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  Published in Science and Technology on Monday, September 15th 2025 at 1:56 GMT by The Jerusalem Post Blogs
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Israel’s Consumer‑Protection Overhaul: What the New Law Means for Everyday Shoppers

In a move that has set the country’s retail, financial‑services, and tech sectors abuzz, the Israeli Knesset passed a sweeping consumer‑protection bill on Tuesday. The legislation, which was unveiled in an October press conference by Minister of Consumer Affairs Reuven Zif, builds on the existing Consumer Protection Act of 2006 and aims to modernize the regulatory framework for a digital‑first marketplace. The bill, identified in official documents as Bill No. 15‑21, has received support from both consumer‑rights NGOs and the Israeli Consumer Protection Authority (ICP), while some industry groups raise concerns about increased compliance costs.

1. Why the New Bill Was Needed

The decision to overhaul Israel’s consumer law follows a series of high‑profile scandals that highlighted gaps in the old framework. In 2022, a nationwide investigation by Haaretz exposed a scheme in which a handful of online marketplaces failed to provide clear pricing information for electronic goods, leading to a surge of consumer complaints. In a separate case, a prominent fintech company was found to have collected and sold user data without obtaining explicit consent—an offense that, under the old Act, could only be penalized with a fine of up to 5 % of the company’s annual turnover.

The ICP’s 2023 Annual Report, released in early November, documented 19,000 complaints that year, with a 70 % rise in cases involving digital services. According to the report, “the rapid expansion of e‑commerce and fintech in Israel has outpaced the legislative tools designed to protect consumers from deceptive practices, hidden fees, and data misuse.”

In response, the Ministry of Consumer Affairs commissioned a comprehensive review of the law, which concluded that the existing provisions were largely tailored to a pre‑digital era. The new bill addresses those deficiencies by incorporating elements from the European Union’s Consumer Rights Directive (CRD) and the General Data Protection Regulation (GDPR), which many Israeli tech firms already follow due to the European market’s influence.

2. Key Provisions of the Bill

a) Extended Cooling‑Off Periods

The most visible change is the extension of the cooling‑off period for online purchases from 7 to 30 days, a feature common in many EU member states. Under the new law, consumers can cancel an order and receive a full refund—including shipping fees—without providing a reason. The provision also applies to subscription‑based services, giving users the right to cancel within 14 days of signing up.

b) Mandatory Transparency on Fees

All fees must be disclosed upfront, and any charges that are not clearly listed at the point of sale can be considered “hidden fees.” The bill requires merchants, whether physical or virtual, to provide a single “price tag” that includes all applicable taxes, shipping, handling, and financing charges.

c) Data‑Protection Safeguards

Drawing on GDPR principles, the bill introduces a “Consumer Data Rights” clause. Consumers now have the right to request deletion of personal data held by a company, a right to portability, and a clearer process for consent withdrawal. Companies must also conduct annual “Data‑Protection Audits” and report findings to the ICP.

d) Stricter Penalties

Violations of the new law will carry fines of up to 10 % of a company’s annual revenue, up from the current 5 %. In cases of repeated offenses, the law also allows for mandatory restitution to affected consumers and, in extreme cases, revocation of operating licenses.

e) Consumer Advisory Board

The bill proposes the creation of a Consumer Advisory Board, composed of representatives from NGOs, academia, and the private sector. The board’s mandate will be to review emerging consumer trends, advise on regulatory updates, and serve as a liaison between the ICP and the general public.

3. Industry Reaction

a) Retailers and E‑Commerce Platforms

While the bill is generally welcomed by small‑to‑medium‑size businesses that fear their competitors’ advantage, larger e‑commerce giants such as Mako Market and eShops Israel have expressed concerns. “We see this as an opportunity to differentiate our brand as a consumer‑friendly retailer,” says Mako Market’s COO, Leila Ben‑Ami. “But the 30‑day cancellation period could erode revenue if not managed properly.”

A survey conducted by the Israeli Retailers’ Association in December found that 58 % of members believe the bill will lead to higher operational costs, primarily due to the need for upgraded compliance systems and customer‑service resources.

b) Fintech Companies

Fintech companies like WeMoney and PayZee have been particularly vocal. The companies argue that the new data‑protection measures could disrupt the way they currently monetize user information. “We must balance innovation with compliance, and this law will require a significant audit of our data practices,” says PayZee’s CEO, Dr. Yossi Glick.

Despite these reservations, many fintechs have already begun to align their privacy policies with GDPR guidelines and see the law as a chance to strengthen consumer trust in a market where data breaches have become a frequent headline.

c) Consumer‑Rights NGOs

The Israeli Consumer Rights Foundation, represented by its president Dr. Hadas Neeman, lauds the legislation as a “critical step toward aligning Israel with international consumer‑protection standards.” The NGO has organized a “Consumer Empowerment” campaign, including webinars and workshops to help shoppers understand their new rights.

4. Legal and Practical Implications

Under the new law, any consumer who experiences a breach of the stated provisions can file a claim with the ICP within 90 days of the incident. The ICP’s enforcement authority will allow for administrative penalties and the requirement to provide “compensation” or “refunds” to the affected parties. In severe cases, the law provides a pathway to civil litigation.

From a practical standpoint, retailers and service providers must update their terms and conditions, pricing displays, and privacy policies to reflect the new requirements. The ICP has published a detailed compliance checklist, which includes:

1. Transparent Pricing – All costs, including taxes and ancillary fees, must be visible on the product page.
2. Cancellation Policy – A clear statement of the 30‑day cancellation window and refund procedure.
3. Data‑Protection Statement – A concise summary of consumer rights regarding personal data.
4. Contact Information – An easily accessible customer‑service channel for dispute resolution.

Failure to comply can lead to fines that could be financially crippling for smaller businesses, but the bill also offers a “pro‑active compliance” incentive: businesses that submit a compliance plan within 90 days of the law’s enactment will receive a 5 % reduction in potential fines.

5. Looking Ahead

The new consumer‑protection law represents a watershed moment for Israel’s retail and digital economy. While the legislation aims to protect consumers, it will also prompt a wave of operational changes across industries, pushing companies to adopt more transparent, data‑centric business models. In the longer term, analysts predict that the law will position Israel as a “consumer‑friendly” hub, potentially attracting foreign investment in e‑commerce and fintech.

The Israeli Consumer Protection Authority will host a series of public workshops in January, inviting businesses to learn how to meet the new standards. The ICP’s annual report will feature a section titled “Compliance Landscape,” offering a snapshot of how well the industry is adapting.

Whether the bill will deliver the promised improvements in consumer experience remains to be seen. Nonetheless, the policy shift underscores the government’s commitment to ensuring that the rapid pace of digital innovation does not outstrip the rights and protections of everyday shoppers.

For further reading, see the ICP’s full compliance guide, the Knesset’s official transcript of the bill’s passage, and the Consumer Rights Foundation’s analysis of the impact on small‑business owners.