Shoe Importer Fined Over $3 Million for Blocking Personal Imports

The Israel Competition Authority has reached a consent decree with IEL, the importer of Rockport shoes and owner of the Originales retail chain, requiring the company to pay over 3 million shekels to the state treasury. This action stems from allegations that IEL harmed personal imports by blocking Israeli consumers from accessing the U.S. Rockport website.

The issue arose due to significant price differences between Rockport shoes in the U.S. and Israel. Israeli consumers discovered they could purchase shoes cheaper by ordering them to a U.S. address and then having them shipped to Israel. This practice became a point of contention in negotiations between Originales and the global Rockport brand.

According to the Competition Authority, Originales representatives raised the price disparity issue with the parent company. Rockport then proposed blocking Israeli users from its U.S. site and redirecting them to the Originales Israeli website. Originales provided its Israeli website address for this redirection. While Originales claimed this solution was unsuitable for their negotiation point, the Authority viewed their cooperation and provision of the website address as enabling the obstruction of personal imports.

Following the Authority's investigation, access to the U.S. Rockport website was restored for Israelis. This case is part of a broader effort by the Competition Authority to combat official importers' attempts to stifle competition from foreign purchases. A September 2023 amendment to the Competition Law expanded prohibitions against importers taking actions that could harm parallel or personal imports, including blocking supply sources.

Originales' agreement includes paying over 3 million shekels without admitting wrongdoing. In exchange, the Competition Authority will not pursue further enforcement actions against the company or its officers for the actions covered by the decree. IEL is part of the Al-Shered group, controlled by the Irani family, which also owns Factor 54 and other international brands. The Authority emphasizes that personal imports are a crucial competitive tool that it aims to protect, as they exert downward pressure on local prices.