PHILIPPINE COMPETITION ACT

- The Constitution does not prohibit the operation of monopolies per se. What is
prohibited by the law are monopolies or combinations in restraint of trade or unfair
competition.
- Combination in restraint of trade refers to the means while monopoly refers to the end.

 SCOPE OF APPLICATION
o Enforceable against any person or entity engaged in Trade, industry and
commerce in the RP
o Applicable to international trade having direct, substantial and reasonably
foreseeable effects in trade, industry, or commerce in the RP, including those
that result from acts done outside the RP

o DOES NOT APPLY to combinations or activities of workers or employees nor to

agreements or arrangements with their employers when such combi, activities,
agreements, or arrangements are designed solely to facilitate collective
bargaining as to conditions of employment

 PROHIBITED ACTS / VIOLATIONS OF PCA (Which could be the subject of competitive

investigation)*** [M.A.D = also called as the three pillars]
1. ANTI-COMPETITVE AGREEMENTS (SEC14)
o Agreements between business players that harm competition by preventing,
restricting, or distorting competition. Best example is cartel.
o Examples are price-rigging (agreement to pricing), market sharing (local
monopolies) and bid rigging (coordination of bids)

2. ABUSE OF DOMINANT POSITION (SEC15)

o Practice in which a company uses its substantial market power to restrict
competition
o Examples are exploitative abuse (setting excessive prices or unfair conditions)
and exclusionary abuse (predatory pricing, exclusive dealings)

3. ANTI-COMPETITIVE MERGERS AND ACQUISITIONS (SEC20)

o Merger refers to the joining of 2 or more entities into an existing entity or to
form a new entity (merger in generic sense)
 o Acquisition refers to the purchase of securities or assets, through contract or
other means, for the purpose of obtaining control by:
1. one entity of the whole or part of another
2. 2 or more entities over another or
3. One or more entities over one or more entities

o Thresholds for PCC Memorandum Circular 19-001, wherein M&A shall be

notified to PCC:
P5.6B size of party
P2.2B size of transaction

Meaning if the M&A is small time or does not reach the threshold
amounts, no need for notification with PCC.

 RELEVANT MARKET. The market in which a particular good or service is sold and which
is a combination of the:
o relevant product market. All goods and services which are regarded as
interchangeable or substitutable by the consumer, by reason of their
characteristics, prices or intended use such as coffee vs tea.

o relevant geographic market. Territory

 THE TEST FOR VIOLATION OF THE PCA IS WHETHER THE AGREEMENT OR ACT HAS THE
OBJECT OR EFFECT OF “SUBSTANTIALLY PREVENTING, RESTRICTING, OR LESSENING
COMPETITION”

 WHAT ARE NOTIFICATION VIOLATIONS UNDER PCA? (SEC17) (in relation to threshold
above) [BARRABLE]

1. NON-NOTIFICATION OF CONSUMMATED MERGER

2. GUN-JUMPING. Notified transaction is consummated prior to the end of the 30-
day waiting period or clearance of the transaction (excited)
3. LATE NOTIFICATION. Parties notified PCC beyond the 30-day period from the
signing of the definitive agreement, but parties have not consummated the
transaction.
WHAT IS DAWN RAID? [ BARRABLE ]
- AN unannounced search of business premises, land and vehicles of entites where the
PCC reasonably suspects that relevant books, tax records or other documents which
relate to any matter relevant to the investigation are kept.
- Provide direct access to documentary evidence that can establish to a conspiracy or
other pieces of evidence that may support overt acts of anti-competitive agreements or
conduct.
- This is conducted by virtue of an inspection order issued by RTC. The PCC has no power
to issue inspection orders.