Israeli Regulator Considers Over 17 Million Shekel Fine Against Sunny Cellular for Anti-Competitive Practices

The Israeli Competition Authority announced on Monday that it is considering imposing a financial penalty exceeding 17 million shekels on Sunny Cellular Communications, the official importer of Samsung mobile devices, accessories, and spare parts in Israel. The potential fine relates to alleged violations of the Economic Competition Law, which prohibits direct importers from harming parallel importers.

This case marks the fourth enforcement action by the authority since a legal amendment targeting harm to parallel imports took effect in September 2023. The authority's investigation began after Sunny complained to Samsung Israel about parallel imports of mobile phones from the Palestinian Authority territories. The parallel importer presented itself as an authorized Samsung dealer and offered warranty and service through official service centers approved by Samsung.

Sunny claimed to Samsung that the parallel importer’s conduct risked misleading consumers regarding official authorization and warranty coverage. However, the Competition Authority alleges Sunny went further by complaining that the parallel-imported devices were superior models sold at lower prices. Sunny reportedly provided Samsung with details of specific devices imported in parallel and demanded Samsung resolve the issue by regulating territorial sales and even halting sales to the Palestinian Authority.

The authority stated that such actions could harm or completely stop parallel imports, violating competition law. Sunny has the right to present its arguments before a final decision is made. The legal amendment also restricts direct importers from sharing information with manufacturers in ways that could track supply chains to the detriment of parallel imports or competition.

Alongside this case, the Competition Authority has launched a broader enforcement initiative targeting 13 major direct importers across various sectors and has amended rules on exclusive distribution agreements to prevent suppliers from blocking parallel imports into Israel.