Written by: Haim Ravia, Dotan Hammer
The Israeli Competition Authority recently signaled, in a conference celebrating its 30th anniversary, that the regulatory Merger Directive may soon be updated to weigh the factor of data ownership concentration in merger approval applications, even when the merging companies are not in direct competition.
Data ownership concentration was a pivotal concern for the regulator in its decision to deny the merger between Harel Insurance and Isracard in February 2024. The key concern was that Harel might misuse consumers’ data when it intersects with credit information to discriminate in pricing.
The Merger Directive has not been updated in 14 years. The forthcoming update could mean a denial of mergers where excessive consumer data concentration could lead to efficient consumer “targeting”, especially when AI systems are involved. The justification rests with the expected increase in data-related barriers to entry or expansion, hindering competition and further solidifying large enterprises’ control in the field.
