After Facebook's unit in Israel bought two companies in the country without informing the local government, the social network could be fined amounts reaching 6 million New Israeli Shekels (around R$9,4 million).

The Israel Competition Authority (ICA) reported today (11/05) that its CEO, Michal Halperin, is considering imposing monetary sanctions on Facebook for violating the Economic Competition Act (ECA) No. 5748/1988. The punishment would be given due to the purchase of the companies RedKix, Inc., which occurred in 2018, and Service Friend Ltd., carried out in 2019, through transactions that did not have Halperin's consent.

Facebook is considered a monopolist in Israel

According to the ICA’s investigation, the social network was required to report transactions requiring the CEO’s consent, since Facebook (along with its sister company Instagram) is considered a “monopolist” with a market share in Israel of over 50%. Under the ECL, a company holding 50% or more in any relevant market, whether declared or not, must obtain the CEO’s consent before consummating any transaction that constitutes a business combination.

Since Facebook did not inform Halperin about the acquisition of the companies, a hearing letter was sent to Mark Zuckerberg's social network. Now, the Facebook has the right to present to the Director-General of the Israeli authority its arguments against the fine within 60 days.

Facebook’s Israeli unit denied any wrongdoing and said in a statement that it was cooperating fully with the investigation by the country’s Competition Authority. In the statement, the unit said it would respond “to the authority’s preliminary allegations to demonstrate that they are without merit or foundation.” The statement also said there was “no reporting obligation in relation to these transactions.”

Through which channels you reach those people, classic and out of the box. Reuters

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