This presentation by the Israeli Antitrust Authority was made during the discussion on "Price discrimination" held during the 126th meeting of the OECD Competition Committee on 30 November 2016. More papers and presentations on the topic can be found out at www.oecd.org/daf/competition/price-discrimination.htm

1. THE NESHER CASE
Roundtable on “Price discrimination”
Imanuel Brachfeld, Adv
Israeli Antitrust Authority

2. Nesher - the cement monopoly
Medium
concrete
manufacturers

3. Legal background
Instructions to a monopoly
•Article 30 to the Israeli Antitrust Law:
• Business competition … is harmed as a
result of the existence of a monopoly or
the behavior of a monopolist.
• A risk of substantial harm to competition
… as a result of the behavior of a
monopolist.

4. The discounts
• The heavy discounts and the generous credit
terms provided to the large concrete firms
might have had an adverse competitive effect
of a discount policy applied by Nesher.
• The discounts probable effects:
• Diminishing the possibility that large concrete
manufacturers import cement.
• Effecting competition in the concrete market
(the favorable terms led the large
manufacturers to choose high profit instead of
competition)

5. :Probable outcomes of the discounts
• The competitive situation in the cement
supply – a monopoly of about 90%
• The supra-competitive equilibrium of the
largest concrete manufacturers which do
not use their favorable terms to compete

6. Remedy - divestiture or prohibition?
• Behavioral remedy – prohibition of rebate
of over 4%
Lower prices for cement manufacturers
Changing the equilibrium + import?
• Structural remedy – divestiture of the Har-
Tuv cement plant
Local manufacturer - competition