Definitions
- Key terms defined include Acquisition, Agreement, Conduct, Commission, Confidential business information, Control, Dominant position, Entity, Joint venture, Market, Merger, Relevant market, Ultimate parent entity.
- Acquisition involves obtaining control through securities or assets.
- Agreement includes all forms of contracts or arrangements.
- Control means substantial influence over decisions or actions.
Prohibited Acts
- Anti-Competitive Agreements:
- Per se prohibited: price fixing, bid rigging.
- Also prohibited if they substantially lessen competition.
- Exceptions if contributing to improved production or progress benefiting consumers.
- Abuse of Dominant Position includes:
- Predatory pricing.
- Barriers to entry.
- Discriminatory pricing.
- Restrictive sale/lease conditions.
- Unfair pricing impacting marginalized sectors.
- Limitations on production or technical development.
- Entities under common control not considered competitors.
Mergers and Acquisitions Review
- Commission reviews transactions with direct, substantial, and foreseeable effects on the Philippine market.
- Assessment includes potential competition impact and efficiency gains.
- Notification thresholds:
- Aggregate annual revenues or asset value exceed Php 1 billion.
- Transaction value exceeds Php 1 billion.
- Notification required before consummation.
- Joint ventures treated as acquiring/acquired entities.
- Successive transactions within one year treated as one.
- Non-compliance results in transaction void and fines.
Notification Procedure
- Pre-notification consultation available.
- Submission of Notification Form, fees, certifications, and affidavits required.
- Waiting period for review with phase I (30 days) and possible phase II (additional 60 days).
- Parties must inform of modifications; failure to provide data may expire notification.
- Proceedings may be terminated early by the Commission.
- Approval deemed if no decision by end of waiting period.
Commission Actions on Mergers and Acquisitions
- Can prohibit, modify, or condition implementation of transactions found to violate the law.
- Publication of notification summary on Commission website balancing confidentiality.
- Commission may modify notification thresholds and rules over time.
Prohibited and Exempt Transactions
- Transactions substantially lessening competition are prohibited.
- Exemptions if parties prove efficiency gains or failing entity scenario.
- Ownership for investment only and without control generally allowed.
- Burden of proof lies with entities seeking exemption.
- Favorable Commission rulings on transactions are generally final unless fraud is involved.
Confidential Information
- Confidential business information protected unless disclosure is necessary for enforcement or legally required.
- Parties must justify confidentiality claims and provide non-confidential versions.
- Commission may share information with foreign competition authorities if confidentiality is waived.
Determination of Relevant Market
- Considers substitutability, geographic factors, costs, economic and legal restrictions affecting source and supply.
Determination of Control
- Control includes ability to substantially influence or direct entity decisions.
- Presumed if ownership exceeds 50% of voting rights; also exists under other specified conditions even with less ownership.
Determination of Anti-Competitive Agreement or Conduct
- Commission assesses relevant market, actual/potential impact on competition, efficiency gains, and commercial rationale.
- Balances intervention risks and market development needs.
Determination of Dominance
- Dominance includes single or collective dominance.
- Factors include market share, barriers to entry, competitors’ power, bargaining strength of customers, assets, technology, scale, vertical integration.
- Rebuttable presumption of dominance if market share at least 50%.
- Commission may set sector-specific thresholds.
- Legitimate competition through superior business conduct excluded from violations.
Forbearance
- Commission may forbear from applying the Act for limited time if enforcement is unnecessary or inconsistent with public interest.
- Maximum one-year duration with possible renewal.
- Public hearing required before forbearance.
- Conditions may be imposed; order may be withdrawn if basis ceases.
Final Provisions
- Commission may revise the rules after consultation.
- Severability clause applies for invalidated provisions.
- Rules effective 15 days after publication in newspapers.