Philippine Competition Act
RA 10667
“Enabling Everybody Everyday towards Excellence”
PHILIPPINE COMPETITION ACT
Republic Act No. 10667
An act providing for a national competition policy prohibiting anti-competitive
agreements, abuse of dominant position, and anti-competitive mergers and
acquisitions, and establishing the Philippine Competition Commission.
Effective July 21, 2015
WHAT BUSINESSES AND ENTITIES
DOES THE PCA COVER
The PCA covers any person or entity in trade, industry, and commerce
in the Philippines. It also applies to international trade having direct,
substantial, and reasonably foreseeable effects in trade industry, or
commerce in the Philippines, including those that result from acts done
outside the Philippines. (Sec. 3 – Scope and Application)
WHY COMPETITION MATTERS
• Create equal business opportunity.
• Preserve the consumers right of choice.
• Promote free and fair competition in the trade.
For consumers:
When business compete, consumers benefit through lower prices, more product
choices and better-quality goods and services. (PCC An overview of PCA)
For businesses:
Businesses benefit from competition, too. In competitive markets, no company
benefits from undue advantage. This makes it easier to start and operate a new
business. Competition enable small businesses to compete with bigger business
on fair terms. (PCC An overview of PCA)
WHAT ARE THE PROHIBITED ACTS
UNDER THE PCA
ANTI-COMPETITIVE PRACTICES
Anti-Competitive Agreements
Abuse of Dominant Position
Mergers and Acquisitions
ANTI-COMPETITIVE AGREEMENTS
Anti-competitive agreements are those that substantially
prevent, restrict, or lessen competition. Any type or form of
contract, arrangement, or understanding between or among
businesses to fix prices or manipulate bids.
It may be written or verbal agreement, formal or informal.
It is illegal for business rivals to act together in ways that can limit
competition or hinder other businesses from entering the market.
a.) AGREEMENTS, BETWEEN OF AMONG
COMPETITORS, ARE PER SE PROHIBITED
(Sec. 14 (A))
Agreements that restrict competition as to the price, or components
thereof, or other terms of trade. (PRICE FIXING)
example: A, B, and C offer the same product at competitive prices. A
offers his product to customer D at Php 100; B offers his product to
customer D at Php 95; C offers his product to customer D at Php 110.
A,B, and C agreed to fix the selling price to Php 150. Hence, costumer
D ends up paying a higher price at Php 150.
Agreements that fix price at an auction or in any form of
bidding including cover bidding, bid suppression and
market allocation and other analogous practices of bid
manipulation. (BID RIGGING)
examples:
Cover bidding – competitors agree to submit bids that involve either
submitting a bid higher than winning bid.
Bid suppression – one or more competitors will not submit a bid or
withdraw a previously submitted bid.
Bid rotation – competitors making turns in being the winning bidder.
b.) AGREEMENTS WHICH HAVE THE OBJECT
OR EFFECT OF SUBSTANTIALLY PREVENTING,
RESTRICTING, OR LESSENING COMPETITION
(Sec. 14 (B))
Agreements which set, limit, control production, market and
technical development, or investment to increase prices or
stop prices from falling. (OUTPUT LIMITATION)
examples:
Competitors agree to limit production of certain goods or restrict the
volume on the market.
Refuse to supply to the market.
Agreements which have the effect of dividing or sharing the
market, whether by volume of sales or purchases, territory,
type of goods or services, buyers or sellers or any other
means. (MARKET SHARING)
example:
Competitors agree to divide or allocate customers,
suppliers of geographical areas among themselves.
Cartels
Organization formed by competitors in a specific industry,
which enables them to set or control levels of production.
Agreements to form cartels or to collude are considered
anti-competitive agreement. (PCC An overview of PCA)
ABUSE OF DOMINANT POSITION
The PCA defines abuse of dominant position as a
conduct of an entity, whether a company or an
individual, with dominant position, that substantially
prevents, restricts, or lessens competition in the
market.
ABUSE OF DOMINANT POSITION
Dominant companies impose barriers of entry, commit
acts that prevent competitors from growing within the
market in an anti-competitive manner.
Presumption of dominance
If the market share of an entity in the
relevant market is at least fifty percent
(50%).
HOW DO COMPANIES ABUSE THEIR
DOMINANT POSITION
Selling of goods or services below cost with the objective of
driving competition out of relevant market. (Predatory Pricing)
example:
Tying and bundling
Tying – when a company with dominant position requires
customers to buy one product (the “tying product”) in order to buy
another product (the “tied product”).
Bundling - when a company with dominant position sells package
of two or more products at a discount.
A dominant firm sets different prices or conditions for
equivalent transactions. (Price Discrimination)
example:
giving preferential discounts and rebates to different
customers for the same product.
A dominant firm charges excessive or unfair prices,
or employs other unfair trading conditions.
(Exploitative behavior)
Other practices
Making supply of particular goods or services dependent
upon the purchase of other goods and services from
the suppler which have no direct connection with the main
goods or services to be supplied.
Making a transaction subject to acceptance by the other
parties of other obligations which by their nature or
according to commercial usage, have no connection with
the transaction.
Landmark case of abuse of dominant
position (PCC)
Urban Deca Homes Manila Condominium Corporation
entered into a exclusive agreement with one internet
service provider.
On March 2019, the PCC charged Urban Deca Homes
Manila Condominium Corporation for abuse of dominance
by imposing a sole internet service provider (ISP) on its
residents and tenants, preventing the residents and
tenants from availing other providers. The PCC imposed a
penalty f PHP 27.11 million.
MERGERS AND ACQUISTIONS
Mergers and acquisitions which substantially
prevent, restrict, or lessen competition in the
relevant market or in the market for goods or
services as may be determined by the
Commission. (Sec. 20)
What is Merger?
Joining of two or more entities into an existing entity or to form a
new entity.
What is Acquisition?
Purchase of securities or assets for the purpose of obtaining
control of another entity.
Not all M&As are prohibited. The PCA only prevents M&As that
substantially lessen competition or M&As that create companies
with dominant market power that could potentially lessen, restrict,
or prevent competition. (PCC An Overview of PCA)
WHAT TO DO WHEN FACED WITH ANTI-
COMPETITVE ACTIVITY
1st – Use and show the “Philippine Competition Act” 1 pager to explain to
the outlet that he can carry on selling and promoting our products.
2nd – Request for a copy of the signed document / contract deemed to be
anti-competitive (if outlet is unwilling to give a copy, request that you be
allowed to take a picture of the same).
3rd – Share the documents to respective MTM or RCM.
4th – MTM or RCM report the incident to ABI & ABHP.
5th – Consult ABI Legal Department for assistance in filing a Complaint.
PHILIPPINE COMPETITION COMMISSION
(PCC)
The Philippine Competition Commission (PCC) has the original
and primary jurisdiction in the enforcement and regulation of the
all competition-related issues.
PROCEDURE ON FILING A COMPLAINT
WITH PCC
Three (3) Modes of filing a complaint:
1. E-Complaint Portal
2. Filing a Verified Complaint
3. Send an email to queries@pcc.gov.ph
1. E-Complaint Portal
2. Verified Complaint
Filing a Complaint-Affidavit directly to the PCC. The PCC Enforcement Office shall conduct the
Preliminary Investigation.
The Enforcement Office will issue a Resolution on the basis of reasonable grounds to conduct a
Full Administrative Investigation.
The Enforcement Office may also refer the case to the Department of Justice criminal complaints
for proper determination probable and prosecution before the proper court.
3. Email queries to queries@phpcc.gov.ph
ADMINISTRATIVE PENALTIES (SEC. 29)
(a)1st Offense - fine up to one hundred million pesos
(P100,000,000.00)
(b) 2nd Offense - fine of not less than one hundred
million pesos (P100,000,000.00) but not more than
two hundred fifty million pesos (P250,000,000.00).
