Philippine Competition Act (PCA) COMPETITION IS ABOUT MARKET PERFORMANCE:

Penalties to company: 50Million  Prices (CM = lower price if ACM higher

price)
Competition Law: Merger Review: Abuse of Dominance
 Choices (CM= more choices, ACM, less
Cases: Place in cornerstone role in pre-market economy
choices)
in the Philippines in Government controlled economy
 Quality (CM=High quality, ACM= Less
which is different in free market economy.
quality)
MARKET COMPETITION: **CM= Competitive Market
**ACM= Anti-Competitive Market
BENEFITS OF COMPETITION:
BENEFITS OF COMPETITION
Why does market competition matters to all of us?
Ensuring business and compete and consumers 1. Informed Public
benefit. We safeguard competition. 2. Engaged Stakeholders
3. Equipped partners
Help achieves inclusive economic development.
(Ambisyon Natin 2040) ________________________________________

 Reduced Inequality RA 10667

 Increase growth potential
IMPROTANT THINGS
 Consumer welfare improved
 Market efficiency improved 1. When Business competes, consumer benefits
 Anti- competitive practices diminished 2. Competition acts as big role in market
 Barriers to entry reduced 3. PCA is 1st law promoting market competition in
 Limit to entrepreneurship reduced every Philippine Industry

Competition bolster the other factors of poverty

reduction:
Salient Features of the law:
 Innovation
DECLARATION OF POLICY
 Higher Income
 Lower Cost A. Enhance Economic Efficiency
 Business entry expansion B. Prevent economic concentrations which will
 High quality more choices control production, distribution and trade
 Consumer welfare improvement C. Penalize all forms of anti-competitive
 Inclusive growth agreements, abuse of dominant position, and
 Poverty reduction anti competitive mergers and acquisition

PCC prioritizes sectors: WHO COVERED:

1. Agriculture 1. Any person or entity engaged in any trade,

2. Manufacturing industry and commerce natural or juridical
3. Power Generation 2. GOCCS
4. Human Capital 3. Trade association if used in violation of PCA
5. Electricity Distribution
6. Telecommunications
7. Transportation
TRANSACTION COVERED:
1. Local Trade
2. International Trade having direct, substantial
and reasonably foreseeable effects in trade,
industry or commerce in Philippines. –
D. PCA Penalizes business practices that
substantially lessen competition:
PROHIBITED PRACTICES UNDER PCA
HORIZONTAL AGREEMENTS: operating in same level-
guilty of Anti Competitive
1. Price Fixing
2. Bid Rigging
3. Output Restriction
4. Market Allocation
5. Agreements other than those specified in a and
b of this section which have the object or effect
of substantially preventing, restricting or
lessening competition ***(VERTICAL
AGREEMENT)
6. Predatory Pricing- dominant player bring down
prices, the others will close
***VERTICAL AGREEMENTS. Example manufacturer of
vaccine engage with LBC exclusive only to LBC and
perpetual.
E. PCC is mandated to promote market
competition in every Philippine industry
FUNCTIONS OF PCC:
 Investigate Anti- competitive Business
 Imposes Fines on Anti-competitive Business
 Review Mergers and acquisitions
***PCC has moto-proprio review, a quasi-judicial
agency, their decision is appealable to CA then to
SC. They can Issue TRO, impcse fine 50M- 250M,
MTC has no jurisdiction, They are also immunity
from suit.
F. You can help PCC promote competition
INVESTIGATES:
1. ANTI-COMPETITIVE AGREEMENTS- agreement
not to compete, the object or effect of which is
to lessen competition
2. ABUSE OF DOMINANT POSITION
3. ANTI- COMPETITIVE MERGERS
 By investigation and litigation division.
DECLARATION OF POLICY:
1. Penalizes all forms of anti-competitive
agreements, abuse of dominant position and
anti-competitive mergers and acquisitions,
with the objectives of protecting consumers
welfare and advancing domestic and
international trade and economic
development.
What is agreement (PCA Sec 4b)- any type or form of
contract whether or not legally binding. ,
- Settlement agreement or areglo,
- trade association rules,
- TACIT Agreement.
- Inferred Agreement.
COMPETITION- a situation in a market in which fimrs or
sellers independently strive for the patronage of buyers
in order to achieve particular business objectives; profit,
sales or market.- PROTECTING CONSUMERS
WHO ARE NOT COMPETITORS:
1. An entity that controls, is controlled by, or is
under common control with another entity or
entities
2. Entities that have common economic interest
3. Entities that are unable to decide or act
independently of each other
INTRA-ENTERPRISE CONSPIRACY- agreement between
parent company and its wholly owned subsidiary.
CONTROL BY PARENT, It does not apply to partially VIOLATIONS FOR CARTEL: Criminal in nature. Violator
owned subsidiaries. may be imprisoned up to 7 YEARS and imposed of at
least P50M but not more than 250M.
ENTITIES: refers to person, natural or juridical, sole
proprietorship, partnership. Combinations or
associations whether incorporated or not (GOCC),
Sec 14c: Agreements other than and b shall also be
ENGAGED DIRECTLY OR INDERECTLY IN ANY
ECONOMIC ACTIVITY. prohibited unless there is justification.

DOMININANT PLAYER
GOCC- entities yes

Non stock non-profit- YES, covered - Entity whose relevant market is atleast 50%
- Monopolist
Charitable Institution- YES covered

PROHIBITED PRACTICES UNDER PCA

MARKET- group of goods or services that are sufficiently
HORIZONTAL AGREEMENTS: operating in same level- interchangeable or substitutable and object of
guilty of Anti Competitive – also called CARTELS competition

1. Price Fixing- per se violation Relevant Market- comprise all those goods that are
2. Bid Rigging- per se violation, cover bidding substitutable or interchangeable
(with deficiency), bid suppression (does not like
to bid anymore) , bid rotation (particular
company will win in different project.
3. Output Restriction- no per se- need to prove the
violation
4. Market Allocation- not per se violation- settling
limits, agreement to provide in different
territory
5. Agreements other than those specified in a and
b of this section which have the object or effect
of substantially preventing, restricting or
lessening competition ***(VERTICAL
AGREEMENT)
6. Predatory Pricing- dominant player bring down
prices, the others will close

***VERTICAL AGREEMENTS. Example manufacturer of

vaccine engage with LBC exclusive only to LBC and
perpetual.

Section 14b: Object or effect violations: similar to per

se violation.

CARTELS- Business conniving to manipulate the market

to their advantage.