Israel's Monopoly Faces Class Action

An Israeli District Court will decide in the next few days whether to approve a class action against the Israeli gas monopoly. The class action was submitted by two advocates, Gillad Barnea and Yitzhak Yaari, who are demanding that the gas monopoly repays NIS2.5bn ($640mn) for every year of gas supply to electricity customers because of exorbitant pricing of natural gas.

The class action was submitted in 2014. The plaintiffs argued that the partners exploited their monopolistic position to sell gas at two or three times the fair price and in doing so have broken the anti-trust law.

Solicitors to the energy companies said that if the class action will be approved it would violate the natural gas framework, the document regulating the terms on which producers may do business.

In the last few weeks, the Attorney General has become involved in the litigation, siding with the gas monopoly and the government. It is not clear why the government's legal adviser has chosen to enter the fray just now, two years after the class action was submitted.

According to the official, "a sharp decrease in gas price as is demanded in the class action might cause a heavy damage to the development capability of the new gas reservoirs and would eliminate new competitors from entering [the Israeli gas sector) and in doing so pulling the rug from under the framework."

Ya'acov Zalel