The Israel Competition Authority Publishes Stringent New Draft Merger Guidelines for Public Comments

A Material Tightening of Israeli Merger Control, with Distinct Echoes of the U.S. 2023 Guidelines

On April 26, 2026, the Israel Competition Authority (the “Authority”) released for public comments a draft of comprehensive new guidelines on the substantive review of mergers (the “Draft Guidelines”). The Draft Guidelines are intended to replace Opinion 1/11, and they substantially broaden the analytical scope of Israeli merger review. Click here to access the Authority’s official publication of the Draft Guidelines [Hebrew].

The Draft Guidelines articulate a notably more aggressive merger review posture. They address, for the first time, non-horizontal transactions (both vertical and conglomerate), introduce a structural presumption of harm based on post-transaction concentration index (HHI) for horizontal mergers, and incorporate analytical frameworks for multi-sided platforms, data as a competitive input, buyer power and monopsony, partial acquisitions, serial roll-ups, and potential and nascent competition. The public consultation period closes on June 14, 2026.

Key Developments and Practical Implications

1. The New Structural Presumption: Lower Thresholds, Burden Shifting

Under the prior framework, an HHI of 2,000 with a delta of 150 was treated as a soft benchmark; under the Draft Guidelines, a post-merger HHI above 1,800 (or a 30% market share) coupled with a delta exceeding 100 will operate, in the ICA’s view, as a rebuttable presumption that the transaction is likely to substantially lessen competition. Once the presumption is engaged, the burden moves to the merging parties to demonstrate that the transaction is unlikely to harm competition. For practitioners, this can have a significant effect on timetable, and pre-signing competition workstreams.

A point of perspective. The ICA seems to have chosen to converge these values with the merger guidelines from the US DoJ and FTC, as well as the Canadian Competition Act. While the convergence with the US and Canadian framework is interesting, Israel is a comparatively small economy in which efficient scale is often achieved at concentration levels that might raise concerns in larger jurisdictions. As suggested in the Draft Guidelines, the presumption does not appear to have been tailored to the needs of the Israeli economy.

2. First-Time Treatment of Non-Horizontal Mergers

For the first time, the Draft Guidelines address the general review framework for vertical and conglomerate transactions. The Authority articulates familiar theories of harm, including input foreclosure, customer foreclosure, the leveraging of market power across adjacent markets.

In this context, the ICA also raises the misuse of competitively sensitive information acquired through the transaction as a potential theory of harm. The ICA mentions not only the possibility that access to competitively sensitive information will reduce competitive incentives, but also the derivative possibility that competitors will refrain from engaging with the merged company out of concern of exposing their sensitive information.

From a practitioner’s point of view, conglomerate theories, in particular, will warrant careful pre-filing diagnosis, given that the Authority signals a willingness to scrutinize transactions that previously would have been considered competitively neutral. Absurdly, the abundance of potential theories of harm also makes the ICA harder to predict.

3. Digital Markets: Platforms, Data, and Nascent Competition

The Draft Guidelines address several issues that pertain to digital markets: multi-sided platforms, direct and indirect network effects, tipping dynamics, and the role of data as a competitive input. Data is treated as a potentially decisive strategic input that may itself be a source of durable competitive advantage.

The Draft Guidelines also incorporate a potential-competition framework relevant to acquisitions of nascent or emerging competitors.

The Draft Guidelines also address ecosystems, noting that the ICA may analyze them as multi-sided platforms, markets for a bundle of products, aftermarkets or cluster markets (markets where not all the products are substitutes).

These provisions will be of particular interest in transactions involving Israeli technology targets, where minority investments and tuck-in acquisitions are routine. From a practitioner’s point of view, transactions involving platforms, large data assets, or infrastructure that may serve as gatekeeping inputs should anticipate a more searching review, including consideration of whether the transaction forecloses rivals’ access to data or accelerates a tipping dynamic that would entrench the merged firm.

4. Buyer Power, Partial Ownership, and Serial Acquisitions

Further additions merit attention include:

▸ Monopsony and Buyer Power: the Draft Guidelines treat monopsony and bargaining-market dynamics as standalone theories of harm, referring to both monopsony power and the enhancement of bargaining power in mergers between purchasers.

▸ Partial acquisitions: the analysis of partial acquisitions distinguishes between purely financial interests and the conferral of corporate control, recognising that each may impair competition through different mechanisms, including reduction of competitive incentives, common partial ownership (one partial owner holding two competitors) and cross ownership (among competitors).

▸ Serial-acquisition strategies (so-called roll-ups) are now expressly addressed: the Authority will consider an acquirer’s historical pattern of acquisitions, including in adjacent markets, when assessing the present transaction.

A point of perspective. Merger guidelines are typically intended to update and inform the public about an authority’s approach to merger control. However, the Draft Guidelines rely on vague terms and indeterminate quantifiers that are open to multiple interpretations. For example, the definition of a “maverick” could capture virtually any firm other than the market leader; for coordinated effects, the Draft Guidelines list more than ten factors, any subset of which may be treated as sufficient to establish a risk of coordination. A “nascent competitor” is defined as one that “may grow significantly” — without a probability threshold or time horizon, and the concept of a price increase “may include” a failure to reduce price, without specifying the relevant counterfactual. In these respects, the Draft Guidelines risk leaving merger parties more uncertain, rather than better informed.

What This Means for Cross-Border Transactions

▸  Earlier and deeper antitrust workstreams. Buyers should expect diligence and competition modeling to begin earlier, with HHI and share scenarios developed pre-signing and before notification.

▸  Heightened evidentiary preparation. Where the structural presumption is engaged, parties should be ready to advance robust efficiencies, entry, and counterfactual evidence, ideally backed by economic analysis.

▸  Vertical and conglomerate diagnostics. Transactions previously assumed to be competitively neutral may now warrant a substantive Israeli filing strategy, including consideration of behavioral or structural commitments.

▸  Roll-up and tuck-in strategies. Acquirers pursuing programmatic M&A should anticipate a cumulative review lens, potentially extending to acquisitions in adjacent markets.

▸  Deal documents. Antitrust conditions, long-stop dates, regulatory cooperation covenants, and risk-allocation provisions warrant recalibration to reflect a more uncertain Israeli clearance environment.

Conclusion

While the Draft Guidelines represent a significant recalibration of Israeli merger review, they largely formalize theories of harm that the ICA has previously sought to advance in specific transactions. To that extent, they may increase predictability by enabling parties to identify relevant theories earlier and prepare their defense accordingly. At the same time, the Draft Guidelines often rely on vague terminology or leave key concepts undefined, such that the practical content of certain theories—and how the ICA intends to apply them—remains uncertain.

Until the public consultation closes on June 14, 2026, parties contemplating transactions with an Israeli nexus, whether through assets, revenues, or controlling interests, are well advised to begin their competition analysis early, to address the full spectrum of theories now contemplated by the Authority, and to revisit deal documents in light of an evolving Israeli clearance landscape.

We are at your disposal to discuss the Draft Guidelines, to assist in preparing comments to the Authority before June 14, 2026, and to advise on their impact on contemplated or pending merger and acquisition transactions.