Question & AnswerQ&A (IRR OF Republic Act No. 10667)
The Rules apply to any entity engaged in trade, industry or commerce in the Philippines or in international trade that has direct, substantial, and reasonably foreseeable effects in the Philippines. It excludes combinations or activities of workers or employees designed solely to facilitate collective bargaining.
Acquisition refers to the purchase or transfer of securities or assets through contract or other means for the purpose of obtaining control by one or more entities over another entity or entities.
Agreements between or among competitors that restrict competition as to price or other terms of trade, and those that fix prices at auctions or bidding, including cover bidding, bid suppression, bid rotation, market allocation, or analogous bid manipulation practices are per se prohibited.
Abuse includes selling below cost to drive competition out, imposing barriers to entry, making transactions subject to unrelated obligations, unreasonable price discrimination, restrictions on resale, tying supply to unrelated goods, imposing unfair prices on marginalized groups, limiting production or markets to consumers' prejudice, among others.
Compulsory notification is required if the ultimate parent entity's annual gross revenues or assets in the Philippines exceed PhP1 billion, and the transaction value also exceeds PhP1 billion based on specific criteria related to asset value or gross revenues from sales either within or into the Philippines.
The transaction shall be considered void and the parties involved may be subject to administrative fines ranging from 1% to 5% of the value of the transaction.
The parties seeking exemption must prove either that the merger/acquisition brings gains in efficiencies outweighing the competition limitations or that a party to the agreement is facing actual or imminent financial failure and the transaction is the least anti-competitive alternative.
The Commission considers factors such as the entity's market share, ability to set prices unilaterally, barriers to entry, competitor existence and power, countervailing buying power, access to inputs, recent conduct, ownership of infrastructure, technological advantages, financial access, economies of scale, integration, and sales network.
Control means the ability to substantially influence or direct decisions or actions of an entity, through ownership, agreements, power to appoint/remove directors, voting power, use of assets, or decisive contractual rights. Ownership of over 50% voting power generally presumes control unless rebutted.
The Commission may, motu proprio or upon application, refrain from applying provisions of the Act or Rules temporarily for up to one year if enforcement is unnecessary for policy objectives, will not impede competition, is in public interest, and is economically justified. Extensions require Commission approval.