The OFC Rules apply to all investigations conducted by the OFC on cartelization, monopolies, and combinations in restraint of trade. It is likewise applicable to international trade, industry or commerce or acts done outside the Philippines if the same can reasonably have a direct impact on trade, industry and commerce in the Philippines.Hence In administrative proceedings, violators are fined PHP50 million for the first offence and up to PHP200 million for the third offence. The gross revenues shall be the amount stated on the last regularly prepared annual statement of income and expense of that entity. To illustrate how this works: first, the acquiring entity must possess assets in the Philippines with an aggregate value exceeding One Billion Pesos (Php1,000,000,000.00). To this end, the OFC is empowered to make use of investigative measures such as “requests for information”. 10911: ELIMINATING AGE DISCRIMINATION IN EMPLOYMENT, Financial and Digital Transaction Technology, Infrastructure Projects & BOT Arrangements, Antitrust Laws: A Glance at the Philippine Competition Act, Prohibition on: (1) anti-competitive agreements, (2) abuse of dominant position, and (3) anti-competitive mergers and acquisitions, The creation of the Philippine Competition Commission, the regulatory body tasked with the enforcement of the PCA, Development of a system of fines and penalties for violations of the provisions of the PCA. The House Bill also provides for the creation of a Philippine Competition Commission (PCC) with broad powers to enforce the provisions of the enacted antitrust law. 10667).The PCC aims to promote and maintain market competition within the Philippines by regulating anti-competition behavior. When a person starts a business that directly competes with another, not for the sake of profit for himself and regardless of loss, but for the sole purpose of driving his competitor out of business so that at a later date he can take advantage of the effects of his malevolent purpose, the person may be guilty of unfair competition under the Civil Code. COMMON MARKET, supra note 19 at 64-65. Posted by Jack Advincula | Oct 04, 2016 | 0 Comments, Antitrust laws, also referred to as “competition laws”, are statutes developed to protect consumers from predatory business practices by ensuring that fair competition exists in an open-market economy. The Philippines also has various industry-specific laws, such as the following, which restrict and prohibit certain arrangements that are considered to be anti-competitive: Compliance with Article 186 of the Revised Penal Code may be enforced by administrative action before the DTI, upon the initiative of a private party or by the DTI. Antitrust/ Competition Law: Investigation of Administrative Cases involving Anti-Competitive Conduct before the Philippine Competition Commission*. The proliferation of competition law regimes among developing countries has exponentially grown in the past three decades. [4] Inquiries, investigations and cases may be undertaken by the PCA on its own, upon the complaint of an interested party or referral of a concerned government agency. Additionally, The PCC may also issue advisory opinions and guidelines on matters involving competition. Such measures allow the OFC to procure additional information from the respondent, complainant, and other relevant parties for the purposes of the initial assessment. entering into mergers or acquisition agreements that will prevent or substantially lessen competition in the relevant market or in the market for substantially related goods or services. Antitrust law sometimes doesn’t get the attention that it deserves. With the key objective of regulating and prohibiting monopolies and combinations in restraint of trade or unfair competition to improve the overall welfare of consumers by giving them more choices at possibly lower prices, the key features of the PCA include: The provisions of the PCA are applicable to any individual or entity engaged in trade, industry and commerce in the Philippines. Second, the value of the proposed merger or acquisition must also exceed One Billion Pesos (Php1,000,000,000.00). [3] Hence, the acts punishable under the PCA may be committed by both domestic and foreign entities. 5286) consolidating 12 antitrust bills in the 16th Congress of the House (the House Bill). As part of the AEC Blueprint, each of the AMSs endeavoured to introduce a national competition policy and law by 2015. Blog. Agreements that are per se prohibited are those which restrict competition as to price, components of price or other terms of trade. Be the first and Add your Comment below. Although the antitrust policies of our various lines of business are designed to comply with the highest global standards, we also need to be mindful of local regulations and practices. the issuance of a cease-and-desist order; the acceptance of a voluntary assurance of compliance or discontinuance under such terms and conditions as may be imposed; the condemnation or seizure of products which are the subject of the offense; the seizure and forfeiture of the paraphernalia and all properties, real or personal, which have been used in the commission of the offense; the imposition of administrative fines in such amount as deemed reasonable by the Chief Hearing Officer/Adjudication Officer; the cancellation of any permit, license, authority, or registration which may have been granted by the DTI, or the suspension of the validity thereof for such period of time as the DTI may deem reasonable; the withholding of any permit, license, authority, or registration which is being secured by the violator from the DTI; investigate any violations of the Senate Bill; stop or redress anti-competitive acts or behaviors by applying remedies, such as but not limited to, imposition of temporary price controls, issuance of injunctions, requirement of divestment, and disgorgement of excess profits; inspect business premises and other premises where books, tax records, or other documents relevant to the investigation are suspected to be kept, in order to prevent their removal, concealment, tampering with, or destruction; and. 10667) was signed into law by President Benigno S. Aquino III on July 21, 2015 and established the quasi-judicial Philippine Competition Commissionto enforce the act. Its counterpart bill in the House of Representatives (House) is currently pending second reading. The essence of the matter appears to be a private wrong perpetrated by unconscionable means. The said assets do not include shared assets among the corporation, non- corporate entity and entities controlled by the corporation or non-corporate entity; or, generates gross revenues from sales in, into or from the Philippines exceeds One Billion Pesos (Php1,000,000,000.00). 10667, otherwise known as the Philippine Competition Act (“PCA”)[2]is the first consolidated framework regulating competition in the Philippines. The broad concept of unfair competition under the Civil Code may cover cases of discovery of trade secrets of a competitor, bribery of his employees, misrepresentations of all kinds, interference with the fulfillment of a competitor’s contract or any malicious interference with the latter’s business, which cause damage or injury to another person. 10667, otherwise known as the Philippine Competition Act of 2015. Although competition law is not new in the Philippine legal system, it was only in 2015 that Philippines eventually passed into law a national competition law regime, which appears to be a marriage of EU and US regimes. In the past decade, a significant number of Asia-Pacific jurisdictions have begun to adopt and enforce competition law. In determining whether a certain entity has a dominant position, the following factors shall be considered: If the market share of an entity in the relevant market is at least fifty (50%), it shall be presumed that the entity concerned has a dominant position. The Philippine Competition Commission (PCC) has issued rules setting out its timelines for handling merger filings. The Senate Bill also provides that any person who suffers direct injury by reason of any violation of the Senate Bill may institute a separate and independent civil action against the entity that engaged in anti-competitive practices or otherwise abused its dominant position. The following serve as guidelines in determining whether the value of the transaction exceeds One Billion Pesos (Php1,000,000,000.00). it must involve an injury to a competitor or trade rival; and. Article II, Section 20 provides that “[t]he State recognizes the indispensable role of the private sector, encourages private enterprise and provides incentives to needed investments”. Philippine laws are generally effective only within the limits of Philippine territory; however, an agreement that is entered into in a foreign country may be subject to Philippine antitrust laws if its provisions and arrangements are implemented in the Philippines. The OFC Rules empower the Secretary of Justice to accept, reject, or modify the recommendations in the investigation report produced by the OFC. Gregg Badichek*. The PCA is enforceable against any person or entity engaged in any trade, industry and commerce in the Philippines. Limiting production, markets or technical development to the prejudice of consumers. Price Act, which governs the sale of basic necessities and prime commodities, and penalizes acts of hoarding, profiteering, and cartels. Thus, as a rule, it would appear that only mergers and consolidations of domestic corporations are intended to be regulated at this time. To assist in the conduct of its assessment, the OFC may request for additional information or documents from the concerned corporations, through the SEC, within the same 30-day period. Additional administrative penalties include failure to comply with an order of the PCC and intentional or negligent supplying of incorrect or misleading information. 10667, otherwise known as the Philippine Competition Act of 2015. In the US, the Anti Trust Division of the Department of Justice ( www.doj.gov) enforces the following statutes: it must involve acts which are characterized as “contrary to good conscience” or otherwise unlawful. investigate all cases involving violations of competition laws and prosecute violators to prevent, restrain and punish monopolization, cartels and combinations in restraint of trade; enforce competition policies and laws to protect consumers from abusive, fraudulent, or harmful corrupt business practices; supervise competition in markets by ensuring that prohibitions and requirements of competition laws are adhered to, and to this end, call on other government agencies and/or entities for submission of reports and provision for assistance; monitor and implement measures to promote transparency and accountability in markets; prepare, publish and disseminate studies and reports on competition to inform and guide the industry and consumers; and. Electric Power Industry Reform Act, which regulates competition in the power industry, and prohibits participants in the electricity industry from engaging in any anti-competitive behavior including, but not limited to, cross-subsidization, price or market manipulation, and imposes limits on ownership and control by related companies, of installed generating capacity. Similar to the Senate Bill, if the violation involves the trade or movement of basic necessities or prime commodities, the administrative or criminal fine imposed shall automatically be tripled. What is an antitrust law? Any property possessed under any contract or by any combination in violation of the Revised Penal Code, being the subject of the said contract, shall be forfeited in favor of the government. The share of the entity in the relevant market and whether it is able to fix prices unilaterally or to restrict supply in the relevant market; The existence of barriers to entry and the elements which could alter those barriers and the supply from competitors; The existence and power of its competitors; The possibility of access by its competitors or other entities to its sources of inputs; The power of its customers to switch to other goods or services; or. If the OFC report states otherwise, the SEC may either: As of date, the DOJ is in the process of drafting the guidelines in assessing whether a proposed merger or consolidation will violate existing laws on competition, monopolies, or combinations in restraint of trade (Guidelines). Philippine Competition Law (R.A. 10667) The Philippine Competition Act (PCA) or R.A. 10667 is the primary competition policy of the Philippines for promoting and protecting competitive market. Day: Potentially. Competition & Antitrust Law. The MOA took effect on 7 August 2014. [wpdm_package id=’4258′], © Copyright 2021 – Global Compliance News, Antitrust and Competition Around the World. The Philippine Congress has passed, and President Benigno Aquino III is expected to sign into law, the Philippine Competition Act. In criminal proceedings, violators may be punished by imprisonment or fine or both. If the violation is committed by a corporation or association, its president and each one of its agents or representatives in the Philippines (if a foreign corporation or association) who knowingly permitted or failed to prevent the commission of such violation will be held liable for the offense. The House Bill also prohibits specific unfair methods of competition and unfair or deceptive trade or business practices. any individual or entity engaged in trade, industry and commerce in the Philippines. MANILA, Philippines — The Philippines is gaining headway in the region in monitoring mergers and enforcing antitrust laws, a new report said. There are no indications as of date that the MOA will be extended to transactions that do not currently require SEC approval (e.g., share acquisitions or asset acquisitions that will not involve applications requiring SEC approval). This is similar to the second scenario wherein an acquiring entity has assets in the Philippines with an aggregate value exceeding One Billion Pesos (Php1,000,000,000.00). Under the Oil Deregulation Act, any person found guilty of predatory pricing, including but not limited to the Chief Operating Officer, Chief Executive Officer or Chief Finance Officer of a partnership, corporation or any entity involved will be punishable with three to seven years of imprisonment, and a fine ranging from PHP1 million to PHP2 million. the manufacturer, producer, processor or importer of any merchandise or object of commerce combining or agreeing with any person to make transactions prejudicial to lawful commerce or to increase the market price of merchandise or object of commerce manufactured, produced, processed, assembled or imported into the Philippines. If it finds a merger and/or acquisition to be anti-competitive, the PCC may do any of the following: (a) prohibit the implementation of the agreement contemplating such merger and/or acquisition, (b) require modifications in the terms of the agreement contemplating such merger and/or acquisition by specifying such changes; or (c) require parties thereto enter into otherwise legally enforceable agreements.[5]. The Philippine Competition Commission (“PCC”) shall have original and primary jurisdiction over the enforcement and implementation of Republic Act No. The House Bill imposes criminal penalties on entities that enter into anti-competitive agreements, which may include imprisonment from five to 10 years or a fine of up to 10 percent of the annual turnover of the infringed entity during the previous fiscal year or up to 10 percent of the value of the assets infringed, whichever is higher, or both imprisonment and a fine.
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