Competition Authority Chief Criticized for Blocking Deals

Michal Cohen, head of the Israel Competition Authority, is facing criticism for her recent decisions, particularly the blocking of Union Group's acquisition of Cal (Credit Card Company). While the authority cited concerns over data flow from Cal to Union's subsidiary, Super-Pharm, potentially harming competition, the article argues this was a "whim" or "insistence" seeking professional justification.

The core concern raised by the Competition Authority was that Cal's extensive customer data could be transferred to Super-Pharm, a major pharmacy chain, giving it an unfair competitive advantage by allowing targeted marketing based on competitor purchasing habits. The article acknowledges this is a "huge power" and a "potential danger to competition."

However, the author contends that the Competition Authority's role is to set conditions for mergers, not outright block them. Instead of prohibiting the deal, Cohen should have imposed strict regulations on data sharing, with severe penalties, including jail time, for violations. The article contrasts this with the approval of the Clal-Max merger, suggesting it was a mistake the authority is now trying to avoid repeating, even at the expense of fair competition.

The piece also highlights the blocked acquisition of Isracard by Harel Insurance, another instance where the authority cited data transfer risks. The author questions the inconsistency, noting that both Cal and Isracard possess vast databases, and argues that blocking Harel while allowing Clal-Max creates an imbalance, "emasculating" Harel while empowering Clal-Max.

Ultimately, the article criticizes Cohen for what it calls a "small head," suggesting she is prioritizing avoiding past mistakes over fostering competition. It argues that the blocked deals harm the economy by delaying competition in the credit card and banking sectors, which are in dire need of new entrants.