The defense tried to construct from the inscription "assembly in the Harel laboratory" in the technical specifications prepared by the project personnel (P/107(a)-(c)).  However, in the inquiries for quotations that Shekanevsky sent to the various suppliers in MPR(X) and in the table of the contents of the required equipment that was attached to the inquiries and which was sent to the suppliers, the said inscription relating to Harel was not included at all (for example, P/111, N/270, and see paragraph 1004 above).  This, to a large extent, undermines the basis from under the claim.  It is doubtful whether the technical specifications compiled by the project were actually sent to the suppliers within the framework of the National Security Council (even though this is how things were presented to Skanevsky, and even though he did not disagree with them).  In any event, even if the situation was as claimed, Kanevsky testified that this was a technical error on the part of the project personnel (p. 1031, paras. 3-9, they made a 'copy-paste' of the characterization on which Harel worked), while clarifying that even if other suppliers may have a feeling that the supplier who was involved in the characterization (Harel) was "half won" from the point of view of the project personnel (as opposed to the procurement personnel) and even if other suppliers may feel frustrated (p. 1031,  paras. 14-24, p. 1032, paras. 2-5), we are dealing only with a feeling, and we are not dealing with a "promise of winning" (p. 1033, paras. 5-6).  In any case, there is nothing to prevent the acquisition from holding a true pricing.

At the end of the day, even if Harel believed that in light of her previous involvement in characterization vis-à-vis the project's personnel, she had a foothold and an advantage, this does not change the conclusion that emerges from the evidence that Maman sought to conduct real pricing and receive independent quotes from the suppliers and not coordinated idle bids.

642. Finally, we must also reject the general arguments that the CBM was only a "show" for the purpose of "arrangement" the procurement file. These arguments were based mainly on Shahar's testimony.  However, in his testimony, he overwhelmingly confirmed what the defense had offered him, in a manner that was unreliable and without any real basis (see, for example, p. 3270, paras. 12 - p. 3271, para. 5, with reference to N/269; and also p. 3274, paras. 6-17, with sweeping approval of what was offered to him in relation to N/270 (an e-mail message that Shachar sent to Schnevsky retroactively, on April 15, 2012, without recalling the offer he had submitted on March 25, 2012).  Although it was clear from his earlier statements, p. 3271, paras. 17, p. 3272, paras. 13-21, p. 3273, paras. 14-20, and afterwards, p. 3274, paras. 18-22, that he had no memory of the matter and while raising various hypotheses).

Moreover, this is not what emerged from the totality of the evidence.  We saw that Maman's people did not know about the coordination, that they sought to hold true bidding and receive true offers, that they expected the suppliers to "fight" and offer the best price, and that Shahar himself testified that he did not tell Schneevsky or anyone else in a civil appeal that he had spoken to the competitors about submitting bids, and that the civil appeal officials did not tell him to speak to the competitors (see paragraph 1023 above).  The claims that the price quotes were requested only for the "arrangement of the case" are also inconsistent with the statements of Zeiger himself in his interrogation, with regard to the CBC in question, that the Civil Appeal is asking for price quotes in order to see whether it is possible to obtain lower prices (P/220, paras. 324-327), that is, for the purpose of checking the truth of the market situation, and with the fact that Chasia of Triple C contacted Schneevsky on her own initiative with a request that he send her the CBI when she was considering running and prior to the coordination correspondence (P/111).

643. For the sake of completeness, it should be noted that Wei noted in its summaries that the procurement proceeding that the procurement process bearing MPR(X) required an exemption from a tender and that such an exemption was not found (para. 551 of Wee's summaries; Shkanevsky, p. 1013, paras. 19-23, some of Shkanevsky's answers in this context raised questions, p. 1014, s. 1 - p. 1015, s. 15, finally he confirmed there that he may have made a mistake). This does not change anything.  Claims of violation of tender laws or defects in the procurement process do not justify coordination and do not legitimize violations of the Competition Law (see paragraph 339 above).  Nor do they attest to the fact that the procurement process in question was fictitious or prima facie.
644. In the margins, it should be noted that the arguments raised by Wei in paragraphs 211-217 in response to the indictment are not clear. It seems that they revolve around the purchase of Unix servers for the project and not about  the MPR(X) BMR, which is the focus of the eighteenth indictment.  Therefore, it appears that they are not relevant to our case, and it is not for nothing that they were not repeated in its summaries.
645. Therefore, the defense's arguments must be rejected, and in any event, they do not justify or legitimize the coordination of price quotes.

The Eighteenth Charge: The Result

646. The result of the aforesaid is that it has been proven, beyond a reasonable doubt, that the coordination and restrictive arrangement that is the subject of the eighteenth indictment - MPR(X) - that Value, Harel and Zeiger were parties to it, and that Harel and Zeiger's attempt to coordinate with Triple C. Therefore, and in view of the reasons detailed above, I convict Wey, Harel and Zeiger of the offense of being a party to a restrictive arrangement under section 47(a)(1) of the Competition Law, as drafted on the eve of the commencement of Amendment No. 21, together with sections 2(a), 2(b)(1), 2(b)(3), 4 and 55A of the Competition Law, as well as the offense of fraudulent receipt under aggravated circumstances, under section 415 of the Penal Law.  I also convict Harel and Sayeger of the offense of attempting to reach a restrictive arrangement under section 47(a)(1) of the Law as drafted at the relevant time, together with sections 2(a), 2(b)(1), 2(b)(3), 4 and 55a(b) of the Competition Law and section 25 of the Penal Law.  The conviction of Wei and Harel is also based on section 23(a)(2) of the Penal Law.

Oshri - Section 48 of the Competition Law - Officer's Liability

647. In the framework of the eighteenth indictment now being discussed, an offense was attributed to Oshrei under section 48 of the Competition Law.
648. For the reasons detailed above in the discussion of section 48 in relation to the previous charges, here too it was proven that Oshri fulfilled the elements of the offense under section 48 of the Competition Law with respect to the eighteenth charge and the date on which it was committed: Oshri was an active manager of Wey; Wei was convicted of the offense of a party to a restrictive arrangement in the charge here; And Oshri was not able to prove that he did what was necessary for the purpose of supervision and to prevent violations of the Competition Law.

The Defense's Arguments Regarding IBM's Conduct - IBM's Special Mechanism

649. The defense raised claims of the involvement of the manufacturers – mainly IBM – in the arrangements that are the subject of the charges and the conduct that led to the fact that there was no possibility of real competition between the suppliers, conduct that caused the "division of the market" and which directed, directly or indirectly, the arrangements that are the subject of the charges. In this context, the defense emphasized IBM's Special Bid, SB mechanism and the fact that this mechanism was brought before the Competition Authority and was exempted by the Competition Commissioner under section 14 of the Competition Law (see, for example, paragraphs 8, 35-49, 58-71, 155-159 for Wii summaries; paragraphs 28-49, 62-65, 73-74, 91-97 for Harel's summaries; 152-157 for Triple C summaries).
650. The defense's arguments regarding the involvement of manufacturers in an attempt to justify the coordination in the indictment were discussed above in the framework of the hearing of the relevant charges and with reference to concrete evidence for each charge, to the extent that it was presented. We have seen that they cannot be accepted and that they do not change the incriminating conclusion.
651. In order to complete the discussion, we will now address in more detail the claims relating to the special mechanism in the hand and the exemption granted to IBM in this context.

The Special Hand Mechanism - General

652. As we have already seen, as a rule, IBM did not sell its products directly to the end customer. Instead, IBM sold to its business partners – who were called the suppliers or distributors and which included the defendant companies in our case – and they were the ones who sold to the end customer (Orshizer, p. 2390, paras. 6-11, p. 2391, paras. 26 – p. 2392, paras. 5; p. 2425, paras. 1-3; the same was the case with IAI, pp. 2428, paras. 15-25).
653. As far as the selling price at which IBM sold the products to its suppliers, IBM had a published price list of the list price. The prices in this price list were high and did not reflect actual sales prices.  In fact, almost no purchase transactions were made according to this price list.  The sales prices relevant to the suppliers were called the channel price.  These prices included a fixed discount from the list price and reflected the selling prices at which a supplier could buy the products from IBM in accordance with the contract agreement between him and IBM (Hershkovitz, p. 6630, paras. 10-24; Orshizer, p. 2399, paras. 24 ff.; p. 2407, paras. 25-27; Oshri, p. 4287, paras. 5-10).
654. Alongside these, there was the special mechanism in hand.  As we will see immediately (below, paragraph 1059), no foundation was laid for this mechanism to be relevant except in relation to a relatively small number of charges.  In any event, the mechanism is concerned with providing a special discount to the supplier, a business partner, that exceeds the regular discount to which he is entitled from IBM according to the channel price.  A supplier could have requested a special discount from IBM for a specific transaction for a particular customer (Orshitzer, p. 2405, paras. 16-23, p. 2566, paras. 5-10).  In general, the special in hand is intended for cases in which the supplier believes that the regular discount may not be sufficient to win the transaction, for example, in view of the existence of competition with other manufacturers or due to the customer's budget constraints (Hershkovitz, p. 6630, s. 29 - p. 6631, s. 4, p. 6634, s. 28 - p. 6635, s. 8, p. 6670, s. 2-8, p. 6671, s. 30-31,  Orshitzer, p. 2586, s. 31 - p. 2587, s. 17).
655. A request from a supplier to receive a special by hand was made through IBM's computerized system and was forwarded to IBM Worldwide for handling. It was IBM's product managers who sit abroad who decided whether it was appropriate to give a special supplier in hand for a particular transaction and what discount to give (Orshitzer, p. 2402, paras. 5-15; see also: Hershkovitz, p. 6630, paras. 20-23, p. 6634, paras. 25-27).  The members of IBM's business partners department in Israel and the sales personnel in Israel could have been asked about their position in relation to the supplier's request or supported it, but they were not the decision-making parties and they did not even determine the rate of the special discount that would be given, if it was given (Orshizer, p. 2422, paras. 18-27, p. 2591, paras. 25-26, and see also Orshitzer's testimony there, according to which he did not enter the numbers and was not involved in the numbers).
656. From the testimonies of IBM officials, it emerged that there may be situations in which a number of suppliers will request and receive a special discount for the same transaction (Orshitzer, p. 2403, s. 11-27, p. 2441, s. 27 – it is possible that all the suppliers will receive the same hand to IAI; p. 2445, s. 17-32, p. 2589, s. 8-13, p. 2606, s. 10-28; Hershkovitz, p. 6629, s. 21-22; Lavid, p. 6439, 26-27).  These testimonies were not contradicted (see also Naveh's testimony, p. 296, s. 23 - p. 297, s. 4).
657. Another term at IBM that came up in the context under discussion is - channel conflict. This refers to a situation in which two suppliers approached and received a special in hand, and one of them claimed that he deserved  priority, that is, a special in the hand under the best conditions.  This, for example, is because he has invested in promoting IBM's products to the customer.  This state of affairs was brought before the manager of business partners at IBM, in our case, Orshitzer, who decided only whether there was justification for giving priority to one of the suppliers or not, without determining the rate of discount or priority (p. 2402, s. 26 - p. 2403, s. 14, rules yes or no, without entering into the price; p. 2404, s. 9-17, p. 2590, s. 12 - p. 2592, s. 4).  In other words, prioritization can be given, among other things, in order to incentivize investment in marketing with the customer and to deal with the problem of the free rider, which can arise where a supplier who has not invested will benefit from the investment advantage of another supplier (Hershkovitz, p. 6631, paras. 4-16, Orshizer, p. 2587, s. 9 - p. 2588, s. 19; see also Lavid, p. 6567, s. 5-8, s. 24-27,  6568, paras. 10-18).  In his testimony, Orshitzer clarified that in such cases he checked whether there was indeed justification for giving priority to one of the suppliers, including for example whether it was the supplier who invested as claimed, but he did not enter into the numbers, did not determine the discount rate, and did not check that this was a discount that would guarantee the victory of the person who received the priority (p. 2590, para. 12 - p. 2592, para. 4).  Lavid testified that the prioritization given to the supplier did not guarantee him a win, and that it was the supplier – and not IBM – that decided at the end of the day what his selling price would be to the customer (p. 6568, paras. 2-4, paras. 10-18).
658. Limiting the maximum price per customer in a special bid – it was the supplier and not IBM that determined the final selling price to the customer (see also paragraph 1081 below).  However, when the supplier received a special discount from IBM – that is, a special discount beyond the channel price to which he was normally entitled – then as part of the special handheld mechanism, the discount also included a restriction on the maximum selling price  that the supplier could offer to the end customer (e.g., Orshizer, p. 2402, paras. 16-19).  At the same time, the supplier could sell to the customer at any price below the maximum price, without any restriction and at his discretion (Orshizer, p. 2402, paras. 20-24).  On various occasions, IBM approached the Competition Authority and received exemptions in relation to this restriction as well.  The arguments raised about this alone will be addressed separately.
659. For the sake of completeness of this general part, it should be noted that the defendants attached a broad, general and sweeping nature to the claims they raised regarding IBM's alleged involvement on the basis of the special hand mechanism (see, for example, paragraph 58 of the WI summaries, where the matter was argued without detail). However, in practice, in the framework of the price quotes submitted by the suppliers in many of the charges, no evidence was presented that any of the suppliers requested or received a special by hand (special certificates were presented, for example, in the second charge: B.M. Indra (P/229); in the sixth charge: B.M. Tarp (P/534, N/286, N/285, N/189); in the tenth charge: B.M. Galactica (P/410); in the eleventh charge:  M. Oranim (N/214); and in the eighteenth charge: MPR(X) (N/215).  This is sufficient to reflect on the arguments that a significant part of the charges are irrelevant (and the arguments raised in the oral summaries, p. 7001 of the transcript, do not change in this regard).

The exemptions given to IBM over the years

660. Over the years, IBM has approached the Competition Commissioner with requests to grant an exemption from the obligation to obtain approval from the Competition Court for a restrictive arrangement, in accordance with Section 14 of the Competition Law. The inquiries revolved around IBM's conduct vis-à-vis its distributors, classifying the authorized suppliers according to the type of products they are allowed to market and the entities to which they are allowed to sell; And from a certain point onwards, the special mechanism is also in hand.
661. As early as the last century, IBM contacted and received from the Competition Commissioner every few years exemptions for agreements made between it and its authorized suppliers (e.g., paragraphs 1.5-1.1 of N/212).
662. In 2001, the Competition Commissioner granted IBM an exemption from approving a restrictive arrangement to agreements between IBM and its authorized suppliers, including the special by-hand mechanism (N/209, Exemption Request - N/210). The Commissioner insisted that the relationship between IBM and the suppliers does not constitute price coordination, or price dictation; that the suppliers are entitled to determine the price they will charge the end customer; and that the special mechanism in the hand is intended to enable the supplier to receive a special discount beyond the regular discount he receives, in order to lower the price for the end customer; and that in the circumstances of the case, it was found that setting a maximum price for the customer does not constitute a real harm to competition (ibid.).
663. In 2004 – according to what was submitted – IBM approached the Competition Commissioner with a request to extend the validity of the exemption, and apparently was answered that this was no longer required because the restraints fall within the scope of type exemptions (see paragraphs 1.6 of N/212).
664. In the middle of 2008, the Director-General granted IBM an additional exemption to the set of agreements between it and the authorized suppliers (N/211, the exemption request - N/212). On the face of it, and even though the relevant documents were attached without their appendices, it appears that the application at that time, and accordingly also the exemption decision, did not relate to the special mechanism by hand (but see paragraph 157 of Triple C summaries, where it was argued otherwise).  As such, the reason for this was not clarified.  The exemption is granted for a period of five years (ibid.).
665. In May 2013 – shortly before the expiration of the last exemption – IBM filed another request for an exemption for agreements between it and its authorized suppliers, including the special mechanism for Yad (N/208). Such an exemption was granted by the Director-General's decision from the end of 2014 (N/207).  In the exemption decision, it was determined, inter alia, that with regard to the restriction concerning the classification of authorized suppliers according to the type of products they are entitled to market and the entities to which they are permitted to sell, there is sufficient competition in all areas of IBM's activity for the existence of both in-brand competition (between IBM suppliers themselves) and also inter-brand competition (vis-à-vis other manufacturers) (paragraph 3.1 of the decision).  With regard to the provisions of the special procedure in hand, according to which IBM dictates to a supplier who receives a designated discount for a specific transaction the maximum selling price  to the final consumer in that transaction, it was found that there is no concern that the price will serve as an anchor for coordination between suppliers, since it is an individual price for a particular transaction; with regard to the concern that the supplier that won the discount will be in a preferable position compared to other suppliers in a manner that may harm competition between suppliers,  In particular, in the competition for the supply of ancillary services, it was found that this concern is mostly mitigated, inter alia, in view of the existence of inter-brand competition (paragraph 3.2 of the decision).  The Director General mentioned in the decision that IBM had argued before him that the special mechanism in the hand was used to incentivize suppliers to invest in promoting its products and to prevent the problem of the free rider.  At the end of the day, it was found that the arrangement does not raise a concern of real harm to competition (ibid.).
666. The defense raised various defense arguments on the basis of the exemptions granted at IBM's request as stated above, including the exemption granted at different times to the special mechanism in hand.
667. A central argument that was repeated in the defense summaries in various forms is that the special handheld mechanism, which received an exemption from the Competition Commissioner, eliminated and nullified intra-brand competition, is the competition between IBM's suppliers (including the defendant companies); that the exemption decisions express the position of the Competition Authority that once a special is granted by hand, there is no longer room for competition between the suppliers, in order to prevent the problem of the "free rider"; and that the position of the accuser in the indictment contradicts this, while the authority speaks "with two voices" and is deeply involved in the offenses attributed to it (for example, paragraphs 58-62 of the Wee summaries, paragraphs 49 of the Harel summaries).

These arguments should not be accepted and do not justify or legitimize the price coordination between the defendants.