"There will be a revolution for consumers"

Antitrust head: The concentration committee's conclusions, if implemented, will cause prices to fall.

"There will be a revolution here for the good of the public, consumers, all of us," Antitrust Authority director general David Gilo told "Globes" in an interview, following the publication of the interim recommendations by the Committee on Concentration in the Economy and the Trajtenberg committee on socioeconomic change.

The Trajtenberg committee will reportedly recommend amending the Antitrust Authority Law to turn the agency from a reactive agency into a proactive one with the authority to break up monopolies and oligopolies. It also recommends increasing the Antitrust Authority's budget.

Gilo told "Globes", "There is a national consensus on competition and the benefit of consumers, and they are the common denominator of the protest of the past few months. The protest began against the high cost of living, and this can be the result of a lack of competition. The fact that the concentration committee is providing a tail wind for calculations on competition and the strengthening of the Antitrust Law and the Antitrust Authority Law is very important for competition, because the Antitrust Authority is responsible for fostering competition for the good of consumers.

"The nice thing here is the consensus on these values by sectors of the economy - the middle class, the poor, the haredim (ultra-orthodox), the center, the periphery - after all, we are all consumers. There are no conflicts of interest between the different sectors."

What is the advantage of promoting competition as a solution to the cost of living problems compared with other solutions, such as tax reform or sharing the budget pie differently?

Gilo: "The budget consequences of fostering competition are far less far-reaching than the budget consequences of other important reforms. It's not necessary to take billions of shekels from the defense budget to promote competition. You promote competition only at the expense of the monopolistic rents of the powerful companies, which are illegitimate anyway, distort the allocation of resources, and are inefficient."

Will this directly affect prices for apartments, consumer products, and so on?

"When companies have to break up out of oligopoly concerns, and other players enter the market, and when a government company allots its assets in a pro-competitive and pro-consumers way, it will cause prices to fall. The committee's conclusions, if implemented, will cause prices to fall. Not next week, but prices will fall without question.

"For example, if the party that allocates the rights to power stations thinks about competition, it means that the price of electricity will fall because of competition between power stations, and consumers' electricity bills will fall. Manufacturers' electricity bills will also fall, so production costs of products will fall, and the price adjustments of those products will also ultimately fall.

"The same is true for natural gas. If the party that allocates natural gas drilling rights disperses these rights, competition between the drilling companies should cause the price of natural gas to fall. That will lead to lower electricity prices, and all the positive consequences related to lower electricity prices that I mentioned before will happen."

What do you think about the Trajtenberg committee recommendations about increasing the powers of the Antitrust Authority?

"I cannot comment on the Trajtenberg committee recommendations, because they have not yet been officially published, but I am sure that the committee will bring more good news to the public. Its mandate includes dealing with the conglomerates, the high cost of living, and industry competition in general. I am sure that it will make a major contribution to the objectives of fostering competition and social welfare."

Have you heard that a Facebook page has been opened in support of the concentration committee, as part of the socioeconomic forum that is emerging to reduce oligopolies?

"No. Regrettably, I don’t have Facebook, but if I did, I would like this group."

What feedback are you getting from the public?

"I feel that there's broad support for the committee's recommendations. I hear a lot of positive feedback, especially from groups I know in the economy. The only time and place where I frequently meet people I don’t personally know is on weekends, when I'm at the gym. There too, I get positive feedback."

You used to go the gym several times a week. Now only on weekends?

"Things change. My public job takes up a lot of my time, and what's left - a few hours on the weekend - I use well. But I'm not complaining; there's nothing to complain about."

Published by Globes [online], Israel business news - www.globes-online.com - on September 22, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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