Legal updates

Market distribution in participating in public tenders is a criminal offence also of the managers of the coordinating companies

August 21, 2018

A number of companies that operated in the water meters market coordinated geographical distribution among the consumers' market, regarding the production, installation, renovation and conversion of water meters. The coordination was reflected in the fact that they decided between them which company would approach which public tender.
The Court held that the Restrictive Trade Practices Law is intended to protect the existence of free competition and therefore prohibits any restrictive arrangement - any arrangement made between persons conducting business, according to which at least one of the parties restricts itself in a manner that may prevent or reduce business competition between it and the other parties or part thereof, or between it and a person who is not a party to the arrangement. Here we have a forbidden horizontal restrictive arrangement (an arrangement between competitors or potential competitors, as opposed to a vertical arrangement that takes place between those who are on the different sides of the chain of commerce, such as supplier and customer), and therefore the Court convicted both the companies that coordinated between them and their managers.