When one company wants to acquire another, the Competition Authority is used to examining familiar questions such as the companies’ market share, their competitors, whether they will have the power to raise prices after the merger, and whether other players will be able to continue competing with them. In recent years, however, another question arisen which was once secondary at best: who holds the customer data?
The Competition Authority recently published a new draft document on examining mergers intended to replace a document that is fifteen years old. It refers at greater length to the power that derives from holding data. Adv. Tobie Harris is director of the Markets Department at the Competition Authority, and she is the person responsible of managing all examinations of mergers, including the data question.
"These days, approval of a new merger between companies can raise fears because of the data issue," Harris said speaking to "Globes". "It’s something that we examine in greater depth and we try to understand its implications in some of the deals that come before us."
Harris, 39, immigrated to Israel alone at age 19, and came to the Competition Authority during her internship period as lawyer. Over the years she has filled several posts at the Authority, and in 2018, when the Markets Department was set up, she was appointed head of the finance sector team. In the summer of 2023 she became deputy director of the department, and in the spring of this year she was appointed director.
The department of which she is in charge is one of the main crossroads at which the state meets the private sector. Its 25 employees, two thirds of them economists and the rest lawyers, deal with 200-250 mergers annually, and with dozens of collaborations and arrangements between companies. The department has five teams: finance; transport and tourism; food and retailing; energy and infrastructure; and health. The department also participates in government discussions on regulation.
Ability to dominate the market
Harris suggests thinking about data as an element with significance for business just like that of raw materials and infrastructure. "There is information that is a business input," she says. "Facebook profits from data and it can be seen as an input and as valuable. As a leading company in some sector I can give myself preferential access or block others from touching this data."
The risk becomes greater when the information enables a company to understand not only the market but also the customer before it. As a hypothetical example, Harris cites the merger deal between Harel and Isracard that the Competition Commissioner disallowed. "If Harel, as a leader in insurance, is the only company with data on Isracard customers, and is able by means of it to identify unsophisticated customers who are prepared to pay more, it can deliberately channel high prices to these customers," Harris explains. "It’s like profiling certain customers, to know through their behavior as consumers with their credit cards how they pay for things."
The example is not intended to suggest that Harel would actually have behaved that way, but to illustrate the kind of issues that the Competition Authority seeks to examine. "It really is the subject that is the future of certain merger deals, and in general," Harris says. "If there’s one person who has access to this bonanza and others don’t, that person can drive them out of competition and in effect take over the market."
This fear is a focus of attention of antitrust authorities around the world. A new OECD report describes how the use of detailed data enables algorithms to identify customers who might switch to a competitor and to offer them in particular a lower price, and at the same time to identify customers more prepared to pay and to charge them a higher price.
A further example that Harris cites is the examination of the merger between Sugat and StoreNext. Superficially, these are companies from different worlds. Sugat is a food supplier while StoreNext provides information and data on the retail market. But the connection between them brings home how data can become a competitive advantage. "We saw that Sugat had a high standing in all kinds of markets, and the fear is that if it has preferential access to StoreNext, then its ability to identify which supermarket has started to buy more from another supplier - that’s a great prize in the hands of a leading supplier," Harris explains.
The test
As far as the Authority is concerned, the mere existence of a database is not enough to make warning lights flash, and the examination is more complex. Harris explains that the Authority has to examine what information a company holds and to what extent it is unique. After that, it examines what can be done with it, and finally what its various uses might do to competition.
"It doesn’t mean that a company that holds information on customers automatically raises fears about competition. Everything is examined in-depth, on its merits," she says. "In the case of every merger, we ask the question of the merger’s delta: how the world is different with the merger and without it. If it’s a matter of data that plenty of different companies possess, then it’s not such a big deal that everyone has it. If it’s high-quality data that no-one else has and it reaches someone with a large market presence, that’s something else."
AI and non-competition
AI takes matters a step further. The reason for that lies in one of the less talked about aspects of competition: uncertainty. "One of the things that creates competition is uncertainty," Harris says. "A company considering a business move operates under uncertainty. In the end, this is a large part of the competition game. I refrain from raising prices because I don’t know whether it will pay off for me, or I open a branch on the basis of partial knowledge in the hope that it will go well."
Data, she says, can change this. "If someone leaps over the uncertainty with the aid of data, that changes the rules of the game. Knowing the market data is often a one-directional game changer."
A database that in the past required teams of analysts and prolonged research to be useful can become the basis of a system that makes decisions in real time, identifies patterns, and responds almost immediately to changes in the behavior of a customer or a competitor. "AI is entirely built on data," says Harris, "For all the biggest companies, whether they are social networks or search engines, their data is like the oil, the gold, or the engine of the new economy."
The algorithm question
This is where the next problem to trouble antitrust authorities around the world comes, in, and it isn’t just to do with mergers. According to the OECD report, one of the main fears is a scenario in which several competitors use the same pricing software provider. In that situation, the algorithm could become a main link in the chain, receiving information from several companies and recommending each of them how to price. Even when the final price is calculated separately for each company, the use of competitors’ information to train the algorithm could rais fears.
This applies particularly to markets in which prices change quickly and are mostly on view on the Internet. An algorithm can monitor competitors continuously to see who has cut prices and respond almost immediately. According to the OECD, such systems could also make it easier for manufacturers to identify retailers who deviate from the recommended price and react swiftly, and thus make vertical price arrangements more effective.
Further on in the discussion is a question that antitrust authorities still struggle to answer: What if the algorithm learns that it isn’t worth competing? The OECD says that some antitrust authorities in the G7 countries are examining the theoretical possibility of "silent coordination" between learning pricing systems. Companies will separately program algorithms with the aim of maximizing profit, but, at least theoretically, the systems could learn that the most profitable strategy is to avoid a price war.
The report stresses that at this stage this is a fear that has not proved real on any significant scale, and there is only a small number of cases in the area of algorithm pricing around the world. The authorities themselves are currently investing more in studying the market, monitoring, and building technological capabilities than in widespread enforcement.
Investigating a traditional cartel involves looking for emails, messages, or meetings in which competitors fixed prices. With algorithms, the evidence lies in the code, in the way in which the model was trained, and in the information that was fed into it.
"The law doesn’t need amending"
Despite the technological changes, Harris does not believe that at this stage changes are required in competition law. "The Competition Law is drafted in very general terms. It doesn’t go into specifics and it enables us to give it content," she says. "We don’t need an amendment in order to adapt ourselves. We need to study the business itself."
Harris says that the Authority is also involved in broader government discussions on AI and data, including in the financial sphere. "In general, the concept is that the information does not belong to whoever gathered it, but to the person whom it concerns," she says. As far as she is concerned, the main challenge for the Competition Authority is not necessarily to catch more deals, but to know what to look for in the deals that already come before it.
"I don’t think that we’re missing something," Harris says. "Every merger between large companies works on turnovers and the size of the deal. The problem is not the net that catches the mergers, but when the merger comes along to know how to talk to the companies and to understand things that are somewhat behind the scenes."
Published by Globes, Israel business news - en.globes.co.il - on August 30, 2026.
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