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Global Competition Review – Israel blocks major tech services merger


Israel’s Competition Authority has blocked a proposed tie-up between two of the country’s three largest providers of media and advertising analysis services, nearly a decade after the companies first attempted to merge.

In its decision published on Monday, the enforcer said the tie-up between Ifat and Bazila may harm competition and affect consumers in the market for business intelligence, media research and advertisement monitoring services.

Bazila and Ifat are two of the country’s three largest providers of those services, according to the authority. They produce insights for social media and advertising businesses about their operations and provide specific marketing strategy recommendations.

Business intelligence analysis uses algorithms to gather information on performance indicators  such as positive and negative mentions, as well as other data about online consumer behaviour.

Both companies notified their deal to the authority in April, which opened a review later that month.

The enforcer found that one of Ifat’s subsidiaries already has a high share of the market for collecting and analysing more traditional forms of advertising information from newspapers, radio and television programmes. With this deal, the two companies would further control 50% of the online analysis market, giving Ifat a monopoly for both traditional and new media analysis markets.

While the companies did offer remedies, the agency concluded that the proposed commitments were not enough to fix its competition concerns, a spokesperson for the authority told GCR.

Ifat did not respond to a request for comment. Bazila could not be reached for comment.

Hagai Doron, a partner at S Horowitz & Co in Tel Aviv, said that the authority rarely objects to mergers in Israel, although this case seems to be “an exception” as the companies already tried to merge nearly a decade ago but that deal was also opposed.

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Ifat and Bazila previously notified the authority of an earlier proposed tie-up in 2012. But the authority warned the companies at the time that it would block the deal because it would restrict competition in the market, so they abandoned their plans with a view to trying again when the market had evolved.

Doron noted that the circumstances have changed since then, but in the opposite direction, since the deal would now cause a duopoly to emerge in a sector in which Ifat already controls high market shares.

The authority previously blocked a three-to-two deal in the lens market earlier this year. EssilorLuxottica’s subsidiary Shamir attempted to purchase rival optical products producer Sagam, but the enforcer said this would not only cause a duopoly, but would also give the merged companies more than 50% of shares in the lens market.



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