Bureau of Trade Regulation and Consumer Protectionwww.dti.gov.ph/dti/index.php?p=181
|Prohibition against anticompetitive mergers|
|Merger regime suspensive||(if threshold met)|
|Prohibition of collusive agreements|
|Prohibition applying to vertical conduct|
|Prohibition against unilateral conduct||(eg abuse of dominance)|
Despite the early start and the fact that the 1987 Philippine Constitution has re-affirmed the State’s mandate to regulate or prohibit monopolies, combinations in restraint of trade and other unfair competition practices, for the sake of public interest, there is presently no comprehensive competition law in the Philippines. What it does have are several anti-trust legal provisions, ranging from the general to very specific ones, scattered among various unrelated sector-specific statutes.
As mentioned, the Revised Penal Code treats as criminal certain acts deemed to be monopolistic or in restraint of trade such as:
The more recent Price Act patterned after the Clayton Act of the United States, also penalizes price manipulation in three forms namely:
There is prima facie existence of a cartel whenever two or more persons or businesses in competition perform uniform, complementary or simultaneous acts to bring about artificial prices. The Intellectual Property Code likewise imposes criminal penalties on acts of infringement of a registered mark and unfair competition. Examples of unfair competition are selling goods which have been given the general appearance of the goods of another as to deceive the public and defraud the legitimate owner; making false statements or acting in bad faith to discredit the goods of another; or inducing the false belief that one is offering the services of another.
On the other hand, the Civil Code of the Philippines of 1950 allows, in general terms, the recovery of damages arising from unfair competition in agricultural, commercial or industrial enterprises or in labor. Note, however, that for the offending party to be liable for damages, he should have acted through the use of force, intimidation, deceit, machination, or any other unjust, oppressive or highhanded method subject to proof of clear and convincing evidence.
More specific provisions dealing with competition are those found in the Electric Power Industry Reform Act of 2001 which provides for de-monopolization and shareholding dispersal in distribution utility and holding companies. Thus, holdings of persons shall not exceed 25% of voting shares of stock unless the utility or holding company or controlling stockholders are already publicly listed. Additionally, no participant in the electricity industry may engage in any anti-competitive behavior such as cross-subsidization, price or market manipulation, or other unfair trade practices detrimental to the encouragement and protection of contestable markets. The Energy Regulatory Commission (ERC) is tasked to enforce safeguards against anyone owning, operating or controlling more than 30% of the installed generating capacity of a grid, or 25% of the national installed generating capacity and to monitor and penalize any market power abuse or anti-competitive or discriminatory act or behavior in the electric power industry. The ERC has the power to impose price controls, issue injunctions, requirement divestment or disgorgement of excess profits and impose fines and penalties. Similarly, the Downstream Oil Industry Deregulation Act of 1998, ensures fair competition and prevents cartels and monopolies by providing penalties for persons engaged in any act to fix prices, restrict outputs or divide markets, or are into predatory pricing.
As could be seen, except perhaps for the ERC in the case of the electric power industry, the prosecution of persons engaged in anti-trust or unfair competition behavior as well as recovery of civil damages arising there from is the primary responsibility of the private offended party. While the Department of Justice supervises the prosecutorial service for all criminal complaints in the country, it does not function like a trade board or commission dedicated to the enforcement of anti-competition legal provisions. Apart from this lack of specialized implementation and the absence of a cross-sector or comprehensive law against monopoly, there is also a dearth of jurisprudence on the matter. So far, the most important one is where the Philippine Supreme Court had denied a petition to declare null and void the amended by-laws of a big manufacturing company which would disqualify any stockholder from being nominated to its board of directors when he is engaged in a competing business. The Supreme Court held that a monopoly can be achieved through the suppression of competition by the unification of interest or management, or it may be thru agreement and concert of action. It further said that when a competitor, has access to the pricing policy and cost conditions of the products of the company, the essence of competition in a free market for the purpose of serving the lowest priced goods to the consuming public would be frustrated. In another case, the Supreme Court determined that an exclusivity clause which prohibited the sales personnel of a direct selling enterprise from carrying or selling its competitor’s products, was not per se void and only that whose probable effect was to foreclose competition within a substantial share of commerce can be considered void for being against public policy.
No less than the Supreme Court has said that there is a need to recast our laws on trust, monopolies, oligopolies, cartels and combinations injurious to public welfare to restore competition where it has disappeared and to preserve it where it still exists. For the past 20 years, Philippine lawmakers have attempted to pass bills to either strengthen existing legal provisions on anti-trust or come out with a comprehensive anti-competition legislation like those of their Asian counterparts.
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ACCRALAW has the most extensive and varied experience in handling anti-trust matters in the Philippines. It represented a big multinational in a matter involving the validity of its by-law’s anti-competition clause where the Supreme Court laid down a landmark ruling in Philippine jurisprudence. It has represented major firms engaged in vital industries, and collaborated with foreign counsels, in connection with anti-trust proceedings abroad. Consequently, the reputation of the Litigation and Dispute Resolution Department of ACCRALAW in the handling of intra-corporate disputes and takeovers, and anti-trust proceedings, has remained unsurpassed. ACCRALAW also pioneered in the handling of unfair competition cases arising from infringement and piracy. Presently, its Intellectual Property Department renders legal services to the world’s leading brands. The Corporate and Special Projects Department has given extensive advice on the Safeguard Measures Act and the Electric Power Industry Reform Act for various foreign and local clients. Since the 90’s, ACCRALAW has taken part in discussions and studies relative to the continuing legislative efforts toward the passage of a comprehensive and updated anti-monopoly and competition law for the country.