On April 26, 2026, the Israel Competition Authority (“ICA”) published for public comment a draft of new guidelines for merger review in the Israeli market (the “New Guidelines”). The New Guidelines will replace the previous guidelines issued by the ICA in 2011, which focused solely on horizontal mergers and, for some time, have no longer reflected the ICA’s actual enforcement policy.
The New Guidelines reflect a tightening of the ICA’s merger control policy, while expanding the focus of review from horizontal mergers alone to a broader range of scenarios, concerns, and theories of competitive harm. The New Guidelines outline a very broad spectrum of circumstances in which a competition concern may arise, in a manner that could potentially capture a very large number of mergers consummated in the Israeli market each year, although it remains unclear when the likelihood and magnitude of such concerns will in practice be sufficient to result in the blocking of a merger.
The New Guidelines are highly comprehensive and address new issues that were not analyzed in the 2011 guidelines. The policy governing the review of horizontal mergers now includes legal presumptions which, if applied, may make it more difficult to approve mergers between competitors in most industries in Israel. The approach reflected in the New Guidelines amounts to a certain inversion of the burden established by law: from a situation in which the Commissioner must oppose a merger if she can establish a reasonable concern that the merger as proposed would significantly harm competition; to a situation in which the burden of establishing a concern is relatively low, whereas the burden of persuading the ICA that the merger does not in fact harm competition is more demanding and is effectively placed on the parties.
For the first time, the Guidelines systematically set out the ICA’s current, stricter policy with respect to the approval of vertical and conglomerate mergers. The Guidelines also address for the first time the merger control policy applicable to mergers involving technology platforms and expand the discussion of issues such as harm to potential competition, acquisitions intended to eliminate an early-stage competitor (“killer acquisitions”), and serial acquisitions.
At the same time, the ICA makes clear that merger review is not based on the uniform application of a single methodology, but rather depends on the circumstances of the particular case, the features of the merger, and the available evidence. Accordingly, it reserves flexibility to choose the analytical framework it deems appropriate in light of the circumstances of each case, without committing itself to any clear methodology or set of standards.
The New Guidelines are open for public review and comments until June 14, 2026.
Set out below are the principal changes expected under the New Guidelines and their practical implications.
New standards for the review of horizontal mergers
Under the New Guidelines, the mere existence of “competitive rivalry” (or the potential for such rivalry) is sufficient to classify a transaction as a horizontal merger, and this does not depend on a market definition. In reviewing horizontal mergers, the ICA will focus on concerns relating to unilateral effects — namely, the possibility that the merger will increase the merged firm’s incentive or ability to worsen commercial terms, for example, by raising prices — as well as coordinated effects, namely the possibility that the merger will increase the likelihood of coordination among competitors in the market or reinforce existing coordination. The concern regarding unilateral effects essentially tracks the degree of competition and the intensity of competitive rivalry between the merging firms. The ICA clarifies that it will consider, among other things, the views of the merging parties, competitors, and customers, as reflected in their internal documents prepared in the ordinary course of business, and that there is no obligation to define a market and the assessment is not contingent on any minimum market share threshold.
In reviewing coordinated effects, the Authority will take into account, among other things, the existence of a small number of competitors, high barriers to entry, the disappearance of a “maverick,” transparency of competitively sensitive information (including technological monitoring tools), cooperation between the parties in markets in which they do not compete, and ownership links or rivalry across multiple competitive arenas. The draft is asymmetrical in its treatment of these circumstances: generally, their presence increases the concern regarding coordination, but their absence does not necessarily dispel that concern.
One of the significant innovations in the New Guidelines is the use of concentration measures and market shares to establish rebuttable legal presumptions regarding the potential for significant harm to competition, triggered at relatively low concentration thresholds, while clarifying that mergers that do not cross these thresholds may still be prohibited. By comparison, the 2011 guidelines used similar concentration indicators to identify mergers that generally did not raise competitive concerns and therefore fell within a type of “safe harbor.” Indeed, in the 15 years since the 2011 guidelines were published, dozens of horizontal mergers were approved in markets where concentration indicators exceeded the threshold that will now give rise to a presumption that the merger is problematic.
The Guidelines also contemplate blocking mergers based on a theory of harm to potential competition, including close scrutiny of acquisitions of small, innovative, early-stage companies where there is concern that, absent the merger, they could have developed into significant competitors in the future (“killer acquisitions”).
Non-horizontal mergers: foreclosure, and access to data and sensitive information
The New Guidelines significantly expand the review of non-horizontal mergers, focusing on concerns regarding “foreclosure effects” — namely, the ability and incentive of the merged firm to take steps that impair competitors’ ability to compete. In the context of vertical mergers, the ICA will focus mainly on concerns relating to foreclosure of access to essential inputs, impairment of interoperability, or a worsening of access terms. Particular emphasis will be placed on cases in which data serves as an input, such that mergers that give the merged firm the ability and incentive to block competitors’ access to data may raise significant concerns. The ICA will also examine concerns relating to customer foreclosure, namely the possibility that the merged firm may leverage its control over a downstream company to divert purchases away from upstream competitors to itself.
With respect to conglomerate mergers, the principal concern is the foreclosure of competitors, including through tying of products — that is, forcing their joint purchase or offering them at a bundled discount. The ICA will also examine the merged firm’s ability to target tying offers to particular customers, especially through the use of data and artificial intelligence tools, as well as the acquisition of competitively sensitive information regarding competitors.
Defense arguments under heightened scrutiny
The New Guidelines reflect a high degree of skepticism toward dynamic merger analysis centered on the argument that the entry of new competitors is expected to constrain the merged firm’s market power — an argument on the basis of which dozens of mergers have been approved in the Israeli market in recent decades. The ICA states that it will require the merger parties to demonstrate that new competitors’ entry is timely, likely, and sufficiently effective, and that the greater the concern arising from the analysis of concentration levels and market shares, the greater the degree of certainty required. Similarly, the ICA clarifies that efficiency claims will be accepted only where it can be shown objectively that the efficiencies are merger-specific, quantifiable, likely to materialize within a reasonable period, and likely to be passed on to end consumers.
Market definition — a means, not an end
The New Guidelines clarify that market definition is a tool for assessing harm to competition, not an end in itself. Accordingly, the ICA will adopt a flexible approach, defining the market in accordance with the theory of harm under examination, and in some cases may not require any formal market definition at all. The focus of the analysis will continue to be the degree of substitutability between products or suppliers, taking into account customers’ willingness to switch to alternatives in response to a price increase or deterioration in terms, including by means of the hypothetical monopolist test.
Additional issues in merger review
The New Guidelines also expand the discussion to a range of additional scenarios that may raise competition concerns, including: small serial acquisitions which, cumulatively and over time, may establish market power; the creation or increase of a partial ownership interest in a competitor; mergers involving multi-sided platforms characterized by network effects and concerns regarding self-preferencing; and mergers that may strengthen the market power of buyers and harm suppliers.
Practical implications
Merger transactions now face a higher threshold for review and approval than has prevailed over the past decades, a trend that has already become evident over the past two years. Parties to a merger are required to conduct a more in-depth assessment of the merger’s prospects before entering into a transaction and to prepare for a prolonged, rigorous, and thorough review, including advance preparation of an adequate professional and evidentiary basis to support the merger. In light of the clear trend toward stricter enforcement embodied in the New Guidelines, the importance of judicial review of the ICA’s decisions also increases.
This publication is provided as a general service to the firm’s clients and friends and does not constitute a substitute for specific legal advice. We do not recommend acting on the basis of the information set out above without obtaining legal advice from qualified professionals based on the specific facts and circumstances of each case.
