Commercial Agencies: Between Lack of Competition and the Rise of Monopoly

-       The definition of commercial agencies appears in Chapter One (Definitions), Article No. (1) of Law No. (2) of 2000 concerning the Regulation of the Work of Commercial Agents: it is the natural or legal person who has the right, pursuant to an agreement, to sell, distribute or promote goods and products, or to provide services in Palestine on behalf of a manufacturer or supplier in return for a commission or profit margin....!

-       Commercial agencies have benefits for the foreign manufacturer in that they facilitate his affairs and spare him the burden of promoting and distributing his products in areas where the capacity to assess and study the market and to know consumers’ needs and desires is not available, because the agent will, in most cases, be a merchant with experience and a reputation in the local market, and will provide his services for amounts far lower than if the foreign establishment did so itself.!

-       Commercial agencies give the local agent opportunities to control the local market within the scope of the goods he sells or distributes, so the merchant appears to be the sole monopolist of them.

-       Agencies provide consumers with after-sales services easily and readily, especially if the goods are, for example, cars, machines, or equipment, etc.

-       They provide the state with an opportunity to control its markets through citizen commercial agents, which spares the state problems of domination by large foreign companies and their control over them..!

-       They create job opportunities for members of society and contribute to raising the standard of living.

·       However, the risks of commercial agencies are numerous, including the following:

·       The local agent’s monopoly of the market and influence on consumers’ wishes and tastes ... so that the culture of global brands becomes entrenched in their consumer demand..!

·       Commercial agencies help the rapid spread of foreign goods and products in local markets, which negatively affects domestic industries and national products, given the foreign goods’ competition in quality and price..!

·       Commercial agencies resort to a type of market monopoly by some commercial agents: exclusive agencies are granted to a single commercial agent in a specific geographic area so that no one else may conclude commercial transactions or distribute the product there.. or even act as his sub-agents..!

·       The absence of the principle of competition, which is the essence of market movement...and which is stipulated by international trade agreements; the principle of competition may be legitimate under the laws in force in the state for the purpose of providing consumers with goods of appropriate quality and price...!

·       As for commercial agencies, they constitute a clear breach of the principle of legitimate competition, which negatively affects consumers’ rights, who are forced to deal with a single specified agent. All essential goods have exclusive agents protected from competition, which allows them to achieve exorbitant profits from these commercial agencies due to the state of monopoly and their control over prices. For example, if the currency of the country where the commercial agency is located appreciates against other major international currencies, this should be reflected in a decrease in the prices of imported goods; however, commercial agents do not lower the price so long as they are the monopolist..!

·       When most of the goods consumed in our markets are imported, monopolistic practices in the markets become dangerous in their impact on consumers.

-       Abolishing (liberalizing) commercial agencies in our context may be difficult because of the existence of the Israeli agent as an alternative in marketing and distributing the producer’s products; therefore, we must encourage individual consumers to buy the goods offered by commercial agents from external markets directly without obtaining the agent’s permission, on the basis of importation for personal use, or strengthen the role of consumer cooperative associations. In addition, it is necessary to work on changing the consumption culture of local consumers and to train and bring them to the necessity of rejecting exploitation and monopoly, or refraining from purchase, and avoiding the exaggerated refrain that the global brands of goods shown by the commercial agent in the markets must inevitably be purchased...!

-       Tighten price monitoring in the markets: it has become clear that food suppliers drive the market price index in accordance with their interests..!! Despite the concept of the necessity of nonintervention by the government in market affairs, we see a clear laxity regarding sanctions and legislation; despite inspection campaigns, high prices sweep the markets. There must be tangible pursuit and follow-up. We see in major capitalist countries how they monitor markets and issue strict laws to combat monopoly, and even monitor advertising materials in marketing and the extent to which they represent the reality of products, in addition to minimum wages... and other issues that, in reality, constitute intervention in the market and are for the benefit of society..!

-       Assign a role to electronic media to inform consumers, for example by publishing weekly price lists on the Ministry of National Economy page so that the consumer is aware of market prices.!

-       The issue of commercial agencies joins many issues, including the levels of the high public debt that the country has reached at present, which we suffer from in our daily lives; they are passed on to tighten the noose around future generations, who are our children and grandchildren, where opportunities and choices for them are reduced in how to live according to their hopes and aspirations and according to their decisions in their time. This noose of the burden of debts and the monopoly of some over foreign trade sectors is inherited by subsequent generations, which may lead to increased taxes on them to finance repayment of installments and service of the debts inherited from us, and thus we become a primary cause of the misery of future generations due to the failure of our vision in public service at the present time... despite the fact that most countries establish sovereign wealth funds and save for future generations....!

-       There are many current facts in our time that weigh on us in addition to public debt, including the imposition of a group of commercial agents whose agency contracts stretch for many subsequent decades and will bind future generations to them. Many examples represent phenomena of monopoly and lack of competition, such as the ownership or leasing of transport rights to a person or persons (franchise rights for transport lines between villages and towns) and keeping them in their custody and for their descendants for a period that may be long and succeed through generations without any change, review or replacement: there is no competition in such situations...

-       Another example of monopoly and absence of competition is the franchise granted to a related contractor to guarantee the operation of buses to and from the rest house in Jericho and to collect commissions and fees on them, and to provide services by this contractor in his manner in operating transport and vehicles to and from the rest house in Jericho exclusively for himself..and his descendants..!.. This comes under the name of monopoly, as he imposes the fees and prices he deems appropriate because he is confident that no one will complain..no one will review or contest or compete..!!

-       Another example of monopoly is the issuance of license plate numbers for public transport vehicles, where the Ministry of Transport and Communications issued numbers to persons who have no relation to the profession of transport and driving but work in other professions; these are among the monopolistic grants and favors, where most of them sell them for exorbitant profits or rent them monthly for large sums. At first the issuance was for rental numbers, then it became ownership, and their price was later set at about 90,000 shekels, or 15,000 dinars, without showing the exchange rate of the dinar or identifying who the persons are to whom such numbers were issued for purchase...!

·       All these examples that represent the phenomenon of monopoly and the absence of competition, evident before us and weighing on us, will be passed on to future generations and confiscate their rights to make their own decisions in their era.....!!

-       On 27-1-2021