Zeiger further claimed that he was not familiar with the Indra project, which included equipment that Harel is not authorized to sell (e.g., p. 5391, paras. 24-27). In doing so, he sought additional support for his claim that he apparently did not read the correspondence. These claims are also not convincing. This is because this is a project of considerable financial scope - about ₪370,000 according to Harel's proposal - and Zeiger himself testified that in transactions of this magnitude, over ILS 1 million, Gilad should have informed him (p. 5584, paras. 3-5).
- Hence, it should be determined that Zeiger, who was a party to the settlement that is the subject of the first indictment, was a direct party to the e-mail correspondence that established the arrangement for the submission of coordinated bids in Balam Indra, and Zeiger's claims that he did not read the e-mail correspondence should be rejected as unreliable. From the evidence and his testimony there was a clear impression that this was not the case.
- In their summaries, Zeiger and Harel argued that the three e-mail correspondences that Zeiger was a party to were unclear and that it was not clear whether the prices that Shachar conveyed were the prices of the offer to Elta or whether they were sale prices between the suppliers Wee and Harel, i.e., the prices at which Wei offered Harel to purchase the equipment from it (for example, paragraphs 237 and 242 of the summaries). They also sought to understand the fact that Zeiger did not write about additional correspondence, from October 21, 2009 onwards, in which the parties forwarded additional coordinated proposals to each other. On the basis of the aforesaid, Zeiger and Harel claimed that Shahar and Gilad wrote Zeiger to the e-mails only as long as they could be interpreted legally, and that they were careful not to write it deliberately and down the road when it was clear that it was improper correspondence.
I cannot accept these arguments.
Their email correspondence was clear and unequivocal. They speak for themselves. They explicitly refer to a previous conclusion following which they come. The prices are the prices for the customer - to Elta - and not the selling prices of Wii Harel. This is clearly stated in them (e.g., in the margins of P/289 and P/17 "Total Price for Elta"). Nor is there any logic or justification for adding Naveh to the correspondence concerning a sale by Wei Harel. Naveh's inclusion in the correspondence is consistent in the circumstances with only one conclusion of coordination that the three companies agreed to pursuant to the settlement of the first indictment. The attempt to claim that the correspondence to which Zeiger was a party was not clear and that Zeiger could have understood that these were the prices at which Harel would purchase equipment from Wei even contradicted other claims by Harel and Zeiger. This refers to the claims that Harel was not involved in the project at all (paragraph 354 of the summaries); that this is equipment that Harel cannot sell at all (P/223, paras. 86-92); and that Gilad is in any case not authorized to undertake the purchase of equipment (p. 5585, paras. 4-13). Each of these claims undermines the possibility that Zeiger could have understood the email correspondence as an offer to purchase equipment by Harel from Wee, which has no need and has no feasibility according to Harel's own method and in accordance with its claims, and in contrast to their simple and clear meaning: coordinating the price quotes that will be submitted to ELTA.
- Summary of a point: Zeiger was a direct party to the real-time coordination correspondence with Balam Indra and a party to the settlement that is the subject of this indictment, he knew and understood the significance of the correspondence that was made following a previous arrangement that was forged in the meeting in which he participated, and by his conduct he even approved at least implicitly and allowed the execution and implementation of the concrete arrangement in relation to Balam Indra.
Additional Defense Arguments
- Wei and Oshri, as well as Zeiger and Harel, raised additional defense arguments in their summaries. In general, it can be said that a common denominator of a significant part of the defense's arguments is that for one reason or another there was no possibility of competition between the suppliers - Wee, Harel and Triple C - in Balam Indra, because Wei was the only one that could have won the BMC; Because Mordechai chose to begin with, and that for these and other reasons, there was in fact no feasibility of competition, and therefore ELTA's request for price quotes was nothing but a false representation of competition and fictitious pricing.
- We will now deal with these arguments and it appears that they should not be accepted on their merits and that they do not change the conclusion that a restrictive arrangement was made between the parties for the coordination of the proposals in Balam Indra.
- Before discussing the arguments raised, we would like to emphasize: Uncertainty is the basis of competition. Even if there was an advantage, even if Elta also estimated that at the end of the day she would communicate with Wei, this does not justify coordinating proposals or qualifying him. A competitor, even if he believes he has a significant advantage, is exposed to the possibility that another will make an attractive offer that will put his win at risk or require him to offer a better price. Each competitor must independently submit the best offer at the best price under conditions of uncertainty. Coordinating proposals removes uncertainty and fear and enables the submission of a proposal that is not optimal. There is no justification for this.
The claim that this is a "Blu-ray architecture" with respect to which there can be no competition
- The defense, especially Wei and Oshri, argued that there was no feasibility of competing in Balam Indra, based on a previous project - the Bluery project - which Wei won at the end of 2008.
This is the gist of the argument: In the Blueray project of civil appeal designed by Mordechai, Wei presented a solution that contained a technological change or innovation - which Wei calls "Blueray architecture" - using IBM computer servers along with NetApp storage systems; Wei had the knowledge, experience, and expertise in connection with the solution; Wei won the project in Laurie; An agreement was made between the Civil Appeal and Wii according to which Wii undertook to give the Civil Appeal a high discount, 53.2%, from the IBM price list, while the Civil Appeal undertook not to carry out further pricing in the Bluray project (N/104); According to Wei and Oshri, this undertaking also applies to other projects that were based on the "Bluray architecture", i.e., on a solution configuration similar to that of the Bluray project; The Indra project, which was also designed by Mordechai, relies on a similar architecture as mentioned; Therefore, there was no feasibility at all for competition in the Indra project, and in fact, Wei was chosen in advance by Mordechai to provide what was required in the Indra project.
- On the factual level, the arguments should not be accepted in the format in which they were raised. On the legal level, they do not assist the defense. We'll explain.
- First, the phrase "Bluery Architecture" that Wei and Oshri reiterated in their claims is intended to support the claim that this is a unique technological solution that only Wee can actually provide. However, the evidence revealed otherwise. Mordechai, who designed the Bluray project (p. 1166, s. 19-21), testified again and again that "there is no such thing as the architecture of Bluray" (p. 1169, s. 15-24, p. 1234, s. 11-12), that there was "nothing special" in the Bluray project (p. 1166, s. 22 - p. 1167, s. 1), that these were computer products that could be bought from anyone who wanted them (p. 1170, s. 4). that all the suppliers were fine and that Wei was chosen on the basis of the price she offered (p. 1198, paras. 10-23). Moti Vered (Vered), who was, among other things, the head of the Bluray project (N/13), testified that he did not remember that this was a special architecture that only Wii could provide, that is, that it was servers that any provider could provide (p. 6406, paras. 11-19). In fact, Oshri himself testified that even though he worked to formulate the solution in Bluray after he was exposed to an existing technology that was not common in Israel, Value did not develop or invent anything, and in the end it is like a "recipe for a cake" and as soon as a civil appeal is made with a request on the basis of the bill of quantities, any doubter can provide it (p. 4836, s. 6 - p. 4837, S. 9; See also Oshri's testimony that the solution at Lowry was not a revolution but rather a certain improvement, p. 4377, paras. 18-19, and see also p. 4381, paras. 19-23, p. 4388, paras. 6-13, where he testified that Wei did not invent the product but did research and marketed it to the customer).
- Second, the claim that the civil appeal undertook to engage exclusively with Wei both in the continuation procurement of the Bluray project and in any future project based on the "Bluray Architecture" was based primarily on the Bluray Agreement (N/104). However, a perusal of the agreement shows that it does not contain any obligation in relation to future or other projects other than the Bluray project itself (paragraphs 3-4 there). It was clear from Oshri's own testimony that there was no undertaking by either of the parties in the Bloray Agreement - a civil or a civil appeal - with respect to other projects, including the "Bluray Architecture", and in relation to these "sufficient trouble at the time" (p. 4375, paras. 5-21; In Mordechai's testimony at p. 1168, paras. 12-17 there is no mention of Wii and Oshri in it, it does not relate to other projects other than Bluray, and in any event Mordechai testified that he was not even familiar with the agreement - N/104; The same is true with respect to the excerpts referred to from the testimony of Ilan Shkedi (Shkedi), pp. 1899-1900, which did not relate to other projects in the "Bluray Architecture", and referred to P/144 and the acquisition of a continuation of the Bluray project itself). Hence, even though, as Mordechai testified, the technical specifications of the Indra project were similar to the specifications of the Bluray project (p. 1169, paras. 5-14), there is no basis for the claim that Elta undertook to purchase the equipment required for the Indra project, which is separate from the Bluray project, but it is not true. In addition, the price quote of Wii for Balam Indra was based on a discount of 47% (as appears at the top of the proposals N/233, P/158, P/160, P/161, Testimony of Mordechai, p. 1170, paras. 7-8) and not on 53.2% as stipulated in the Bluray Agreement (P/104). In other words, Wei itself did not see Balam Indra in real time as part of the Bluery Agreement.
Beyond that, it should be noted that from Oshri's testimony it appears that according to his own approach and also in relation to the Bluray project itself, ELTA's commitment in the Bluray agreement was not intended to prevent Elta from approaching various suppliers for quotes in the project, but only to prevent further negotiations with the winner - the additional pricing - and the additional - Cat Blue Ray itself, which according to his own opinion, The Blue Ray Agreement did not prevent Elta from approaching various suppliers with a request for price quotes, but only to lower the price (p. 4830, s. 12 - p. 4831, s. 10; and see Mordechai's testimony that in practice he used to ask for additional price quotes in the Bluray project itself, and in order to check the prices, p. 1145, s. 22-2, p. 1154, s. 15-24).
- What emerges from the aforesaid is that on the factual level, the arguments according to which it was Mashvah that formulated the solution in the Bluray project or that in view of the agreement between Wii and Elta in the Bluray project, there was no feasibility of competition in the Indra project (and this is regardless of the fact that the claim of lack of feasibility for competition does not justify coordination). In fact, Oshri also testified that when he saw Mordechai's request for a price quote, he thought that even though Levy had an advantage over Balam Indra in light of the technological characterization and previous experience with Bluray, this did not mean that the project was in Wee's pocket (p. 4458, s. 16 - p. 4459, s. 23).
- On the legal level, it should be noted that the claims by virtue of the Bloray Agreement do not benefit the defendants. Even if we accept the argument that in the Bluery agreement ELTA undertook to engage with Wei in projects with a similar technological characteristic - and we saw that such a claim should not be accepted - and even if we were to accept that a request for quotations ostensibly constitutes a contractual breach against Wee, this would not have allowed an arrangement to coordinate bids in contravention of competition law. As it was ruled in relation to a similar argument: "... Breach of contract, even if there was such a thing and even if it caused the SRS appellants an economic problem, cannot justify a violation of the law. The remedy for such a violation is to take the appropriate legal measures and not to 'take the law into their own hands,' at least in terms of ignoring the prohibitions in the law" (Criminal Appeal 5672/05 Tagger in Tax Appeal v. State of Israel, at para. 112 (October 21, 2007)). Oshri testified that Wei did not sue or apply in writing to a civil appeal on the grounds of breach of contract, in general or in relation to the request for quotations in Balam Indra in particular (p. 4828, paras. 3-22).
- In view of the above, the defense's arguments should be rejected in reliance on the Bluery project.
- A close argument that was raised is that Wee had taken preliminary actions with Mordechai, even before the request for price proposals, and that in practice, Wee was chosen to carry out the Indra project even before the request, which was a fictitious pricing.
This argument should also not be accepted.