Legal Updates

A foreign company which is in Israel a monopoly that affects the Israeli market may be subject to Israeli anti-trust rules

August 16, 2021

A class clam was filed in Israel against Qualcomm – an American company based in San Diego which develops, produces and sells components used for electronic communications – due to exploiting its monopolistic power by way that infringes competition and causes cell phone prices to rise around the world, and particularly in Israel.

The Court refused to reject the claim a priori due to lack of jurisdiction of an Israeli Court and held that because the foreign company has an influence on market prices in Israel, it is subject to the restrictions set forth under Israeli Law. A monopoly is a person or company whose share in the total supply of assets or in their purchase, in the provision of services or in their purchase in general, exceeds 50% of the relevant market; or a person or company holding a person who holds significant market power in relation to the supply or purchase of assets, or in relation to the provision or purchase of services. Israeli Law imposes two main restrictions on such monopoly: A prohibition on refusing to supply the monopolistic product for unreasonable reasons; and a ban on abusing its monopolistic status in a manner that may harm the public or infringe upon competition. The antitrust rules apply also on a foreign company, even though not incorporated in Israel, provided that such company's activity has a direct, material and deliberate effect on competition in Israel. Here, although the company is incorporated outside Israel, it constitutes a monopoly in the field of communications and due to its direct, material and deliberate effect on the Israeli market, it is subject to restrictions set forth under Israeli Law and thus the motion for a class claim will be heard in Israel.