THE PHILIPPINE COMPETITION COMMISSION

The Philippine Competition Commission is an independent quasi-judicial body created to promote and maintain market competition by regulating anti-competitive conduct.

The main role of the Philippine Competition Commission is to ensure fair competition in the market for the benefit of consumers and businesses.

WHY COMPETITION MATTERS

  • Competition leads to both economic growth and reduced poverty. It helps markets work better, fosters innovation, and protects investors and consumers. It will help to encourage wider domestic and foreign direct investments.

  • Competition provides an improved enabling environment for small and medium enterprises that are critical to more inclusive economic growth and development in the country.

  • Consumers win because free and fair competition leads to more choices, lower prices, and higher quality of goods.

KEY PROVISIONS OF THE PHILIPPINE COMPETITION ACT

  • The Creation of a Philippine Competition Commission. The Commission will be composed of 1 cabinet secretary-level Chairman, and 4 Commissioners. They will serve for 7 years, without reappointment and shall enjoy security of tenure.

  • Prohibited Anti-Competitive Agreements and Acts. The law provides for per se violations, namely:

  • Restricting competition as to price, or components thereof, or other terms of trade;

  • Fixing price at an auction or in any form of bidding including cover bidding, bid suppression, bid rotation and market allocation and other analogous practices of bid manipulation;

Other anti-competitive agreements whose “object or effect of substantially preventing, restricting or lessening competition” are also prohibited but subject to “rule of reason”. These include:

  • Setting, limiting, or controlling production, markets, technical development, or investment;

  • Dividing or sharing the market, whether by volume of sales or purchases, territory, type of goods or services, buyers or sellers or any other means.

  • Mergers and Acquisitions. Merger or acquisition agreements that substantially prevent, restrict or lessen competition are prohibited.

Parties to the merger or acquisition agreement where the value of the transaction exceeds One Billion Pesos (P1,000,000,000.00) are required to notify the Commission of such agreement, and they cannot consummate the same without the approval of the Commission. The Commission may also prescribeother criteria (e.g., increased market share in the relevant market in excess of minimum thresholds) that would trigger this notification requirement.

  • Abuse of Dominant Position. Entities (whether companies or individuals) are prohibited from abusing their dominant position by engaging in conduct that would substantially prevent, restrict or lessen competition. Such conduct includes predatory pricing, imposing barriers to entry in an anti-competitive manner, unfair exercise of monopsony power, among others.

  • Relationship with Existing Sector Regulators. The Commission will have original and primary jurisdiction over all competition-related issues. It shall also have jurisdiction over all other issues that involve both competition and noncompetition issues, but the concerned sector regulator must be consulted and afforded reasonable opportunity to submit its own opinions and recommendations before the Commission can make its decision.

  • Fines and Penalties.Administrative fines of up to P250 million pesos can be imposed. This amount is subject to adjustment every five years to maintain its real value. Criminal penalties for anti-competitive agreements are punishable by imprisonment of 2 to 7 years and a fine of P50 million pesos to P250 million pesos. In addition, the Commission is empowered to impose significant fines and penalties for contempt, failure to comply with its orders, or for supplying misleading or false information.

  • Confidentiality of Information.The law protects confidential business information submitted to the Commission. The identity of the persons who provide information to the Commission under condition of anonymity, as a rule, would likewise remain confidential.

  • Prohibition on the Issuance of Temporary Restraining Orders, Preliminary Injunctions and Preliminary Mandatory Injunctions. Only the Court of Appeals and the Supreme Court may issue a temporary restraining order, preliminary injunction or preliminary mandatory injunction against the Commission in the exercise of its duties or functions.