition is examined in three stages. First, it is required to prove that the alleged infringer is a "monopoly holder" under the law. Second, that the monopoly owner did indeed engage in a practice that abused his position. And finally, because the same practice is liable to reduce competition or harm the public. This is the "foundation of the plots." The test set for examining the "element of libel" is "a reasonable possibility of actual harm to competition," according to which there is no need for actual harm and probable harm is sufficient, in the sense that there is no requirement for a consequential component and an infringement of force is sufficient (Ashdod Port Case, paragraphs 67-69; for further elaboration: Ariel Ezrahi and David Gila European Competition Law in the Eyes of Israeli Antitrust 254-256 (2019)).
- From the aforesaid, it follows that it is sufficient that the inclusion of the clause in the company's trade agreements created a reasonable possibility of a significant impact on the market. Therefore, even if it would have been better if the Director-General had investigated the customers regarding the clause, in the circumstances of the case it would not have been necessary for the purpose of determining that the clause was liable to harm competition. In any event, this assertion was supported by various evidence and findings. First and foremost, in the language of the section, it appears that the company has the contractual and legal option to immediately terminate an engagement with a customer in the event of a significant reduction in purchases on its part compared to previous years. At the same time, a reduction in purchases by a customer also includes those caused by the diversion of demand to a competitor. It is therefore clear that a customer who wishes to transfer his purchases to a competing company will in fact reduce his purchases in relation to previous years, so that the company will have an immediate opportunity to terminate the agreement with him and thereby deprive him of discounts. It is therefore difficult to understand how the clause of the term of the agreement does not create a threat. In this regard, I also did not find that the company's claims regarding the Authority's failure to identify the defect in the clause for years have an impact on the determination as to the existence of a threat. The Authority was not specifically required to refer to the clause of the period of the agreement, and it cannot be inferred from the fact that the Commissioner found a defect at a later stage that no threat arose in the first place.
- In addition, contrary to the company's claim, this interpretation of the clause was not given in a vacuum, and it stands alongside the individual cases in which it was used by the company's employees, and alongside the content that emerged from the employees' interrogations. It should be noted that in support of the Tribunal's ruling, an individual case was brought (the case of "H. ") The clause was used to threaten a customer with a reduction in the discounts given to him on carbonated beverages, including Coca-Cola products, after he sought to divert demand for non-Coca-Cola products to a competing company, in order to prevent him from doing so. In the context of that case, reference was also given to the interpretation of the company's employees to the section, and in particular to the interpretation of a senior employee on its behalf who relied on the clause in that individual case, and who was in contact with thousands of other customers. In this regard, the company's claim that the tribunal erred in ignoring the fact that the "H. A. contradicts the determination that the clause of the term of the agreement created a threat to customers, because according to it, this is not how the customer understood the matter. The court addressed this argument, and ruled that the same case shows that the clause was used to threaten the customer and the interpretation of the company's personnel to him. This determination was based, inter alia, on the company's response to the first hearing letter, in which it was explicitly stated that the threat to the customer was made in accordance with the section in a manner that reveals the company's interpretation of it (Exhibit 4 of the appeal, para. 1939). Subsequently, I also did not see fit to accept the company's arguments regarding the court's error in determining that the senior employee on behalf of the company interpreted the clause as allowing him to threaten a customer in the matter of "H. A." This assertion was well established in the conversation between the sales manager and the customer, in which the possibility of making use of the term clause of the agreement by the senior employee was mentioned, as well as in the words of the senior employee himself about the incident in his interrogation:
"Section 15, which speaks of the Company's right to cancel this Agreement immediately without any prior notice, in any case in which the Client has not fulfilled any of its obligations under this Agreement, including but not limited to Clause 15.1, the Client has ceased to purchase the Company's products or significantly reduces his purchases in relation to previous years. Therefore, I assume that the reason for the conversations that took place with the customer was a decrease of about 50% of the volume of his purchases compared to the previous year" (Appendix 8 to the Response to the Appeal, at p. 113).