Agreements which restrict competition with regard to price, price components or other commercial conditions are prohibited in themselves. Therefore, when an agreement provides for prices, it is considered anti-competitive under the PCA. The CCP`s powers include its power to review and prohibit proposed mergers and acquisitions. If PCC determines that a merger and/or acquisition is anti-competitive, it may: (a) prohibit the performance of the agreement providing for such a merger and/or acquisition, (b) require amendments to the terms of the agreement contemplating such a merger and/or acquisition by specifying such amendments; or (c) require the parties to enter into legally enforceable agreements. [5] The Philippine Competition Act, officially known as Republic Act No. 10667, is a Philippine law passed on July 21. It was signed by President Benigno Aquino III in July 2015 and established the Philippine Quasi-Judicial Competition Commission to enforce the law. [1] [2] [3] [4] The law aims to ensure efficient and fair market competition between enterprises active in commerce, industry and all commercial economic activities. [3] It prohibits anti-competitive agreements, abuses of dominance and mergers and acquisitions that restrict, prevent and restrict competition. [5] The Philippine Senate recently passed a bill called the Fair Competition Act of 2014 (Senate Bill), which is now in its third and final reading. His counter-bill in the House of Representatives is currently awaiting second reading. In general, any bill passed by the Philippine Congress must go through three readings in the Senate and the House of Representatives. Once passed by both Houses, a bicameral conference committee will consolidate the two bills.
The consolidated bill then becomes legislative after approval by the President of the Philippines. The Senate bill aims to promote a free market economy and promote business competition in the Philippines. To that end, it prohibits anti-competitive activities that distort, manipulate or restrict the functioning of the relevant markets in the Philippines. It also provides for the creation of the Fair Competition Commission (FCC) and includes an extraterritoriality provision. The PCA imposes administrative, civil and criminal responsibilities[11], all of which apply to anti-competitive agreements. Only administrative and civil liability may be incurred for infringements of abuse of a dominant position and anti-competitive concentrations. The PCA also contains a catch-all provision under which any agreement other than those expressly listed in the law that purports to have the same objective or effect of substantially preventing, restricting or lessening competition must be considered anti-competitive. [7] The second type of anti-competitive agreement includes those which provide for the control or fixing of production, markets, technical developments or investments. and the division or division of the market in volume or sales or purchases, territory, type of goods or services, buyers or sellers or other means. These are schemes implemented by competing undertakings in order to control a geographical area, market share, sales or other market factors. An example of this would be if Company A operates in Luzon, while Company B agrees to serve exclusively the market in the Visayas region.
This type of regulation is generally used to prevent competition, especially if the cost of entering the industry in a particular area is high. With regard to criminal liability, companies that enter into anti-competitive agreements are liable to imprisonment and fines if they fall within the first two distinctions established by the PCA, namely: those that are prohibited per se and those that have as their object or effect the prevention, restriction or restriction of competition. The penalty of deprivation of liberty is imposed on the officers and directors responsible for the injured legal person. In December 2014, the House Economic Affairs Committee released a bill (i.e. House Bill No. 5286) that consolidates 12 antitrust laws in the 16th House Congress (the House Bill). The House of Representatives bill is pending for second reading in the House of Representatives. Similar to the Senate bill, the House bill generally prohibits anti-competitive agreements, abuse of dominance and anti-competitive mergers. The House bill also prohibits certain unfair competition practices and certain unfair or misleading commercial or commercial practices. The House bill also provides for the establishment of a Philippine Competition Commission (CCP) with broad powers to enforce the provisions of the enacted antitrust law.
The House bill provides for a series of indisputable administrative penalties ranging from 1% to 5% of the company`s total turnover in the previous fiscal year. In case of non-compliance or negligence of a CCP order, a fine of PHP 50,000 to PHP 200,000 can be imposed for each violation. Any day of continuation of such omission or negligence is considered a separate criminal offence. For the transmission of false or misleading information to the PCC, a fine of PHP 5,000 to 100,000 can be imposed for each violation. The House bill provides for criminal sanctions against companies that enter into anti-competitive agreements, which may include a prison sentence of five to 10 years or a fine of up to 10% of the annual turnover of the injured company in the previous financial year, or up to 10% of the value of the injured assets, whichever is greater. or both imprisonment and fine. Like the Senate bill, the administrative or criminal penalty imposed is automatically tripled if the violation involves the trade or movement of basic necessities or food. Overall, anti-competitive agreements[6] are those that significantly impede or stifle competition. Anti-competitive agreements can be divided into two (2) types: (1) an agreement that is prohibited in itself (“prohibited in itself”); 2. an agreement the object or effect of which is to impede, restrict or substantially restrict competition.
In administrative proceedings, offenders are fined PHP 50 million for the first offence and a maximum fine of PHP 200 million for the third offence. Failure to comply with an FCC order, on the other hand, will result in a fine of at least PHP 1 million for each violation and a similar amount for each 30-day delay. Providing false or misleading information to the FCC will also result in a fine of at least PHP 1 million. In criminal proceedings, offences may be punishable by imprisonment or a fine, or both. The prison sentence can vary from two to five years, while the amount of the fine ranges from PHP 100 million to PHP 200 million for each violation. In the case of legal persons, the penalty of deprivation of liberty is imposed on the officers and directors responsible for the company. .