Beyond BDS: The Silent Boycott Quietly Undermining Israeli Business Deals
Despite protests, formal boycotts of Israel haven’t increased, but a “silent” boycott is growing. Businesses avoid Israeli firms to avoid backlash, even without antisemitism. Legal options against this are limited
Despite loud and sometimes violent protests against Israel’s war in Gaza, there has been no noticeable rise in formal boycotts or divestments targeting the Jewish state. Several countries, such as Austria, Canada, France, Germany, and especially the United States, have laws restricting BDS activity, and such efforts have proven mainly ineffective.
However, experts point out a “silent” boycott has emerged since October 7.
“In some cases, it is not even intentional,” said Yoel Israel, founder and CEO of the high-tech marketing firm WadiDigital and IsraelTech.
Yoel Israel, founder and CEO of WadiDigital and IsraelTech. (Courtesy)
He provided the following scenario: Imagine you’re a procurement officer at a midsized US business looking for a cybersecurity solution. After researching, you narrow it down to five options, two Israeli. You’re neither antisemitic nor anti-Israel. You discover that one of the Israeli companies offers precisely what you need, has strong references, and a better deal. You’re ready to proceed, but then you remember—you have a Muslim employee who might raise objections or a young, progressive PR person likely to protest.
This is how the boycott works
“The buyer says, ‘I’ll go with my No. 2 option that is not Israeli, even though the Israeli company is best for me. I don’t need the headache,’” Israel told The Media Line. “This is how the boycott works.”
He explained that this is how decisions are often made within organizations. There’s no formal boycott or conspiracy involved—it’s simply one person trying to do what’s best for the business, avoiding potential headaches or backlash.
“So, they never move forward [with the Israeli company. They ‘just went with another solution,’ and the Israeli company has no idea why,” Israel said.
Economist Eskil Ullberg shared a similar experience in Sweden, where a business had its storefront vandalized for using an Israeli vendor. He said some companies have become hesitant to engage with Israel. They worry it could be a “brand risk,” fearing media or social media backlash, potential physical attacks on their premises, or overall harm to their business.
He explained that because the consequences of working with an Israeli company are “uncertain,” businesses often opt not to, even if they prefer to.
“They are not at heart antisemitic,” Ullberg told The Media Line. “There are only a few people who are openly antisemitic or vocal BDS [boycott, divestment and sanctions] supporters.”
While Israel couldn’t name specific Israeli companies facing this challenge due to confidentiality, he confidently stated that he has spoken with many American businesses that, since October 7, have stopped working with Israeli companies and, at times, even openly Jewish ones for the reasons he outlined.
A June report from the Israel Innovation Authority (IIA) revealed that job growth in the high-tech sector has slowed significantly. Key business activity indicators have also dropped to 2018 levels or earlier. In addition, investment in Israeli startups plummeted by about 55% in 2023, with later-stage funding rounds hit the hardest. According to the report, only 39% of startups seeking capital will likely secure the necessary funding successfully.
“Surveys conducted as part of the annual report among 500 tech companies revealed concerns about the future, with a prominent percentage of startups (around 40%) engaged in fundraising anticipating lower valuation rounds (Down Rounds),” the IIA wrote. “The central impact of the October 7 events on tech companies has manifested in slowed business activity, product development delays, or failure to meet company goals.”
Is it illegal for businesses to avoid working with Israeli companies out of fear of backlash? According to American Israeli legal expert Eugene Kontorovich, there’s little that can be done legally about this “silent boycott.”
While there are laws against BDS and World Trade Organization rules that member countries must follow, Kontorovich noted that these regulations apply to governments and generally don’t affect the decisions of private companies.
Ullberg pointed out that a key driver of the boycott is misinformation in the media, which shapes how people perceive and understand Israel. He suggested that one way to combat this would be to push back against discrimination, potentially collaborating with pro-trade lawmakers to pass legislation or clarifications against discrimination in trade.
He told The Media Line that a more effective solution likely would be for Israeli businesses to form strategic alliances with countries eager to trade with them.
Ullberg said that a possibility, for example, could be to make Sweden more attractive to Israeli businesses and Israel more attractive to Swedish businesses. Then, they could collaborate more, regardless of the external noise.
This could also be the case in smaller countries like Singapore and Switzerland.
To bully—to abuse the nondiscriminatory international trade system we have—is easy. Stopping a bully takes 10 times the effort.
He added, “To bully—to abuse the nondiscriminatory international trade system we have—is easy. Stopping a bully takes 10 times the effort.”
