1.

Tatad vs Secretary of the Department of Energy 281 SCRA 330 (1997)

FACTS: A group of Philippine legislators brought this case to challenge the constitutionality of
Republic Act No. 8180, otherwise known as the Downstream Oil Industry Deregulation Act of
1996, specifically Sections 5(b), 6 and 9(b) of the Act.

In March 1996, Congress took the audacious step of deregulating the downstream oil industry. It
enacted R.A. No. 8180, entitled the "Downstream Oil Industry Deregulation Act of 1996." Under
the deregulated environment, "any person or entity may import or purchase any quantity of
crude oil and petroleum products from a foreign or domestic source, lease or own and operate
refineries and other downstream oil facilities and market such crude oil or use the same for his
own requirement," subject only to monitoring by the Department of Energy.

Section 5(b) provides:

b) Any law to the contrary notwithstanding and starting with the effectivity of this Act,
tariff duty shall be imposed and collected on imported crude oil at the rate of three
percent (3%) and imported refined petroleum products at the rate of seven percent (7%),
except fuel oil and LPG, the rate for which shall be the same as that for imported crude
oil: Provided, That beginning on January 1, 2004 the tariff rate on imported crude oil and
refined petroleum products shall be the same: Provided, further, That this provision may
be amended only by an Act of Congress.

Section 6 provides:

To ensure the security and continuity of petroleum crude and products supply, the DOE
shall require the refiners and importers to maintain a minimum inventory equivalent to
ten percent (10%) of their respective annual sales volume or forty (40) days of supply,
whichever is lower,"

Section 9(b) provides:

To ensure fair competition and prevent cartels and monopolies in the downstream oil
industry, the following acts shall be prohibited:

(b) Predatory pricing which means selling or offering to sell any product at a price
unreasonably below the industry average cost so as to attract customers to the
detriment of competitors.

Petitioners’ Arguments:
● The imposition of different tariff rates on imported crude oil and imported refined
petroleum products violates the equal protection clause. Petitioner contends that
the 3%-7% tariff differential unduly favors the three existing oil refineries and
discriminates against prospective investors in the downstream oil industry who
 do not have their own refineries and will have to source refined petroleum
products from abroad.
● The imposition of different tariff rates does not deregulate the downstream oil
industry but instead controls the oil industry, contrary to the avowed policy of the
law. Petitioner avers that the tariff differential between imported crude oil and
imported refined petroleum products bars the entry of other players in the oil
industry because it effectively protects the interest of oil companies with existing
refineries. Thus, it runs counter to the objective of the law "to foster a truly
competitive market."
● Tinclusion of the tariff provision in section 5(b) of R.A. No. 8180 violates Section
26(1) Article VI of the Constitution requiring every law to have only one subject
which shall be expressed in its title. Petitioner contends that the imposition of
tariff rates in section 5(b) of R.A. No. 8180 is foreign to the subject of the law
which is the deregulation of the downstream oil industry.

The petitioners alleged that the Big Three oil companies – Petron, Shell and Caltex -- were
producing and processing almost identical products which they were selling to the general
public at identical prices. When one company adjusted its prices upwards or downwards, the
other two followed suit at practically the same time, and by the same amount. The
aforementioned oil companies were able, among other things, to determine gas prices because
Republic Act 8180, the Oil Deregulation Law, lifted government controls over downstream oil
industry.

On the other hand, section 19 of Article XII of the Constitution allegedly violated by the
aforestated provisions of R.A. No. 8180 mandates: "The State shall regulate or prohibit
monopolies when the public interest so requires. No combinations in restraint of trade or unfair
competition shall be allowed."

A monopoly is a privilege or peculiar advantage vested in one or more persons or companies,

consisting in the exclusive right or power to carry on a particular business or trade, manufacture
a particular article, or control the sale or the whole supply of a particular commodity. It is a form
of market structure in which one or only a few firms dominate the total sales of a product or
service. On the other hand, a combination in restraint of trade is an agreement or understanding
between two or more persons, in the form of a contract, trust, pool, holding company, or other
form of association, for the purpose of unduly restricting competition, monopolizing trade and
commerce in a certain commodity, controlling its, production, distribution and price, or otherwise
interfering with freedom of trade without statutory authority. Combination in restraint of trade
refers to the means while monopoly refers to the end.

ISSUE: Did R.A. No. 8180 violate §19, Article XII of the Constitution prohibiting monopolies,
combinations in restraint of trade and unfair competition? (YES)
RULING: Petition granted. R.A. No. 8180 violated §19, Article XII of the Constitution
prohibiting monopolies, combinations in restraint of trade and unfair competition.

[I]t cannot be denied that our downstream oil industry is operated and controlled by an oligopoly,
a foreign oligopoly at that. Petron, Shell and Caltex stand as the only major league players in
the oil market. All other players belong to the lilliputian league. As the dominant players, Petron,
Shell and Caltex boast of existing refineries of various capacities. The tariff differential of 4%
therefore works to their immense benefit. Yet, this is only one edge of the tariff differential. The
other edge cuts and cuts deep in the heart of their competitors. It erects a high barrier to the
entry of new players. New players that intend to equalize the market power of Petron, Shell and
Caltex by building refineries of their own will have to spend billions of pesos. Those who will not
build refineries but compete with them will suffer the huge disadvantage of increasing their
product cost by 4%. They will be competing on an uneven field. The argument that the 4% tariff
differential is desirable because it will induce prospective players to invest in refineries puts the
cart before the horse. The first need is to attract new players and they cannot be attracted by
burdening them with heavy disincentives. Without new players belonging to the league of
Petron, Shell and Caltex, competition in our downstream oil industry is an idle dream.

The provision on inventory widens the balance of advantage of Petron, Shell and Caltex against
prospective new players. Petron, Shell and Caltex can easily comply with the inventory
requirement of R.A. No. 8180 in view of their existing storage facilities. Prospective competitors
again will find compliance with this requirement difficult as it will entail a prohibitive cost. The
construction cost of storage facilities and the cost of inventory can thus scare prospective
players. Their net effect is to further occlude the entry points of new players, dampen
competition and enhance the control of the market by the three (3) existing oil companies.

Finally, we come to the provision on predatory pricing which is defined as “. . . selling or offering
to sell any product at a price unreasonably below the industry average cost so as to attract
customers to the detriment of competitors.” Respondents contend that this provision works
against Petron, Shell and Caltex and protects new entrants. The ban on predatory pricing
cannot be analyzed in isolation. Its validity is interlocked with the barriers imposed by R.A. No.
8180 on the entry of new players. The inquiry should be to determine whether predatory pricing
on the part of the dominant oil companies is encouraged by the provisions in the law blocking
the entry of new players. Text-writer Hovenkamp gives the authoritative answer and we quote:

xxx xxx xxx

The rationale for predatory pricing is the sustaining of losses today that will give a firm monopoly
profits in the future. The monopoly profits will never materialize, however, if the market is
flooded with new entrants as soon as the successful predator attempts to raise its price.
Predatory pricing will be profitable only if the market contains significant barriers to new entry.

As aforementioned, the 4% tariff differential and the inventory requirement are significant
barriers which discourage new players to enter the market. Considering these significant
barriers established by R.A. No. 8180 and the lack of players with the comparable clout of
PETRON, SHELL and CALTEX, the temptation for a dominant player to engage in predatory
pricing and succeed is a chilling reality. Petitioners’ charge that this provision on predatory
pricing is anti-competitive is not without reason.

[R.A. No. 8180 contained a separability clause, but the High Tribunal held that the offending
provisions of the law so permeated its essence that it had to be struck down entirely. The
provisions on tariff differential, inventory and predatory pricing were among the principal props
of R.A. No. 8180. Congress could not have deregulated the downstream oil industry without
these provisions.]

2. Intel Corporation v. Commission Case C-413/14P, EU:C:2017:632 (CJEU,

September 6, 2017)

FACTS: According to the Commission, the abuse was characterized by several measures
adopted by Intel vis-à-vis its own customers (computer manufacturers) and a European retailer
of microelectronic devices, Media-Saturn-Holding. Accordingly, Intel granted rebates to four
major computer manufacturers (Dell, Lenovo, HP and NEC) on the condition that they
purchased from Intel all, or almost all, of their x86 CPUs. Similarly, Intel awarded payments to
Media-Saturn, which were conditioned on the latter selling exclusively computers containing
Intel’s x86 CPUs. According to the Commission, those rebates and payments induced the
loyalty of the four manufacturers listed above and of Media-Saturn, and thus significantly
diminished the ability of Intel’s competitors to compete on the merits of their x86 CPUs. Intel’s
anti-competitive conduct thereby resulted in a reduction of consumer choice and in lower
incentives to innovate. On the basis of the 2006 Guidelines, the Commission imposed a fine of
€1.06 billion on Intel. Intel brought an action against the Commission’s decision before the
General Court, seeking the annulment of that decision or, at least, a substantial reduction of the
fine.

By judgment of 12 June 2014, 7 the General Court dismissed Intel’s action in its entirety. Intel
brought an appeal against the judgment of the General Court before the Court of Justice.
According to Intel, the General Court, inter alia, erred in law by failing to examine the rebates at
issue in the light of all the circumstances of the case.

ISSUE: WON the rebate scheme at issue was capable of having foreclosure effects on as
efficient competitors?

RULING: YES. The rebates at issue were by their very nature capable of restricting competition
and that an as efficient competitor would have had to offer prices which would not have been
viable and that, accordingly, the rebate scheme was capable of foreclosing such a competitor.
The AEC test played an important role in the Commission’s assessment of whether the rebate
scheme at issue was capable of having foreclosure effects on as efficient competitors. The
Court therefore holds that the General Court was required to examine all of Intel’s arguments
concerning that test (such as, inter alia, the errors allegedly committed by the Commission as
regards that test), which the General Court failed to do.

DISPOSITIVE PORTION: The Court therefore sets aside the judgment of the General Court as
a result of that failure in its analysis of whether the rebates at issue were capable of restricting
competition. The Court refers the case back to the General Court so that it may examine, in the
light of the arguments put forward by Intel, whether the rebates at issue are capable of
restricting competition. Intel’s arguments alleging that the Commission lacked territorial
jurisdiction to penalise the abuse, and alleging procedural irregularities that affected its rights of
defence, were rejected by the Court.

3. Intel Corporation v. Commission Case T-286/09 RENV, ECLI:EU:T:2022:19

Full text here (very mahaba): https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX
%3A62009TJ0286%2801%29

May nakita me na supplementary paper, starting page 25: https://www.google.com/url?

sa=t&source=web&rct=j&url=https://repositorio.comillas.edu/xmlui/bitstream/handle/
11531/57736/TFG%2520-%2520Zurdo%2520Maroto%252C%2520Laura.pdf%3Fsequence
%3D1%26isAllowed
%3Dy&ved=2ahUKEwiutbuVzrH7AhWPT2wGHUXABXcQFnoECA8QAQ&usg=AOvVaw3d8qovMy15
D711T6xp59Qw

Ticker: AMD and Intel na lang yung nagmamarket ng x86 CPU para sa devices. Yung Intel gumawa ng
scheme para bultuhan yung bilhin ng mga manufacturers ng laptop/computer/devices sa kanya. Sabi ng
Court, although seemingly na may restrictive nature for competition yung conduct ng Intel, no showing
naman of that actual effect.

Parties:
a) Intel Corporation - US-based company engaged in the business of developing and manufacturing
CPUs or Central Processing Units and other data processing and communications devices.
b) Advance Micro Devices, Inc. - competition of Intel
c) Commission of the European Communities

Relevant provisions:
Article 102 TFEU: “Any abuse by one or more undertakings of a dominant position within the internal
market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far
as it may affect trade between Member States. Such abuse may, in particular, consist in:
a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading
conditions;
b) limiting production, markets or technical development to the prejudice of consumers;
c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby
placing them at a competitive disadvantage;
 d) making the conclusion of contracts subject to acceptance by the other parties of supplementary
obligations which, by their nature or according to commercial usage, have no connection with the
subject of such contracts.”

Article 54 of Agreement on the European Economic Area

Any abuse by one or more undertakings of a dominant position within the territory covered by this
Agreement or in a substantial part of it shall be prohibited as incompatible with the functioning of this
Agreement in so far as it may affect trade between Contracting Parties.

Such abuse may, in particular, consist in:

(a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading
conditions;
(b) limiting production, markets or technical development to the prejudice of consumers;
(c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby
placing them at a competitive disadvantage;
(d) making the conclusion of contracts subject to acceptance by the other parties of supplementary
obligations which, by their nature or according to commercial usage, have no connection with the
subject of such contracts.

Acronyms/terminologies:
● OEM - Original Equipment Manufacturers
● AMD - Advance Micro Devices, Inc.
● AEC test - as-efficient-competitor test tells if the conduct is prima facie abusive if it is capable of
excluding a competitor that is at least as efficient as the dominant industry
● MSH - Media-Saturn-Holding GmbH (European retailer of microelectronic devices and the
largest desktop computer distributor in Europe)

Facts: AMD filed a supplemental complaint with the Commissioner, so the latter immediately launched
investigations at four Intel Corporation locations: Germany, Spain, Italy, and United Kingdom as several
customers therein. AMD alleged that Intel made exclusionary marketing arrangements with a European
microelectronic device retailer (MSH) as against Original Equipment Manufacturers like Dell, Lenovo,
HP, IBM. When Intel was asked to file a Reply/Comment, it defaulted despite an extension. It prayed for
suspension of the procedure and for another 30 days to file its Answer. The General Court dismissed the
same, so Intel prayed to be allowed to file for Letter of Facts within 30 days but was denied. Nevertheless,
the General Court communicated the possibility of accepting delayed submissions.

Decision of the Commissioner contested in this case: The Commissioner found that Intel committed a single
and continuous infringement of Article 102 TFEU and of Article 54 of the Agreement on the European
Economic Area by implementing a strategy aimed at the foreclosure of its competitors, AMD, from the
market of x86 CPU microprocessors, which are manufactured by only two companies: Intel and AMD,
because others have already exited the market.

Basis of the Contested Decision

The Commissioner found that Intel granted to four OEMs, namely Dell, Lenovo, HP and NEC, rebates
which were conditional on those OEMs purchasing all or almost all of their x86 CPUs from Intel.
Similarly, Intel awarded payments to MSH which were conditional on MSH selling exclusively
computers containing Intel’s x86 CPUs. Thus resulting to:
a) economic analysis of the capability of the rebates to foreclose a hypothetical competitor as
efficient as Intel (as-efficient-competitor test; ‘the AEC test’), albeit not dominant. More precisely,
the analysis establishes at what price a competitor as efficient as Intel would have had to offer
CPUs in order to compensate an OEM for the loss of an Intel rebate
b) Intel’s conditional rebates and payments induced the loyalty of the key OEMs and of MSH. The
effects of these practices were complementary, in that they significantly diminished competitors’
ability to compete on the merits of their x86 CPUs. Intel’s anticompetitive conduct thereby
resulted in a reduction of consumer choice and in lower incentives to innovate.

Intel also awarded three OEMs, namely HP, Acer and Lenovo, payments which were conditional on
those OEMs postponing or canceling the launch of products with AMD x86 CPUs or placing restrictions
on the distribution of those products. Thus resulting in a conclusion that:
a) Intel’s conduct vis-à-vis the OEMs mentioned above and MSH constitutes an abuse under Article
102 TFEU, but that each of those individual abuses is also part of a single strategy aimed at
foreclosing AMD, Intel’s only significant competitor, from the market for x86 CPUs.

A part of the appealed judgment also includes the finding of the Commissioner that the level of the
rebates or payments granted by Intel to those OEMs or to MSH was de facto conditional on their
obtaining all of their x86 CPU requirements from Intel; next, that those rebates or payments fulfilled the
conditions of a relevant case-law for characterisation as abusive and, lastly, that those rebates or
payments had the effect of (i) restricting the freedom of the OEMs or of MSH to choose their sources of
x86 CPU supply and (ii) preventing other competitors from supplying those OEMs or MSH with x86
CPUs.

Intel filed before the General Court and the Court of Justice an action for annulment of that decision by
the Commissioner.

Issue: Whether the conditional rebates of Intel Corporation to OEMs and conditional payment schemes to
MSH constituted abuse of dominant position and anti-competition thus a violation of Art. 102 of TFEU.

Ruling: No. To determine whether there is capacity to anticompetitive foreclosure or infringement of Art.
102 TFEU, the Commissioner is required to analyse and assess the following:
a) first, the extent of the undertaking’s dominant position on the relevant market,
b) second, the share of the market covered by the contested practice,
c) third, the conditions and arrangements for granting the rebates in question, and
d) fourth, their duration and their amount; but it is also required to assess,
e) fifth, the possible existence of a strategy aiming to exclude competitors that are at least as
efficient as the dominant undertaking from the market.

In this case, an undertaking in a dominant position on the market may be characterised as a

restriction of competition, since, given its nature, it may be presumed to have restrictive effects on
competition, the fact remains that what is involved is, in that regard, a mere presumption and not a
per se infringement of Article 102 TFEU, which would relieve the Commission in all cases of the
obligation to examine whether there were anticompetitive effects. Where an undertaking in a
dominant position submits, during the administrative procedure, on the basis of supporting
evidence, that its conduct was not capable of restricting competition and, in particular, was not
capable of producing the alleged foreclosure effects, the Commission must analyse the foreclosure
capability of the system of rebates by applying the five criteria listed in paragraph 139 of the
judgment on the appeal. In addition, where the Commission has carried out an AEC test, that test is
one of the factors which the Commission must take into account in assessing whether the system of
rebates is capable of restricting competition.

In the present case, the applicant submitted, during the administrative procedure, on the basis of
supporting evidence, that the rebates at issue were not capable of producing the alleged foreclosure
effects. In the contested decision, the Commission carried out an AEC test and, in the light of the
results of that test, concluded that Intel’s rebates and payments at issue were capable of having or
likely to have anticompetitive foreclosure effects, since even an as-efficient competitor would have
been prevented from supplying Dell, HP, NEC and Lenovo for their x86 CPU requirements or from
having MSH sell computers equipped with its x86 CPUs.

However, it follows from all of the foregoing that, first, the AEC test carried out in the contested
decision is vitiated by errors and, second, as regards the criteria mentioned, the Commission did
not consider properly the criterion relating to the share of the market covered by the contested
practice and did not analyse correctly the duration of the rebates.

It should be noted, as regards the rebates granted to HP, that it has been held that the Commission
did not establish to the requisite legal standard its finding that, during the period from November
2002 to May 2005, the rebate which Intel granted to HP was capable of having or was likely to have
an anticompetitive foreclosure effect, since it has not demonstrated that those effects were present
for the period between 1 November 2002 and 31 September 2003. Even if it were necessary to infer
that the AEC test could be regarded as conclusive for part of the period from November 2002 to
May 2005, that could not demonstrate to the requisite legal standard the foreclosure effect of the
rebates granted to HP, since the Commission did not consider properly the criterion relating to the
share of the market covered by the contested practice and did not analyse correctly the duration of
the rebates.

Therefore, the Commission is not in a position to determine that the applicant’s rebates and
payments at issue were capable of having or likely to have anticompetitive effects and that they
therefore constituted an infringement of Article 102 TFEU.

Consequently, the Court considers that the grounds of the contested decision are not capable of
serving as a basis.

Furthermore, in reply to a question from the Court of 2 April 2012, seeking to ascertain, as regards a
possible adjustment to the amount of the fine should the contested decision be the subject of
annulment in part, the relative value of the infringements consisting of the exclusivity payments
compared with the infringements consisting of the naked restrictions, the Commission, in a reply
lodged on 8 May 2012, replied solely in relation to the gravity of the infringements, arguing that it
had assessed the conduct in question as a whole and had come to the view that those infringements
complemented and mutually reinforced one another.

Since the Court is not in a position to identify the amount of the fine relating solely to the naked
restrictions, Article 2 of the contested decision must therefore also be annulled.

The action is dismissed as to the remainder, having regard, in particular, to the findings in the initial
judgment which the Court accepts.

4. Willaware Products Corporation v. Jesichris Manufacturing Corporation 734 SCRA

238 (2014)

Jesichris Manufacturing Company the respondent filed this present complaint for damages for
unfair competition with prayer for permanent injunction to enjoin Willaware Products Corporation
the petitioner from manufacturing and distributing plastic-made automotive parts similar to
Jesichris Manufacturing Company. The respondent, alleged that it is a duly registered
partnership engaged in the manufacture and distribution of plastic and metal products.

Jesichris Manufacturing Company has been manufacturing in its Caloocan plant and distributing
throughout the Philippines plastic-made automotive parts. Willaware Products Corporation, on
the other hand, which is engaged in the manufacture and distribution of kitchenware items made
of plastic and metal has its office near that of the Jesichris Manufacturing Company.

Respondent further alleged that in view of the physical proximity of petitioner’s office to
respondent’s office, and in view of the fact that some of the respondent’s employees had
transferred to petitioner, petitioner had developed familiarity with respondent’s products,
especially its plastic-made automotive parts.

Respondent discovered that petitioner had been manufacturing and distributing the same
automotive parts with exactly similar design, same material and colors but was selling these
products at a lower price as respondent’s plastic-made automotive parts and to the same
customers.

Respondent alleged that it had originated the use of plastic in place of rubber in the
manufacture of automotive under chassis parts such as spring eye bushing, stabilizer bushing,
shock absorber bushing, center bearing cushions, among others.

Petitioner’s manufacture of the same automotive parts with plastic material was taken from
respondent’s idea of using plastic for automotive parts. Also, petitioner deliberately copied
respondent’s products all of which acts constitute unfair competition, is and are contrary to law,
morals, good customs and public policy and have caused [respondent] damages in terms of lost
and unrealized profits in the amount of 2,000,000 as of the date of respondent’s complaint.
 Issue: Whether or not there is unfair competition under human relations when the parties are
not competitors and there is actually no damage on the part of Jesichris?

Held: Yes. The instant case falls under Article 28 of the Civil Code on human relations, and not
unfair competition under Republic Act No. 8293, as the present suit is a damage suit and the
products are not covered by patent registration.

A fortiori, the existence of patent registration is immaterial in the present case. The concept of
“unfair competition” under Article 28 is very much broader than that covered by intellectual
property laws. Under the present article, which follows the extended concept of “unfair
competition” in American jurisdictions, the term covers even cases of discovery of trade secrets
of a competitor, bribery of his employees, misrepresentation of all kinds, interference with the
fulfillment of a competitor’s contracts, or any malicious interference with the latter’s business.

Article 28 of the Civil Code provides that “unfair competition in agricultural, commercial or
industrial enterprises or in labor through the use of force, intimidation, deceit,
machination or any other unjust, oppressive or high-handed method shall give rise to a
right of action by the person who thereby suffers damage.”

From the foregoing, it is clear that what is being sought to be prevented is not competition per
se but the use of unjust, oppressive or high-handed methods which may deprive others of a fair
chance to engage in business or to earn a living. Plainly, what the law prohibits is unfair
competition and not competition where the means used are fair and legitimate. In order to
qualify the competition as “unfair,” it must have two characteristics:

(1) it must involve an injury to a competitor or trade rival, and

(2) it must involve acts which are characterized as “contrary to good conscience,” or
“shocking to judicial sensibilities,” or otherwise unlawful; in the language of our law, these
include force, intimidation, deceit, machination or any other unjust, oppressive or high-
handed method.

The public injury or interest is a minor factor; the essence of the matter appears to be a private
wrong perpetrated by unconscionable means. It is evident that petitioner is engaged in unfair
competition as shown by his act of suddenly shifting his business from manufacturing
kitchenware to plastic-made automotive parts; his luring the employees of the respondent to
transfer to his employ and trying to discover the trade secrets of the respondent. Moreover,
when a person starts an opposing place of business, not for the sake of profit to himself, but
regardless of loss and for the sole purpose of driving his competitor out of business so that later
on he can take advantage of the effects of his malevolent purpose, he is guilty of wanton wrong.
As aptly observed by the court a quo, the testimony of petitioner’s witnesses indicate that it
acted in bad faith in competing with the business of respondent.

To illustrate, the Court observes that [petitioner] is engaged in the production of plastic
kitchenware previous to its manufacturing of plastic automotive spare parts, it engaged the
services of the then mold setter and maintenance operator of [respondent], De Guzman, while
he was employed by the latter. De Guzman was hired by [petitioner] in order to adjust its
machinery since quality plastic automotive spare parts were not being made. It baffles the Court
why [petitioner] cannot rely onits own mold setter and maintenance operator to remedy its
problem. [Petitioner’s] engagement of De Guzman indicates that it is banking on his experience
gained from working for [respondent].

Another point we observe is that Yabut, who used to be a warehouse and delivery man of
[respondent], was fired because he was blamed of spying in favor of [petitioner]. Despite this
accusation, he did not get angry. Later on, he applied for and was hired by [petitioner] for the
same position he occupied with [respondent]. These sequence of events relating to his
employment by [petitioner] is suspect too like the situation with De Guzman.

In sum, petitioner is guilty of unfair competition under Article 28 of the Civil Code.

5. Coca-Cola Bottlers, Phils., Inc. (CCBPI) v. Gomez 571 SCRA 18 (2008)

PRINCIPLE

The hoarding of a competitor's product containers is not punishable as unfair competition under
the Intellectual Property Code (IP Code, Republic Act No. 8293) that would entitle the aggrieved
party to a search warrant against the hoarder.

TICKER

Kinokolekta “daw” ng pepsi yung bote ng coke

FACTS

In an application for search warrant against Pepsi Cola Products Phils., Inc. (Pepsi), petitioner
Coca-Cola Bottlers, Phils., Inc. (CCBPI) alleged that Pepsi hoarded empty Coke bottles in bad
faith to discredit its business and to sabotage its operation in Bicol. This according to plaintiff is
an act constituting unfair competition under the Intellectual Property Code (IP Code).

MTC EJ Julian Ocampo of Naga City – issued a search warrant to seize Coke bottles at Pepsi's
Naga yard for violation of Section 168.3 (c) of the IP Code. With that, the local police seized
and brought to the custody of MTC thousands empty Coke bottles and hundreds of empty Pepsi
shells. Later, it filed with the OCP a complaint against Danilo E. Galicia and Quintin J. Gomez,
Jr., officers of Pepsi and herein respondents, for violation of Section 168.3 (c) in relation to
Section 170 of the IP Code.
In turn, the respondents filed motions for the return of their shells and to quash the search
warrant.

MTC – denied the twin motions and MR.

· It found that the Pepsi shells are prima facie evidence that the bottles were placed there by
the respondents.

This prompted the respondents to file a petition for certiorari under Rule 65 of the Revised Rules
of Court before the Regional Trial Court (RTC).

RTC – voided the warrant but found no grave abuse of discretion on the part of the issuing MTC
judge

· The search warrant lacked probable cause and there was no commission of the crime of
unfair competition

Hence, the present petition for review on certiorari under Rule 45 of the Rules of Court

CONTENTION

Petitioner insists that Section 168.3(c) of the IP Code does not limit the scope of protection on
the particular acts enumerated as it expands the meaning of unfair competition to include "other
acts contrary to good faith of a nature calculated to discredit the goods, business or services of
another." The inherent element of unfair competition is fraud or deceit, and that hoarding of
large quantities of a competitor's empty bottles is necessarily characterized by bad faith. It
claims that its Bicol bottling operation was prejudiced by the respondents' hoarding and
destruction of its empty bottles.

For its part, the respondents counter-argue inter alia that the hoarding of empty Coke bottles did
not cause actual or probable deception and confusion on the part of the general public. The
respondents also argue that the IP Code does not criminalize bottle hoarding, as the acts
penalized must always involve fraud and deceit. The hoarding does not make them liable for
unfair competition as there was no deception or fraud on the end-users.

ISSUE
Whether the act charged - alleged to be hoarding of empty Coke bottles - constitutes an offense
under Section 168.3 (c) of the IP Code. (NO)

RULING

The SC did not sustain petitioner’s expansive interpretation of Section 168.3 (c).

Section 168.3(c) states:

SECTION 168. Unfair Competition, Rights, Regulation and Remedies. — xxx

168.3. In particular, and without in any way limiting the scope of protection
against unfair competition, the following shall be deemed guilty of unfair
competition: xxx

(c) Any person who shall make any false statement in the course of trade
or who shall commit any other act contrary to good faith of a nature
calculated to discredit the goods, business or services of another. xxx

Under Section 168.3(c), a person shall be guilty of unfair competition "who shall commit any
other act contrary to good faith of a nature calculated to discredit the goods, business or
services of another."

According to jurisprudence, unfair competition has been defined as the passing off (or palming
off) or attempting to pass off upon the public the goods or business of one person as the goods
or business of another with the end and probable effect of deceiving the public. The true test of
unfair competition is whether the acts of the defendant are calculated to deceive the ordinary
buyer making his purchases under the ordinary conditions which prevail in the particular trade to
which the controversy relates. Corollary, the elements of unfair competition are: deception,
passing off and fraud upon the public.

As applied in this case, what is critical for purposes of Section 168.3 (c) is to determine if the
hoarding, as charged, "is of a nature calculated to discredit the goods, business or services" of
the petitioner. Here, the SC pronounced that hoarding or the collection of the petitioner's empty
bottles so that they can be withdrawn from circulation and thus impede the circulation of the
petitioner's bottled products is not tantamount to unfair competition.

The Supreme Court further noted that the petitioner made reference to the provision of the IP
Code. Yet, Section 168.2 of the IP Code refers to the specific instances of unfair competition.
Hence, the "hoarding" - as defined and charged by the petitioner

● does not fall within the coverage of the IP Code and of Section 168 in particular
 ● does not relate to any patent, trademark, trade name or service mark that the
respondents have invaded, intruded into or used without proper authority from the
petitioner
● nor are the respondents alleged to be fraudulently "passing off" their products or
services as those of the petitioner
● the respondents are not also alleged to be undertaking any representation or
misrepresentation that would confuse or tend to confuse the goods of the petitioner with
those of the respondents, or vice versa.

The SC found that what the petitioner alleges is an act foreign to the IP Code.

OTHER ISSUES

1. Other law that may have been violated by the respondents

Here, the SC ruled that hoarding for purposes of destruction is closer to what another law - R.A.
No. 623. The Act appears to have specific reference to a special type of registrants - the
manufacturers, bottlers or sellers of soda water, mineral or aerated waters, cider, milk, cream,
or other lawful beverages in bottles, boxes, casks, kegs, or barrels, and other similar containers
- who are given special protection with respect to the containers they use.

In this sense, it is in fact a law of specific coverage and application, compared with the general
terms and application of the IP Code. Thus, under its Section 2, it speaks specifically of unlawful
use of containers and even of the unlawfulness of their wanton destruction.

Unfortunately, the Act is not the law in issue in the present case and one that the parties did not
consider at all in the search warrant application.

2. Whether the application for search warrant effectively charged an offense that is a violation
of Section 168.3 (c) of the IP Code. (NO)

Since there is no crime to speak of, the search warrant does not even begin to fulfill the
stringent requirements and is therefore defective on its face.

There could not have been any probable cause to support the issuance of a search warrant
because no crime in the first place was effectively charged. Hence, the RTC correctly ruled that
the petitioner's search warrant should properly be quashed for the petitioner's failure to show
that the acts imputed to the respondents do not violate the cited offense.
FALLO

WHEREFORE, we hereby DENY the petition for lack of merit. Accordingly, we confirm that
Search Warrant No. 2001-01, issued by the Municipal Trial Court, Branch 1, Naga City, is NULL
and VOID. Costs against the petitioner.

6. Gokongwei v. Securities and Exchange Commission 89 SCRA 336

7. Agan, Jr. v. Philippine International Air Terminals Co., Inc. 402 SCRA 612
8. Tawang Multi-Purpose Cooperative vs La Trinidad Water District 646 SCRA 21
(2011)
9. Avon Cosmetics, Inc. v. Luna 511 SCRA 376
10. Epic Games, Inc. v. Apple Inc. No. 4:20-cv-05640-YGR (N.D. Cal. Sep. 10, 2021)
Topic: Exclusivity and undue restraint of trade
Principle: Central to antitrust cases is the appropriate determination of the relevant market.
FACTS:
Plaintiff Epic Games, Inc. sued Apple, Inc. alleging violations of federal and state antitrust laws
and California's unfair competition law based upon Apple's operation of its App Store. Broadly
speaking, Epic Games claimed that Apple is an antitrust monopolist over (i) Apple's own system
of distributing apps on Apple's own devices in the App Store and (ii) Apple's own system of
collecting payments and commissions of purchases made on Apple's own devices in the App
Store. Said differently, Epic Games alleged an antitrust market of one, that is, Apple's
"monopolistic" control over its own systems relative to the App Store. Apple disputed the
allegations.
ISSUE: Whether gaming is the relevant market for antitrust purposes
RULING:
NO. The court held that the relevant market was digital mobile gaming transactions, not gaming
generally and not Apple’s own internal operating systems related to its software application
store. The court held that Epic Games failed to show that Apple was an illegal monopolist under
the Sherman Act because, even though it enjoyed considerable market share of over 55% and
extraordinarily high profit margins, the record did not include evidence of other critical factors.
The court held that Apple was engaged in anticompetitive conduct under California's Unfair
Competition Law because its anti-steering provisions hid critical information from consumers
and illegally stifle consumer choice.
 11. Energy Regulatory Board v. Court of Appeals 357 SCRA 30 (2001)
12. Philippine Contractors Accreditation Board v. Manila Water Company, Inc., G.R.
No. 21759, March 10, 2020
13. United States v. Socony-Vacuum Oil 310 U.S. 150 (1940)
14. Toys “R” US, Inc. v. Federal Trade Commission 221 F.3d 928 (7th Cir. 2000)
15. National Collegiate Athletic Association v. Alston 141 S. Ct. 2141 (2021)
16. Red Line Transportation Co., Inc. vs Bachrach Motor Company, Inc. and Rural
Transit Company, Inc. G.R. No. L-45173, April 27, 1939
17. National Power Corporation v. Civil Service Commission G.R. No. 152093, January
24, 2012
18. American Needle, Inc. v. National Football League 130 S. Ct. 2201 (2010)
19. Sumal SL v Mercedes Benz Trucks España SL, Case C-882/19 ECLI:EU:C:2021:800
20. Avon Cosmetics vs Luna 511 SCRA 376 (2006)
21. Brown Shoe Co., Inc. v. United States 370 U.S. 294 (1962)
22. PCC v. Urban Deca Homes Manila Condominium Corporation and 8990 Holdings,
Inc., Commission Decision No. 01-E-001/2019 (PCC Website)
23. Distilleria Washington v. La Tondena Distillers, et al. G.R. No. 120961, October 2,
1997
24. "Hoffman-La Roche v. Commission Case 85/76 (13 February 1979) https://eur-
lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:61976CJ0085&from=EN
(Read pp. 508-509, 514-524, 535-547")
25. United Brands and United Brands Continentaal BV v Commission of the European
Communities, Judgment of the Court Case 27/76, ECLI:EU:C:1978:22, ¶ 35 (CJEU,
Feb. 14, 1978)

Facts:

The United Brands Company (UBC) is the largest group of world banana market and accounted
for 35% of world exports in 1974. Its European subsidiary, United Brands Continental B.V.
(UBCV) whose registered office is in Rotterdam, is responsible for coordinating banana sales in
all the member states of EEC except UK and Italy.

In 1974, several companied filed a complaint was against UBCV by Th. Olseen undertaking,
Valby (Denmark), Tropical Fruit Co., Jack Dolan Ltd undertakings (Dublin), and Banana
Importers undertaking, Dunadalk (Ireland). In March 1975, a procedure for infringement of
Article 86 of the EEC Treaty against UBCV was initiated.

In April 1975, the Commission notified UBCV that it was engaging in an abuse of a dominant
position in that it:

1. Required its distributor/ripeners not to sell bananas while still green

2. Charged its distributor/ripeners in the various Member States prices which differed
considerably, without any objective justification, for bananas of the same quality and even
through the conditions of the market were to all intent and purposes the same

3. Applied to its distributor/ripeners differing prices, the difference sometimes amounting to

138%
4. Refused to supply the Danish firm Olesen with bananas of the Chiquita brand on the
ground that this undertaking had taken part in an advertising campaign for bananas of a
competing brand

UBC argued that it does not occupy dominant position at the production and supply stages.
UBC lays stress on the fact that it is unable to control the number of offers, since more than half
the bananas sold are offered for sale by third parties; the proof that supply is sensitive lies in the
fact that small changes in this field bring about large price variations because of surplus
production capacity. As for the distribution chains UBC stated that most of the
distributor/ripeners which are its customers also obtain supplies from its competitors. UBC
argued that there is strong competition during the price war, when UBC sometimes came off
badly the existence of this competition rules out the possibility of any dominant position
according to the definition of such a position in the judgment. Furthermore, certain customers
like Scipio, or others operationg on a smaller scale are of such a size that the dominant position
of the vendor would inevitably be called into question. The effect of this, are to be relied on, its
UCB’s market share is declining.

As for the abuses for which it is blamed UBC concentrates on the argument put forward by the
Commission that it discriminated; this argument is based on a comparison of the f.o.r. prices ex
Bremerhaven and Rotterdam; UBC's first observation consists in pointing out that 53% of its
sales on the relevant market are to Scipio which buys f.o.b. and whose customers should be
excluded from the calculation; in the case of the remaining sales the prices charged were those
permitted by the market and therefore by the actual demand.

The complaint that UBC charged excessive prices must be examined in the light of documents
proving that it suffered serious losses at certain times. How can the price of highly perishable
goods sold at a relatively low price be excessive when the price alleged to be excessive is not
exactly comparable everywhere? UBC puts forward three specific arguments in answer to the
Commission's reasoning: the contents of the letter relating to the Irish market have been
contradicted by the final consolidated accounts and in this connexion the confidential annexes
to the application relating to the deficit recorded for this marked must be read after a thorough
examination of the situation; the difference between the prices of Chiquita and unbranded
bananas is due to a difference in their quality and unbranded bananas are only a by-product of
branded bananas, accounting for 15% of production (5% can be regarded as wastage) and this
conforms to the market pattern for all fresh fruits where differences of "grade" or "category" are
accepted; the difference between the prices of Chiquita and other bananas is according to the
period of time between 5 and 10% is due to a difference in quality.

The higher prices charged in certain sectors of the relevant market are caused by the operation
of the law of supply and demand which is all the more free because the banana market has not
been regulated "by a common organization of the market". UBC has already made an attempt at
rationalization by fixing a single price for each country and it endeavours to prove that this policy
has already led to losses being suffered on the banana market by the supplier and not by the
intermediaries. In any case the price reductions which the Commission wishes UBC to effect
would force it to sell bananas below competitors' prices which is unreasonable, since on a free
market the price must be fixed having regard to the market situation; the Commission has so
fully grasped how difficult it is to define the position which it has taken up that on this point it has
only made suggestions.

As far as the clause prohibiting the resale of green bananas is concerned UBC develops the
arguments put forward during the written procedure and stresses that there can be no
connexion between this clause and any excessive prices since it has shown that its prices are
the outcome of market forces.

Finally, in connexion with its refusal to sell to Olesen. UBC emphasizes that the Olesen affair
cannot be compared with the monopoly the existence of which it was possible to establish in the
Commercial Solvents case; furthermore it points out that it was not bound by any long term
contracts, that it experienced difficulties in its relations with Olesen and that its last dealings with
this firm before the breach were correct. Olesen moreover was not faced with insuperable
difficulties.

Issue:

1. Whether or not there exists dominant position

2. Whether or not there is an abuse of dominant position

Ruling:

1.

Court ruled that UBC has a dominant position on the relevant market.

UBC’s position on relevant market

Article 86 is an application of the general objective of the activities of the Community laid
down by Article 3 (f) of the Treaty: the institution of a system ensuring that competition in the
common market is not distorted.

This article prohibits any abuse by an undertaking of a dominant position in a substantial

part of the common market in so far as it may affect trade between Member States.

The dominant position referred to in this article relates to a position of economic strength
enjoyed by an undertaking which enables it to prevent effective competition being
maintained on the relevant market by giving it the power to behave to an appreciable extent
independently of its competitors, customers and ultimately of its consumers. In general, a
dominant position derives from a combination of several factors which, taken separately, are
not necessarily determinative.

In order to find out whether UBC is an undertaking in a dominant position on the relevant
market it is necessary first of all to examine its structure and then the situation on the said
market as far as competition is concerned.

It is advisable to examine in turn UBC's resources for and methods of producing, packaging,
transporting, selling and displaying its product. UBC is an undertaking vertically integrated to
a high degree. This integration is evident at each of the stages from the plantation to the
loading on wagons or lorries in the ports of delivery and after those stages, as far as
ripening and sale prices are concerned, UBC even extends its control to ripener/distributors
and wholesalers by setting up a complete network of agents. At the production stage UBC
owns large plantations in Central and South America. In so far as UBC's own production
does not meet its requirements it can obtain supplies without any difficulty from independent
planters since it is an established fact that unless circumstances are exceptional there is a
production surplus. Furthermore several independent producers have links with UBC
through contracts for the growing of bananas which have caused them to grow the varieties
of bananas which UBC has advised them to adopt. The effects of natural disasters which
could jeopardize supplies are greatly reduced by the fact that the plantations are spread
over a wide geographic area and by the selection of varieties not very susceptible to
diseases. This situation was born out by the way in which UBC was able to react to the
consequences of hurricane "Fifi" in 1974.

At the stage of packaging and presentation on its premises UBC has at its disposal
factories, manpower, plant and material which enable it to handle the goods independently.
The bananas are carried from the place of production to the port of shipment by its own
means of transport including railways.

Even if the object of the clause prohibiting the sale of green bananas was only stria quality
control, it in fact gives UBC absolute control of all trade in its goods so long as they are
marketabale wholesale, that is to say before the ripening process beg. This general quality
control of a homogeneous product makes the advertising of the brand name effective. Since
1967 UBC has based its general policy in the relevant market on the quality of its Chiquita
brand banana. There is no doubt that this policy gives UBC control over the transformation
of the product into bananas for consumption even though most of this product no longer
belongs to it. This policy has been based on a thorough reorganization of the arrangements
for production, packaging, carriage, ripening (new plant with ventilation and a cooling
system) and sale (a network of agents).

It has thus attained a privileged position by making Chiquita the premier banana brand
name on the relevant market with the result that the distributor cannot afford not to offer it to
the consumer.

Competition

UBC is the largest banana group having accounted in 1974 for 35% of all banana exports on
the world market. This percentage does not however permit the conclusion that UBC
automatically controls the market. It must be determined having regard to the strength and
number of the competitors. It is necessary first of all to establish that on the whole of the
relevant market the said percentage represents grosso modo a share several times. greater
than that of its competitor Castle and Cooke which is the best placed of all the competitors,
the others coming far behind. This fact together with the others to which attention has
already been drawn may be regarded as a factor which affords evidence of UBC's
preponderant strength.

However an undertaking does not have to have eliminated all opportunity for competition in
order to be in a dominant position. In this case there was in fact a very lively competitive
struggle on several occasions in 1973 as Castle and Cooke had mounted a large-scale
advertising and promotion campaign with price rebates on the Danish and German markets.
At the same time Alba cut prices and offered promotional material.
 Furthermore if UBC's position on each of the national markets concerned is considered it
emerges that, execpt in Ireland, it sells direct and also, as far as concerns Germany,
indirectly through Scipio, almost twice as many bananas as the best placed competitor and
that there is no appreciable fall in its sales figures even when new competitors appear on
these markets. UBC's economic strength has thus enabled it to adopt a flexible overall
strategy directed against new competitors establishing themselves on the whole of the
relevant market. UBC's economic strength has thus enabled it to adopt a flexible overall
strategy directed against new competitors establishing themselves on the whole of the
relevant market.

The particular barriers to competitors entering the market are the exceptionally large capital
investments required for the creation and running of banana plantations, the need to
increase sources of supply in order to avoid the effects of fruit diseases and bad weather
(hurricanes, floods), the introduction of an essential system of logistics which the distribution
of a very perishable product makes necessary, economies of scale from which newcomers
to the market cannot derive any immediate benefit and the actual cost of entry made up inter
alia of all the general expenses incurred in penetrating the market such as the setting up of
an adequate commercial network, the mounting of very large-scale advertising campaigns,
all those financial risks, the costs of which are irrecoverable if the attempt fails.

The cumulative effect of all the advantages enjoyed by UBC thus ensures that is has a
dominant position on the relevant market.

2.

Court ruled that there was an abuse of a dominant position.

Consequently the policy of differing prices enabling UBC to apply dissimilar conditions to
equivalent transactions with other trading parties, thereby placing them at a competitive
disadvantage, was an abuse of a dominant position.

Refer to:
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:61976CJ0027&from=EN
super haba
 26. United States v. E. I. du Pont de Nemours & Co. 351 US 377 (1956)
27. Smithkline Corporation v. Eli Lilly and Company 575 F.2d 1056 (3d Cir. 1978)
28. Brooke Group Ltd. v. Brown and Williamson Tobacco Corp. 509 U.S. 209, 225
(1993)
29. IMS Health GmbH & Co. OHG v. NDC Health GmbH & Co. KG Judgment of the
Court, Case C-418/01, ECLI:EU:C:2004:257, ¶ 28 (CJEU, April 29, 2004)
30. "European Commission Decision of 4.5.2017 in Case AT.40153 – E-book MFNs and
related matters -
http://ec.europa.eu/competition/antitrust/cases/dec_docs/40153/40153_4392_3.pdf
"
31. Leegin Creative Leather Products, Inc. v. PSKS, Inc., 551 US 877 (2007)
32. In the Matter of the Proposed Acquisition by Chelsea Logistics Holdings
Corporation of Shares in KGLI-NM Holdings, Inc. PCC Case No. M-2018-002; MAO
Case No. M-39-2017
33. "In the Matter of the Proposed Acquisition by International Container Terminal
Services, Inc. of Shares in the Manila North Harbor Port, Inc., PCC Decision No.
09-M-2018-034"
34. PCC Statement of Concerns (Executive Summary) Acquisition by Grab Holdings,
Inc. and MyTaxi.PH Inc., of Assets of Uber B.V. and Uber Systems, Inc. (M-2018-01)
TOPIC: Acquisition; Control
PRINCIPLE
FACTS
ISSUE
RULING

35. "In the matter of Udenna Corporation and KGL Investment Cooperatief U.A.’s
alleged violation of Compulsory Notification Requirements, PCC Decision in PCC
Case No. M-2017-001"
36. Gokongwei v. Securities and Exchange Commission 89 SCRA 336