Philippine Competition Act

Case Overview and Summary

Summary of the Philippine Competition Act

Declaration of Policy (Section 2)
- Promote market competition as mechanism for allocating goods and services
- Safeguard competitive conditions in key economic sectors
- Provide equal opportunities to promote entrepreneurship and private investments
- Prohibit monopolies and combinations in restraint of trade when against public interest

Scope and Application (Section 3)
- Enforceable against entities engaged in trade, industry and commerce in the Philippines
- Applies to international trade with effects in the Philippines
- Excludes combinations or activities of workers for collective bargaining

Definitions (Section 4)
- Defines key terms like acquisition, agreement, conduct, confidential business information, control, dominant position, entity, market, merger, relevant market

Philippine Competition Commission (Sections 5-13)
- Establishes the Philippine Competition Commission (PCC) as an independent quasi-judicial body
- Outlines composition, qualifications, term of office, and prohibitions for Commissioners
- Grants PCC powers to conduct inquiries, review mergers, impose penalties, issue orders, and formulate competition policy
- Establishes confidentiality rules for business information (Section 34)

Prohibited Acts (Sections 14-15)
- Prohibits anti-competitive agreements among competitors, including price fixing, bid rigging, market allocation (Section 14)
- Prohibits abuse of dominant position through practices like predatory pricing, raising barriers to entry, discrimination, tying arrangements (Section 15)

Mergers and Acquisitions (Sections 16-23)
- Grants PCC power to review mergers and acquisitions based on relevant factors
- Requires compulsory notification for mergers above P1 billion (Section 17)
- Allows PCC to prohibit or modify anti-competitive mergers (Section 18)
- Provides exemptions for mergers with efficiency gains or involving a failing firm (Section 21)

Determination of Relevant Market and Dominance (Sections 24-27)
- Outlines factors for determining relevant market and geographic area (Section 24)
- Defines criteria for determining control of an entity (Section 25)
- Provides guidelines for assessing anti-competitive agreements or conduct (Section 26)
- Establishes rebuttable presumption of market dominance at 50% market share (Section 27)

Enforcement and Penalties (Sections 28-45)
- Allows PCC to forbear from applying the Act in certain cases (Section 28)
- Imposes administrative fines up to P250 million for violations, with higher penalties for subsequent offenses (Section 29)
- Imposes criminal penalties of 2-7 years imprisonment and P50-250 million fines for anti-competitive agreements (Section 30)
- Outlines procedures for fact-finding, preliminary inquiry, and full investigation (Section 31)
- Establishes leniency program for entities that voluntarily disclose anti-competitive agreements (Section 35)
- Allows non-adversarial remedies like binding rulings, show cause orders, and consent orders (Section 37)
- Grants PCC power to punish for contempt with fines up to P100,000 or imprisonment up to 30 days (Section 38)
- Allows appeals of PCC decisions to the Court of Appeals (Section 39)
- Triples fines for violations involving basic necessities and prime commodities (Section 41)
- Provides immunity from suit and indemnification for PCC officials acting in good faith (Sections 42-43)
- Gives Regional Trial Courts original jurisdiction over competition cases (Section 44)
- Allows private civil actions for direct injury from violations (Section 45)

Other Provisions (Sections 46-55)
- Sets 5-year statute of limitations for violations (Section 46)
- Prohibits courts from issuing temporary restraining orders or injunctions against PCC, except under limited circumstances (Section 47)
- Allows trade associations for promoting quality standards without anti-competitive intent (Section 48)
- Establishes Congressional Oversight Committee on Competition (Section 49)
- Requires implementing rules and regulations within 180 days (Section 50)
- Appropriates initial budget of P300 million for PCC (Section 51)
- Provides 2-year transitional period for existing structures to comply (Section 53)
- Repeals inconsistent laws like Article 186 of Revised Penal Code and EO 45 (Section 55)