Lower court finds Israeli jurisdiction over foreign cartel Julie Jackson
Lower court finds Israeli jurisdiction over foreign cartel - GCR - Global Competition Review 5/7/19, 2)33 PM
https://globalcompetitionreview.com/article/1191023/lower-court-finds-israeli-jurisdiction-over-foreign-cartelhttps://globalcompetitionreview.com/article/1191023/lower-court-finds-israeli-jurisdiction-over-foreign-cartel Page 3 of 7
Credit: iStock/Roberto
An Israeli district court has found that cartel victims can bring claims against a foreign defendant in the optical disk drive and cathode ray tube antitrust litigations, though the alleged conduct occurred outside the country.
On 2 May, Royal Philips Electronics lost on its motions to dismiss two damages claims brought by a class of Israeli purchasers. The Central District Court in Lod, near Tel Aviv, held that the purchasers can pursue claims against the Dutch technology company as long as they demonstrate an adequate cause of action under the country’s effects doctrine.
Philips had argued that the claims should be dismissed for lack of jurisdiction because Israeli law does not apply to foreign defendants who committed the alleged unlawful conduct abroad.
But the purchasers argued that Israel’s effects doctrine allows claimants to pursue charges against cartel defendants so long as the conduct harmed competition in the domestic market.
The district court opinion found that antitrust laws can extend to actions that were not committed entirely, or even mainly in Israel, if the result of a conduct harmed businesses in Israel. The country has no binding case law that states otherwise, the court noted.
Making similar findings for both the ODD and CRT cases, the court held that the effects doctrine permits extraterritorial jurisdiction over restrictive arrangements, including cartels that are executed outside of Israel, regardless of whether the conduct occurred in the country.
In 2017, Israel’s Supreme Court dismissed a lawsuit against members of the liquid-crystal display cartel, finding that foreign defendants can only be served with a complaint outside Israel if the conduct took place within the country. The LCD cartel was clearly a case of damages caused by an act that did not physically take place in Israel, the court said, and showing that the conduct had affected the local market is not enough for jurisdiction.
The Lod district court last week distinguished the Supreme Court ruling from the ODD and CRT cases based on the 2017 opinion’s focus on the procedural regulation for service of a lawsuit.
Optical disk drive makers face a slew of antitrust lawsuits after being accused of participating in a global cartel that allegedly fixed prices and divided the market for the drives, which are widely used in computers and other media players to read CDs and DVDs. Cathode ray tube manufacturers have also been sued in multiple jurisdictions for allegedly price fixing colour picture tubes used in television screens.
A class of Israeli purchasers sued multiple electronic companies, including Philips and Sony, in May 2016 for artificially raising the prices of optical disk drives. Another class sued Philips and LG Electronics in November 2014 for artificially raising the prices of cathode ray tubes.
Ori BarAm, an advocate at Ori BarAm Law Firm, represents the class action plaintiffs in both the CRT and ODD cases, as well as having represented the LCD claimants. He said the Lod district court’s ruling allows both lawsuits to move forward to trial, while acknowledging the local court’s authority over international cartels that harm Israeli consumers.
Philips did not respond to a request for comment.
Counsel to CRT claimants
Ori BarAm, Jacob Sabu, Yuki Shemesh and Amit Manor in Tel-Aviv
Counsel to ODD claimants
Ori BarAm, Yuki Shemesh and Amit Manor in Tel-Aviv
Counsel to Philips
Herzog Fox Neeman
Partners Joseph Ashkenazi and Haim Machluf in Tel-Aviv
