philippine competition act jurisprudence

<>/ExtGState<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/MediaBox[ 0 0 612 792] /Contents 4 0 R/Group<>/Tabs/S/StructParents 0>> This leaves the applicability of the prohibition to vertical agreements open to interpretation/ argument. However, this threshold is not static, as the Commission has the authority to prescribe a different threshold across all or for a particular sector or market. Before the enactment of the Philippine Competition Act in 2015, the Philippines was the only founding member of Asean that did not have a comprehensive competition law in place. 543, 544, and 545 of the Spanish Penal Code, applied to the Philippines in 1887, were the first legal provisions dealing with monopolies and combinations in restraint of trade. It also creates the Philippine Competition Commission (“P ”), which will have the original and 10667 (PHILIPPINE COMPETITION ACT) To effectively carry out the provisions of Republic Act No. As clearly laid out in the Philippine Competition Act, competition will propel economic development by promoting equal opportunity, improving productivity, and safeguarding consumer welfare. Under the law, the State shall envisions to enhance economic efficiency and promote free and fair competition in trade, industry and all commercial economic activities, establish a National Competition Policy to be implemented by the Government of the Republic of the Philippines and all of its political agencies as a whole, prevent economic concentration which will control the … "7q`��&�xRF�I��׽�lĉ�*/. A spate of national competition laws emerged in the 1990s, as trade meshed with competition policy. It aims to promote and protect market competition in the country. While other jurisdictions employ concentration indices to determine whether there is, at the outset, indicia of anti-competitive behavior in a transaction, the Philippine Competition Act is silent on these metrics, and the rules and regulations providing clearer and quantifiable guidelines on prohibited horizontal or vertical mergers and acquisitions have yet to take shape. into law of the Philippine Competition Act (Republic Act 10667 signed into law on July 21, 2015) is a breakthrough legislation, especially in view of the developments in technology, and in global business and trade that have created new business models and intensified international production the philippine competition act republic act no. Interface with the Commission may occur at several levels, and early engagement is advantageous, where possible. Introduction. stream REPUBLIC ACT NO. hr��H��a�# ��D�x�d�Lcjh|Oj��-w��0��p��7E�o��1"IɃ-_.��b��*�Ɨ�=��m�� Ed�� q�~_�#U�f 5| 10667 congress of the philippines sixteenth congress second regular session an act providing for a national competition policy prohibiting anti-competitive agreements, abuse of dominant position and anti-competitive mergers and acquisitions, establishing the philippine competition The Philippine Competition Commission (PCC) has issued a decision on its first case on abuse of dominance. Short Title. The Philippine Competition Act (PCA) or R.A. 10667 is the primary competition policy of the Philippines for promoting and protecting competitive market. Jurisprudence; Republic Acts > REPUBLIC ACT NOS. If the Commission does not act on the transaction within a period of 30 days from notification, the transaction may proceed. It is noted that the text of the law limits the definition of prohibited agreements to those entered between or among competitors. The PCA prohibits anti-competitive agreements; abuse of a dominant position; and anti-competitive mergers and acquisitions. The Philippine Competition Act finally gives the country its own law guiding competition, an area where the country has lagged behind most of … It became evident that trade liberalization could The draft implementing rules and regulations propose to expand the criteria for transactions requiring prior notification to include total revenues of the target and the level of ownership in the company to be acquired. 10667 to help in the investigation and prosecution of competition law offenses.The Rule shall take effect on November 16, 2019.. 3247 “An Act to Prohibit Monopolies and Combinations in Restraint of Trade” was enacted by the Philippine Legislature, adopting the … 10601 - 10700 > RULES AND REGULATIONS TO IMPLEMENT THE PROVISIONS OF REPUBLIC ACT NO. Salient features of Republic Act No. The law leaves it up to the Philippine Competition Commission (“Commission”) through its decisions or regulations or to the courts to interpret the concept of “fair share of resulting benefits”, such as, for instance, whether benefits must necessarily be quantifiable (e.g. Further extending specific safe harbor clauses, there is a general provision in the law that mandates the Commission, in determining whether an anti-competitive agreement or conduct has been committed, to evaluate whether actual or potential efficiency gains outweigh adverse impact on competition. 10667 ... To effectively carry out the provisions of Republic Act No. A. It protects the well-being of consumers and preserves the efficiency of competition in the marketplace. 1 0 obj Prior to the passage of the Philippine Competition Act, regulation of monopolistic or anti-competitive acts was not centralized. As with anti-competitive agreements, the safe harbor clause may be invoked as a defense. With the recent passage of the Philippine Competition Act, a more level playing field for business can be expected from a more comprehensive, centralized, and consistent approach against anti-competitive behavior. Whether or not the safe harbor clauses under the law will leave a wide or narrow gap for defense of an otherwise anti-competitive agreement will depend on the rigor with which regulatory authority will evaluate economic data or statistics presented as evidence. The present article provides a detailed examination of the Philippine competition law regime. REPUBLIC ACT NO. Without further guidelines, the evaluation of transactions against this standard would appear to be quite subjective. Prohibited acts. A binding ruling effective for a specified period may also be requested from the Commission, in case a clarification on the interpretation of the provisions of the law is necessary. commonly known as the Philippine Competition Act (“PCA”), was signed into law on July 21, 2015. <>>> 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 * A national competition policy that seeks to promote free and fair competition in trade, industry and all commercial economic activities. Per se prohibitions consist of restricting competition as to price, component … 10667, or the Philippine Competition Act (Act), the Philippine Competition Commission, pursuant to the powers vested in it under said Act, hereby issues, adopts and promulgates the following rules and regulations. This provision has since been repealed by RA No. An entity that controls, is controlled by, or is … For clearer guidance, the law also assigns a 50% market share as the default threshold for presumed market dominance. 2. Unlike the first group of anti-competitive agreements discussed above, this second group of prohibited anti-competitive agreements could potentially enjoy the benefit of safe harbor clauses embedded under the law. The Republic Act 10667 enacted by former President Benigno S.S. Aquino III in July 2015 became effective in August 2015 and is now known as the Philippine Competition Law. The requirement to notify the Commission is in addition to any approvals already imposed by laws or regulations that must be obtained from the relevant regulatory authority (such as the central monetary authority for transactions involving banks). Provisions governing competition began with Arts. endobj The first category of prohibitions are anti-competitive agreements, which are further classified into 2, those that are prohibited per se and those that are prohibited if shown to have an adverse impact on competition. Following the promulgation of the Philippine Competition Act (PCA) on 21 July 2015, the Philippines joins the ranks of more than 120 market economies that have established a system of competition law. Under the law, agreements that promote technical or economic progress or improve production or distribution of goods are not prohibited if the consumers enjoy a fair share of resulting benefits. However, the 30-day period may be extended for a period not exceeding 60 days by a request for additional information by the Commission. Compliance with the notification requirement is crucial to these transactions because the consequences of failing to notify are serious. In case a merger or acquisition is found to substantially prevent, restrict or lessen competition, the safe harbor provisions of the law may come into play and the transaction parties may invoke the same cost-benefit analysis available to the 2 other categories of prohibited acts/agreements. %�� 4 0 obj �3�ě�&��gE�)2�ē��x��$|'��X�8�q��q�m�J0w�iYn�[�#��- .�5$��!)Ƈ�ID+0e|��$�U]S��xs��e��4��A. Per se prohibited agreements are agreements between or among competitors that restrict competition as to price or other terms of trade, or that fix the price and terms of engagement at an auction or bidding. The legal definition appears to be clear under the law – it refers to a relevant product in a relevant geographic market. In an En Banc resolution in A.M. No. MANILA, Philippines — The Philippine Competition Commission (PCC) has raised penalties by 10 percent for violations of the competition law. In the past two decades, Congress tackled several competition bills but lawmakers failed to find common ground on key provisions, hampering their passage into law. If after evaluation, the Commission concludes that the transaction is anathema to competition, the Commission is empowered to take measures necessary to ensure compliance with the law, such as outright prohibition of the transaction or the recommendation and imposition of modifications to the transaction. The legislature acknowledges that through industry or skill, a company may gain dominance within its market. Finally, the power of the Commission to extend limited exemption to entities may be invoked. 2 0 obj The Philippine Competition Act (PCA) or Republic Act No. Upon finding that a company has entered into anti-competitive agreements or has abused its dominant position, the Commission may prohibit a transaction, require divestment and disgorgement of excess profits, and impose administrative fines. On the other hand, under the law, certain arrangements are prohibited only if they have the effect of substantially preventing, restricting or lessening competition, such as arrangements that control production, technological development, or investments, and those that divide the market whether by volume of sales, purchases or territory. In 1925 Act No. ŕ|iš-��k,Fd��.I��ԫ�Qɜ�2Nݪ��p�6u��Es�uhCs��],��?��b��P~�mW\%?�rTh�1>��>��J$^�-��>�Z�y�b�g2��y��,�Z,a�ye�a�s�ڲ�A�xI4e��NR(��$�&��je��噑�eh 5#�B^2��:mq@� ��xC�v�;�[W4(u��^��;��Y��O�s� �Z$�� E��]A�T0�R�w��;}�ɵ�i�u��KI��k��"�� >��aK"��2>�&T��iaK�B?�f��0��,Z�_�Ti]�*�!0�ו��l� �p��p}��ZkM:B��Z� �t� �\��:��\^PP��VI>��q�{��7��5=t�0�}\�'>qX��dJ ��{T!0��9Q�b��X��`0��`d]6��5�l �j;C� The last category of prohibitions is that of mergers and acquisitions that prevent, restrict and lessen competition. REGISTER NOW. A key feature of the law is its extraterritorial reach. Under the law, the sole standard against which a merger or acquisition will be evaluated is whether or not the transaction prevents, restricts or lessens competition. <> With the recent passage of the Philippine Competition Act, a more level playing field for business can be expected from a more comprehensive, centralized, and consistent approach against anti-competitive behavior. 10667 (RA 10667) or the Philippine Competition Act of 2015 (PCA) is a breakthrough legislation in the Philippines as it is the only law primarily focused on competition policies which are matters that are hardly discussed in any jurisprudence. The following factors are further considered in determining whether an entity has a dominant position in a relevant market: market share and the corresponding ability to fix prices, the existence of barriers to entry into the market, tax regimes, and government regulations, as well as the potential for these barriers to be altered. Its basic purpose is to stop entities from crushing competition or monopolizing a specific market, because these situations eventually cause small businesses to close, drive an increase in prices, and leave consumers … All Rights Reserved. The Philippines is one of few developing countries that do not have a valid competition policy. endobj <> The law defines “dominant position” as a position of economic strength such that an entity can control the relevant market independent from other competitors, customers, suppliers, or consumers. Apart from administrative fines and penalties, certain violations of the law are deemed criminal and are punishable by imprisonment of 2 to 7 years and imposition of substantial fines. In addition to the imposition of fines amounting to 1% to 5% of the transaction value, the transaction may be declared void and without effect. Apart from a prospective review, compliance will also require a review of existing agreements vulnerable to antitrust challenge. Engagement prior to adversarial proceedings is allowed by the law and proposed regulations. A competition law … “is the government regulation of business with the goal of preventing and prohibiting anti- competitive behaviour and unfair business practices.It involves the regulation of the continuous struggle of companies for superiority by attempting to maintain fair competition so that all people and companies can benefit from competitive prices, product ��`��z&98��A��;��z,{T�� f%��4W��m̃�Ϻg�� a. To allow the Commission adequate opportunity to assess whether a transaction is prohibited, the law requires parties to a transaction to notify the Commission where the value of the merger or acquisition transaction exceeds Php1,000,000.00. 10667, or the Philippine Competition Act: — Levels the business playing field for all companies operating in … The PCA was passed in 2015 after languishing in Congress for 24 years. 10667 is the primary competition law of the Philippines. A relevant product is a group of substitutable goods or services, while relevant geographic market is the area in which conditions of competition are homogenous. Copyright V&A Law 2016. This evaluation will require familiarity with the state of Philippine markets and how regulators are likely to define the relevant market and quantify and interpret changes in the levels of industry concentration. Establishing market dominance is only the first step in the analysis of the second category of prohibitions. Section 1. The Supreme Court has approved the Rule on Administrative Search and Inspection under the Philippine Competition Act (PCA) or Republic Act No. Compliance with the newly-enacted Philippine Competition Law will require counsel to review existing competition compliance programs to ensure that pricing, supply, purchase and other cooperation agreements will not breach Philippine regulations. An adverse ruling may be the basis for the parties to rectify transactions or arrangements. The Republic Act 10667 or the Philippine Competition Act (PCA). [40] RA … This was labeled as a game changer to Philippine political economy.Asian Legal Business, committed to upholding timely and professional discourse of pressing regulatory updates, is … The PCA, through its salient provisions, seeks to penalize all forms of anti-competitive agreements with the objective of protecting consumer welfare and advancing economic development. A clear understanding and application of the concept of relevant market is crucial in ensuring that an agreement is not prohibited under the law. “The Fair Competition Act is both pro-poor and pro-business.” DOWNLOAD RA 10667 The Commission is charged with the original and primary jurisdiction to enforce the Philippine Competition Law. The Philippine Competition Commission (Commission). The transaction may also be justified if the party to the agreement is faced with imminent financial failure and the merger or acquisition is the least anti-competitive arrangement involving the company’s assets. lower prices) or may be qualitative (e.g. Thus, acts done outside the Philippines are covered by the law if these have direct, substantial and reasonably foreseeable effects in trade, industry or commerce in the Philippines. The Philippines recently enacted Republic Act 10667 or the Philippine Competition Act (Act), which defines, prohibits and penalises anti-competitive agreements, abuse of dominant position, and anti-competitive mergers and acquisitions. 10667 * Philippine Competition Act * Established to look into anti-competitive agreements and abuses of dominant position as well as review mergers and acquisitions. 10667, or the Philippine Competition Act, which defines and penalizes "all forms of anti-competitive agreements, abuse of dominant position, and anti-competitive mergers and acquisitions." Among such acts are predatory pricing, erecting barriers to entry, subjecting transactions to unreasonable conditions, product tie-ups and limiting production, markets, or technical development to the prejudice of consumers. To achieve this, the Philippine Competition Act regulates or prohibits anti-competitive agreements, abuse of dominant position, and mergers and acquisitions that prevent or restrict competition. more product choices, higher quality products) and whether it is necessary that all consumers enjoy the “benefit”. Its power to investigate comes with the power to issue subpoena or to require the production of books, records or other documents. Prohibited Acts. any individual or entity engaged in trade, industry and commerce in the Philippines. It will protect the well-being of consumers and preserve the efficiency of competition in the marketplace. A transitional clause provides a cure period of 2 years from effectivity of the law for parties to renegotiate or restructure their businesses. The Commission may also consider other facts, including the existence and power of the main competitors, their access to the input source or raw materials, the ability of customers to freely switch to other goods or services, as well as the recent conduct and behavior of the entity in question. i��?��lJ��Q�(R5�$]�l��O�Ks(Zt&��GC� However, in cases where a market is comprised of differentiated or specialized products, a consistent application of the legal definition to the facts may prove to be a challenge and prone to dispute. The Philippine Competition Act (Republic Act 10667 or the “Act”) defines, prohibits and penalizes three types of anti-competitive conduct: anti-competitive agreements, abuse of dominant position, and anti-competitive mergers and acquisitions. Notification allows the Commission to determine whether or not the transaction comes within the purview of the prohibited mergers and acquisitions. 19-08-06-SC promulgated on September 10, 2019, the Rule … Philippine Daily Inquirer / 12:10 AM September 08, 2016 In a merger or acquisition (M&A) where a company purchases either the assets or shares of stock of a competing company, the buyer usually insists the inclusion of a non-compete clause that prohibits the seller from engaging in any business that competes with the buyer. The Philippine Competition Act establishes antitrust laws in the country to protect consumers from monopolies, inflated prices, and other predatory practices. 10667 - an act providing for a national competition policy prohibiting anti-competitive agreements, abuse of dominant position and anti-competitive mergers and acquisitions, establishing the philippine competition commission and appropriating funds therefor : philippine laws, statutes & codes - on-line ��~��m��b�)�ǚ��ߊ I. Prior to the passage of the Philippine Competition Act, regulation of monopolistic or anti-competitive acts was not centralized. Thus, the law specifies the acts or agreements which, if committed by a dominant enterprise, are potentially illegal. GENERAL PROVISIONS. As such, it has a broad range of powers, which include the power to conduct inquiries, investigate, hear, and decide on any case involving a violation of the competition law. – This Act shall be known as the "Philippine … Capital Markets, Securities Regulation and Finance, Intellectual Property Commercialization, Licensing & Franchising, Intellectual Property Rights Enforcement Actions, Appellate Practice Involving Labor Related Cases, https://asianlegalbusiness.uberflip.com/i/690981-alb-june-2016. cܗ~�)0!n;�Q��{��A�~�Q�z �b�B ,wM�]O��jr7� � endobj Further, corporate decision makers must review potential acquisition or merger transactions to determine that these will not violate Philippine Competition Law. When the Philippine Competition Act 1 (PCA/the Act) was signed into law in July 2015 and became effective in August of the same year, it marked a turning point in Philippine law that legislators, legal practitioners, and scholars alike had long envisioned: the integration of competition policy in the Philippines. The enactment of Republic Act No. In order to be illegal, these specifically identified acts/agreements must prevent, restrict or lessen competition. A��&ϓ��L�X��)�O�_�=��ylKO�isr��]��(H� ��diMY��9(�~XX�)P�G�1��f_�:pg��Xt[k.6�0��-��8��t x��ko�F��~��pܤh�r=��IEl)R�C�ޯ�y쒔%ڍ� ��gv��7��oo��;�__��R!߉�o�J�ɯ�~��S]_�}��p��J� �N,=_N짞H��_�� t��ﮯ~q�5��-��R�U��k��|��2r��q~��z �y}�j�Dy2�bFi��3!��D�( =u�=,��V��slAI��m��y��t�X(CϏ��X(m�0^��-�Q��_>�B�r|��88�n;T��#�y%��@ Thus, prior to review of a covered merger or acquisition, parties to a transaction may confer to determine whether or not the notification requirements apply, and if so, what information must be disclosed to the Commission. The law therefore adds a crucial closing condition for acquisition and financing transactions. Abuse of dominance is a violation of Section 15 of the Philippine Competition Act (PCA).

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