QuestionsQuestions (Republic Act No. 10667)
Section 2 states that the State recognizes the efficiency of market competition and seeks to enhance economic efficiency and promote free and fair competition, prevent economic concentration that unduly stifles competition, and penalize anti-competitive agreements, abuse of dominant position, and anti-competitive mergers and acquisitions to protect consumer welfare and advance domestic and international trade and economic development.
It applies to any person or entity engaged in trade, industry and commerce in the Philippines, and also to international trade with direct, substantial, and reasonably foreseeable effects in Philippine commerce, including acts done outside the Philippines. It does not apply to worker/employee combinations or agreements with employers designed solely for collective bargaining.
Under Section 4(b), an “agreement” includes any type or form of contract, arrangement, understanding, collective recommendation, or concerted action—formal or informal, explicit or tacit, written or oral.
The PCC has a Chairperson and four Commissioners (total five). They must be citizens and residents of good moral character and recognized probity, with distinguished professional experience in economics, law, finance, commerce, or engineering (10+ years active practice). At least one must be a member of the Philippine Bar with 10+ years of law practice, and at least one must be an economist. The President appoints the Chairperson and Commissioners, with terms of 7 years without reappointment; security of tenure applies and removal is only for just cause.
Section 14(a) prohibits, between or among competitors: (1) agreements restricting competition as to price (or components) or other terms of trade; and (2) agreements fixing price at an auction or in any form of bidding, including bid manipulation practices such as cover bidding, bid suppression, bid rotation, and market allocation and analogous bid-manipulation practices.
Per se prohibited agreements (Sec. 14[a]) are automatically illegal based on their nature (e.g., price fixing, bid rigging). Agreements under Sec. 14(b) are prohibited when they have the object or effect of substantially preventing, restricting, or lessening competition (e.g., setting/limiting/controlling production or markets; dividing or sharing the market).
Section 14(c) provides that agreements other than those in 14(a) and 14(b) may not necessarily be deemed a violation if they contribute to improving production or distribution or promoting technical or economic progress, while allowing consumers a fair share of the resulting benefits.
Section 15 prohibits one or more entities from abusing dominant position by engaging in conduct that would substantially prevent, restrict, or lessen competition. It enumerates specific examples such as predatory pricing, barriers to entry, tying/unrelated obligations, discriminatory pricing, and restrictions on where/how goods are sold, among others.
Under Section 15(a), it is prohibited to sell goods/services below cost with the object of driving competition out of the relevant market. The proviso requires the Commission, in evaluating, to consider whether the entity had no such object and whether the price was established in good faith to meet or compete with a lower price of a competitor selling the same or comparable product/service of like quality.
Section 15(i) includes multiple provisos: nothing prohibits having a dominant position, acquiring, maintaining, or increasing market share through legitimate means that do not substantially prevent, restrict, or lessen competition; conduct contributing to improved production/distribution and technical/economic progress with a fair share to consumers may not necessarily be considered abuse; and the Commission or relevant regulator may still pursue fair competition measures.
Under Section 17, parties to a merger or acquisition agreement with transaction value exceeding PHP 1,000,000,000.00 are prohibited from consummating until 30 days after notifying the Commission in the required form and with required information. The Commission may set additional sector-specific or threshold criteria through regulations.
An agreement consummated in violation of the notification requirement is considered void and subject to an administrative fine of 1% to 5% of the transaction value.
If within the review periods the Commission determines the agreement is prohibited under Section 20 (i.e., substantially prevents, restricts, or lessens competition) and does not qualify for exemption under Section 21, it may: (a) prohibit implementation; or (b) prohibit implementation unless modified by Commission-specified changes; or (c) prohibit implementation unless parties enter legally enforceable agreements specified by the Commission. Section 20 itself provides the substantive prohibition standard.
A prohibited merger/acquisition may be exempt if (1) it brings about or is likely to bring about efficiencies greater than the effects of any limitation on competition; or (2) a party is faced with actual or imminent financial failure and the agreement is the least anti-competitive arrangement among known alternative uses of the failing entity’s assets.
The burden of proof lies with the parties seeking the exemption. For Section 21(a), the party must demonstrate that if the agreement were not implemented, significant efficiency gains would not be realized.
Section 31 gives the PCC sole and exclusive authority to initiate and conduct fact-finding or preliminary inquiry based on reasonable grounds (motu proprio, verified complaint, or referral). It requires the preliminary inquiry to be completed within 90 days from submission/referral/initiation. It also states that, except as provided in Section 12(i) (about intervention/participation in proceedings), no law enforcement agency shall conduct fact-finding/inquiry/investigation into competition-related matters.