WHAT ARE THE POWERS AND FUNCTIONS OF THE
PCC?
In this microsite, the Philippine Competition Commission
(PCC) has assembled information that would better equip law
graduates or bar examinees with the knowledge of Republic
Act No. 10667, or the Philippine Competition Act (PCA), and
help prepare them for the Bar examinations. As such, the
information is organized using the outline contained in
Supreme Court Bar Bulletin No. 7, series 2020.
SCOPE AND APPLICATION OF THE
PHILIPPINE COMPETITION ACT
WHAT IS THE PHILIPPINE COMPETITION ACT?
The PCA is the primary law in the Philippines enacted to
promote and protect market competition. The law defines,
prohibits, and penalizes anti-competitive practices, with the
aim of enhancing economic efficiency and promoting free and
fair competition in trade, industry, and all commercial
economic activities. Its key prohibitions include entering into
anti-competitive agreements, abusing a dominant market
position, and forming anti-competitive mergers and
acquisitions (M&As).
For the declaration of policy, see PCA Chapter 1, Section
2. For the definition of terms used in the law, see Section 4
WHO AND WHAT ARE COVERED BY THE
PHILIPPINE COMPETITION ACT?
The PCA covers any person or entity engaged in trade,
industry, and commerce in the Philippines. The law also
applies to international trade that may impact trade, industry,
and commerce in the country. The law, however, does not
apply to collective bargaining agreements or arrangements
between workers and employers and activities to facilitate
collective bargaining agreements in respect of conditions of
employment.
For more information, see PCA Chapter 1, Section
3 and Chapter 8, Section 48
POWERS AND FUNCTIONS OF THE
PHILIPPINE COMPETITION COMMISSION
WHAT IS THE PHILIPPINE COMPETITION
COMMISSION (PCC)?
The PCC is an independent quasi-judicial government agency
mandated to implement the national competition policy and
enforce the PCA. It has original and primary jurisdiction over
the enforcement and implementation of the PCA and its IRR.
The OFC under the Department of Justice (DOJ-OFC) shall
only conduct preliminary investigation and undertake
prosecution of all criminal offenses arising under the PCA and
other competition-related laws.
For more information, see PCA Chapter 2, Sections 5 &
13 and Chapter 7, Section 31
As the Philippines’ antitrust authority, the PCC is mandated to
exercise the following powers and functions, among others:
(a) Conduct inquiry, investigate, and hear and decide on cases
involving any violation of this Act and other existing
competition laws:
a. motu proprio
b. upon receipt of a verified complaint from an
interested party
c. upon referral by the concerned regulatory agency,
and institute the appropriate civil or criminal
proceedings;
(b) Review proposed mergers and acquisitions, determine
thresholds for notification, determine the requirements and
procedures for notification, and upon exercise of its powers to
review, prohibit mergers and acquisitions that will
substantially prevent, restrict, or lessen competition in the
relevant market;
(c) Monitor and undertake consultation with stakeholders and
affected agencies for the purpose of understanding market
behavior;
(d) Upon finding, based on substantial evidence, that an entity
has entered into an anti-competitive agreement or has abused
its dominant position after due notice and hearing, stop or
redress the same, by applying remedies, such as, but not
limited to, issuance of injunctions, requirement of divestment,
and disgorgement of excess profits under such reasonable
parameters that shall be prescribed by the rules and regulations
implementing this Act;
(e) Conduct administrative proceedings, impose sanctions,
fines or penalties for any noncompliance with or breach of this
Act and its implementing rules and regulations (IRR) and
punish for contempt;
(f) Issue subpoena duces tecum and subpoena ad
testificandum to require the production of books, records, or
other documents or data which relate to any matter relevant to
the investigation and personal appearance before the
Commission, summon witnesses, administer oaths, and issue
interim orders such as show cause orders and cease and desist
orders after due notice and hearing in accordance with the
rules and regulations implementing this Act;
(g) Upon order of the court, undertake inspections of business
premises and other offices, land and vehicles, as used by the
entity, where it reasonably suspects that relevant books, tax
records, or other documents which relate to any matter
relevant to the investigation are kept, in order to prevent the
removal, concealment, tampering with, or destruction of the
books, records, or other documents;
(h) Issue adjustment or divestiture orders including orders for
corporate reorganization or divestment in the manner and
under such terms and conditions as may be prescribed in the
rules and regulations implementing this Act. Adjustment or
divestiture orders, which are structural remedies, should only
be imposed:
(1) Where there is no equally effective behavioral remedy; or
(2) Where any equally effective behavioral remedy would be
more burdensome for the enterprise concerned than the
structural remedy. Changes to the structure of an enterprise as
it existed before the infringement was committed would only
be proportionate to the substantial risk of a lasting or repeated
infringement that derives from the very structure of the
enterprise;
(i) Deputize any and all enforcement agencies of the
government or enlist the aid and support of any private
institution, corporation, entity or association, in the
implementation of its powers and functions;
(j) Monitor compliance by the person or entities concerned
with the cease and desist order or consent judgment;
(k) Issue advisory opinions and guidelines on competition
matters for the effective enforcement of this Act and submit
annual and special reports to Congress, including proposed
legislation for the regulation of commerce, trade, or industry;
(l) Monitor and analyze the practice of competition in markets
that affect the Philippine economy; implement and oversee
measures to promote transparency and accountability; and
ensure that prohibitions and requirements of competition laws
are adhered to;
(m) Conduct, publish, and disseminate studies and reports on
anti-competitive conduct and agreements to inform and guide
the industry and consumers;
(n) Intervene or participate in administrative and regulatory
proceedings requiring consideration of the provisions of this
Act that are initiated by government agencies such as the
Securities and Exchange Commission, the Energy Regulatory
Commission and the National Telecommunications
Commission;
(o) Assist the National Economic and Development Authority,
in consultation with relevant agencies and sectors, in the
preparation and formulation of a national competition policy;
(p) Act as the official representative of the Philippine
government in international competition matters;
(q) Promote capacity building and the sharing of best practices
with other competition-related bodies;
(r) Advocate pro-competitive policies of the government by:
(1) Reviewing economic and administrative regulations, motu
proprio or upon request, as to whether or not they adversely
affect relevant market competition, and advising the concerned
agencies against such regulations; and
(2) Advising the Executive Branch on the competitive
implications of government actions, policies and programs;
and
(s) Charging reasonable fees to defray the administrative cost
of the services rendered.
While it has original and primary jurisdiction in the
enforcement and regulation of all competition-related issues,
the PCC works with relevant sector regulators on matters
where their expertise and knowledge on the sector are critical.
For more information, see PCA Chapter 2, Section
12 and Chapter 7, Section 32
PROHIBITED ACTS: ANTI-COMPETITIVE
AGREEMENTS
WHAT ARE ANTI-COMPETITIVE AGREEMENTS?
Anti-competitive agreements include agreements between or
among competitors that substantially prevent, restrict or lessen
competition. Such agreements may be in the form of a
contract, arrangement, understanding, collective
recommendation, or concerted action, whether formal or
informal, explicit or tacit, written or oral.
Also known as cartels, anti-competitive agreements between
or among competitors involve collusive conduct to fix prices,
rig bids, limit output, or allocate the market.
Under the PCA, there are anti-competitive agreements that
are per se prohibited (Section 14[a]) and there are agreements
that are prohibited for having an anti-competitive object or
effect (Section 14[b] and [c]).
For more information, see PCA Chapter 3, Section 14
WHAT ARE PER SE VIOLATIONS?
These anti-competitive agreements that are inherently illegal
and require no further inquiry into their actual effect on the
market or the intentions of the parties who engaged in the
illegal act or agreement. The Philippine Competition Act
classifies price fixing and bid rigging as per se violations.
See PCA Chapter 3, Section 14 (a)
PRICE FIXING
Price fixing involves restricting competition as to price, or
components thereof, or other terms of trade. This happens
when competitors agree on the price of goods or services,
rather than independently setting their respective prices.
Illustrative case:
In 2007, the European Commission fined three Dutch brewers
for price-fixing of beer in the Netherlands. Heineken, Grolsch,
and Bavaria paid a total of 273.7 million Euros while a fourth
brewer, InBev, did not receive a fine as it participated in the
Commission’s leniency program.
The Commission found that between 1996 and 1999 at least,
the four brewers held numerous unofficial meetings, during
which they coordinated prices and price increases of beer in
the Netherlands. Evidence adduced, including handwritten
notes, confirmed the dates and places of these unofficial
meetings. The companies were determined to have
coordinated prices for both “on-trade” (consumption on the
premises, such as bars and pubs) and “off-trade” (sale through
supermarkets and the like) segments of the beer market in the
Netherlands. They also coordinated occasionally on non-
pricing aspects, such as conditions offered to individual
customers in the on-trade segment. The Commission further
found evidence that the brewers were aware that their actions
were illegal, as they tried to conceal their activity through the
use of code names and hotels/restaurants as venues for their
meetings.
For more information, see Case COMP/B/37.766 — Dutch
beer market
BID RIGGING
Bid-rigging involves fixing prices at an auction or any form of
bidding, including cover bidding, bid suppression, bid
rotation, and market allocation, among others. Bid-rigging
usually occurs when parties participating in a tender
coordinate their bids rather than submit independent proposals.
Illustrative case:
In 2013, the Ontario Superior Court of Justice fined a Japanese
automobile parts company CAD5 million for conspiring with
other suppliers to rig the bids for the supply of parts to the
2001 and 2006 Honda Civic models fabricated in Canada.
Furukawa Electric Co., Ltd., a supplier of electrical boxes (i.e.,
fuse boxes, relay boxes, and junction blocks) used in motor
vehicles, was among the pre-qualified suppliers of Honda
Canada. When Honda called for supplier quotes, Furukawa
coordinated with its Japan-based competitors regarding their
price quotations or bids. These meetings resulted in an
arrangement whereby Furukawa would earn the contract for
the tender. Consequently, Furukuwa was awarded the contract
to supply the automobile parts of the 2001 and 2006 models of
the Honda Civic. From 2000 to 2005, the estimated sales
amounted to CAD16.5 million. The Competition Bureau
learned of the international bid-rigging conspiracy through its
Leniency Program, where Furukawa offered to help the
Bureau in the investigation of the case, which started in 2009.
For more information, see Canada’s Competition Bureau.
April 4, 2013. CAD 5 million Fine for a Japanese Supplier of
Motor Vehicle Components. Court File No. 13086
WHAT ARE NOT PER SE VIOLATIONS?
Not per se violations are other anti-competitive agreements
prohibited by the law which have the object or effect of
substantially preventing, restricting, or lessening competition.
Since these agreements are not per se illegal, the PCC needs to
conduct inquiries to determine whether they restrict
competition and violate the PCA.
See PCA Chapter 3, Section 14 (b) and (c)
SUPPLY RESTRICTION
Supply restriction is an agreement by two or more competitors
which sets or limits production levels and create an artificial
supply shortage, thereby raising prices. Similar forms of anti-
competitive agreements include restrictions in markets,
technical development, or investment.
Illustrative case:
In 2010, the Builders’ Association of India filed a complaint
against the Cement Manufacturers’ Association (CMA) and
the cement manufacturing companies involved for engaging in
a cartel arrangement. Competitors were alleged to have
discussed various confidential business information through
the CMA, such as prices and quantity of production, which led
to an agreement of controlling the supply of cement products
in the region. After investigation, ten cement manufacturing
companies were found guilty of artificially restricting their
output which led to price hikes of cement products across
India. The Competition Commission of India found the parties
guilty of breaching the 2002 Competition Act of India and
imposed penalties amounting to INR63.17 billion.
For more information, see Competition Commission of India.
August 31, 2016. CCI imposes penalties upon cement
companies for cartelization. Case No. 29/2010.
MARKET SHARING
Market sharing is a collusive agreement by two or more
competitors which divides or allocates the market. Market
sharing not only includes territories, but also customers,
volume of sales or purchases, and type of goods or services,
among other considerations.
Illustrative case:
In 2011, two pharmaceutical companies admitted to dividing
the market between them in providing prescription medicines
to care homes in England. From May to November 2011,
Tomms Pharmacy, a trading company under the subsidiaries
of Hamsard 3149, and Lloyds Pharmacy Limited, agreed to
distribute medical products in their pre-assigned markets only,
resulting in limited choices of prescription medicines for
consumers. The Office of Fair Trading (OFT) found that the
arrangement breached the 1998 Competition Act of England.
The OFT fined Hamsard the amount of GBP387,856;
however, under its Leniency Program, OFT granted 100
percent reduction to Lloyds for disclosing the agreement.
For more information, see Decision of the Office of Fair
Trading. Market sharing agreement and/or concerted practice
in relation to the supply of prescription medicines to care
homes in England. March 20, 2014. Case CE/9627/12.
WHAT ARE THE EXCEPTIONS TO THE COVERAGE
OF ANTI-COMPETITIVE AGREEMENTS?
Agreements not falling under Section 14(a) and 14(b) of the
PCA that have an anti-competitive object or effect, but
nevertheless contribute to improving production or distribution
of goods or services within the relevant market, or promoting
technical and economic progress while allowing consumers a
fair share of the resulting benefit may not necessarily be
considered anti-competitive. (Note: This only applies to
Section 14 (c) of the PCA).
For more information, see PCA Chapter 2, Section 14
PROHIBITED ACTS: ABUSE OF DOMINANT
POSITION
It is not illegal to have a dominant position in the market;
however, it is illegal to abuse one’s dominance.
HOW TO DETERMINE CONTROL OR DOMINANCE
OF MARKET?
In determining the control of an entity, the Commission may
consider the following:
Control is presumed to exist when the parent owns directly or
indirectly, through subsidiaries, more than one half (1/2) of the
voting power of an entity, unless in exceptional circumstances,
it can clearly be demonstrated that such ownership does not
constitute control. Control also exists even when an entity
owns one half (1/2) or less of the voting power of another
entity when:
(a) There is power over more than one half (1/2) of the voting
rights by virtue of an agreement with investors;
(b) There is power to direct or govern the financial and
operating policies of the entity under a statute or agreement;
(c) There is power to appoint or remove the majority of the
members of the board of directors or equivalent governing
body;
(d) There is power to cast the majority votes at meetings of the
board of directors or equivalent governing body;
(e) There exists ownership over or the right to use all or a
significant part of the assets of the entity;
(f) There exist rights or contracts which confer decisive
influence on the decisions of the entity
For more information, see PCA Chapter 4, Section 25
WHEN CAN A BUSINESS BE CONSIDERED
DOMINANT IN THE MARKET?
A dominant position refers to a position of economic strength
that an entity or entities hold which makes it capable of
controlling the relevant market independently from any or a
combination of the following: competitors, customers,
suppliers, or consumers.
For more information, see PCA Chapter 1, Section 4
Dominance can exist either on the part of one firm (single
dominance) or of two or more firms (collective dominance). In
determining whether a business has a market dominant
position, the Commission will consider the following factors:
 The share of the entity in the relevant market and
whether it can fix prices on its own or restrict supply
in the relevant market;
 The competitors’ shares in the relevant market;
 Existence of barriers to entry and the elements which
could change both the barriers and the supply from
competitors;
 Existence and power of competitors;
 Credible threat of future expansion by competitors or
entry by potential competitors;
 Market exit of competitors;
 Bargaining strength of customers;
 Possibility of access by competitors or other
enterprises to its sources of inputs;
 Power of its customers to switch to other goods or
services;
 Recent market behavior;
 Ownership, possession, or control of infrastructure
which are not easily duplicated;
 Technological advantages or superiority, compared to
other competitors;
 Access to capital markets or financial resources;
 Economies of scale and scope;
 Vertical integration; and
 Existence of a highly developed distribution and sales
network.
For more information, see PCA Chapter 1, Section 4(g); PCA
Chapter 5, Section 27; and PCA Implementing Rules and
Regulations, Rule 8
WHEN CAN A BUSINESS BE HELD LIABLE FOR
ABUSING ITS MARKET DOMINANCE?
The PCA prohibits entities from abusing their dominant
position in the relevant market by engaging in conduct that
would substantially prevent, restrict, or lessen competition.
Examples of conduct constituting abuse of dominant position:
 Selling goods or services below cost to drive
competition out of the market;
 Imposing barriers to entry or committing acts that
prevent competitors from growing within the market;
 Making a transaction subject to acceptance by other
parties who have no connection to the transaction;
 Setting prices or other terms or conditions that
discriminate unreasonably between customers or
sellers of the same goods or services;
 Imposing restrictions on the lease or contract for sale
or trade of goods or services concerning where, to
whom, or in what form a good or service may be sold
or traded;
 Making supply of particular goods or services
dependent upon the purchase of other goods or
services from the supplier;
 Imposing unfairly low purchase prices for the goods
or services of marginalized service providers and
producers, such as farmers, fisherfolk, and micro,
small, and medium enterprises (MSMEs);
 Imposing unfair purchase or selling price on
competitors, customers, suppliers or consumers; and
 Limiting production, markets or technical
development to the prejudice of consumers.
For more information, see PCA Chapter 3, Section 15
Illustrative case:
In a Statement of Objections filed in March 2019, the PCC
Enforcement Office charged Urban Deca Homes (UDH)
Manila Condominium Corporation and 8990 Holdings, Inc.
with abuse of dominance. This was due to UDH’s imposition
of a sole internet service provider (ISP) on its residents,
preventing them from availing themselves of alternative fixed-
line ISPs. The Enforcement Office, the PCC’s investigative
and prosecutorial arm, found that UDH’s exclusive partnership
with Itech Rar Solutions prevented the entry and access of
other providers in UDH Manila. It also found that UDH
Manila’s property manager blocked other ISPs from installing
fixed-line internet on units and from marketing their services
to interested residents. The probe was triggered by numerous
complaints posted by unit owners and tenants of UDH Manila
in PCC’s Facebook account. The complainants claimed they
were prevented from getting other ISPs even if the in-house
Fiber to Deca Homes service was slow, expensive, and
unreliable.
For more information, see PCC breaks condo-internet
exclusivity deal
WHAT ARE THE EXCEPTIONS TO THE COVERAGE
OF ABUSE OF DOMINANCE?
Any conduct which contributes to improving production or
distribution of goods or services within the relevant market, or
promoting technical and economic progress while allowing
consumers a fair share of the resulting benefit may not
necessarily be considered an abuse of dominant position.
Additionally, the acquisition, maintenance, and increase of
market share does not violate the PCA if:
 It is acquired through legitimate means, such as
having superior skills, rendering superior service,
producing or distributing better-quality products,
 having business acumen, and using and enjoying
intellectual property rights; and
 It does not substantially prevent, restrict, or lessen
competition in the market.
For more information, see PCA Chapter 3, Section 15 (a), (d),
(e) and (i)
PROHIBITED ACTS: ANTI-COMPETITIVE
MERGERS & ACQUISITIONS
WHAT ARE PROHIBITED MERGERS AND
ACQUISITIONS?
Anti-competitive mergers and acquisitions (M&As) refer to
transactions that substantially lessen, restrict, or prevent
competition in the relevant market as determined by the PCC
in the exercise of its power to review such transactions.
See PCA Chapter 4, Section 20
Illustrative case:
The PCC blocked the merger of two sugar millers in Southern
Luzon—Universal Robina Corporation (URC) and Central
Azucarera Don Pedro, Inc. (CADPI)-Roxas Holdings, Inc.
(RHI). In a Commission decision issued in January 2019, the
PCC found that URC’s buyout of its only competitor in the
sugarcane milling services market leads to a monopoly in
Southern Luzon. The PCC’s Mergers and Acquisitions Office
earlier raised competition concerns on URC’s proposed
acquisition of CADPI and RHI assets. In response, the
merging parties submitted their proposed voluntary
commitments, but failed to sufficiently address competition
concerns raised by PCC. URC’s sugar mill is in Balayan while
CADPI-RHI’s milling facilities are in Nasugbu. While both
mill operators are in Batangas, the monopoly to be created by
the merger will substantially lessen competition in the sugar
milling services market not only in Batangas, but also in
Cavite, Laguna, and Quezon. The PCC’s market investigation
earlier showed that farmers stand to lose the benefits of
competition due to the merger, especially in terms of planters’
cut in sharing agreements, sugar recovery rates, and
incentives.
For more information, see Sugar milling merger-to-monopoly
deal blocked
WHAT ARE THE EXCEPTIONS TO THE
PROHIBITION OF ANTI-COMPETITIVE M&AS?
M&A agreements which substantially prevent, restrict, or
lessen competition may be allowed if the parties are able to
prove that (a) the concentration has brought about or is likely
to bring about gains in efficiencies that are greater than the
effects of any limitation on competition that result or are likely
to result from the merger or acquisition agreement; or (b) a
party is faced with actual or imminent financial failure and the
agreement represents the least anti-competitive arrangement
among the known alternative uses of its assets.
For more information, see PCA Chapter 4, Sections 21-22
Illustrative case:
In 2017, Alipay Singapore Holding Pte. (Alipay) proposed to
acquire Globe Fintech Innovations, Inc. (Mynt). After its
Phase 1 review, the PCC flagged a potential competition
concern in the non-bank electronic money market. However,
following a Phase 2 review, Mynt was found to have no
incentive to block entry or expansion of other players in the
market. Also, other payment options (e.g., cash) limit the
market power which Mynt may exercise. Alipay is owned by
Ant Financial Group, which provides a digital platform for
financial services. Mynt operates G-Xchange Inc., which
handles the “G-cash,” a micropayment service making the
mobile phone into a virtual wallet; and Fuse Lending Inc,
which is a tech-based lending company.
For more information, see Efficiency gains of digital finance
acquisition
COVERED TRANSACTIONS
WHAT ARE THE THRESHOLDS FOR COMPULSORY
NOTIFICATION OF MERGERS AND ACQUISITIONS?
Parties to a merger or acquisition agreement where the size of
transaction and size of person/party exceed the thresholds set
annually by the PCC are required to notify the Commission of
such agreement before consummating the transaction. The
annual adjustment of thresholds for compulsory notification is
based on the Philippine Statistics Authority’s official estimate
of the nominal gross domestic product (GDP) of the previous
year.
In September 2020, the values of the size-of-party and size-of-
transaction thresholds, which were then set at PHP 6 billion
and PHP 2.4 billion, respectively, were further adjusted
pursuant to Republic Act No. 11494 or the Bayanihan to
Recover as One Act. Section 4(eee) of the said law exempts
mergers or acquisitions from compulsory notification with
transaction values below PHP 50 billion if entered into within
two (2) years from the effectivity of the law on 15 September
2020. The said section was enacted as part of the
government’s economic recovery measures, and for the stated
purpose of “promoting business continuity and capacity
building.”
For more information, see PCA Chapter 4, Sections 17 and
19 (a); PCC Rules of Merger Procedure; PCC Memorandum
Circular No 18-001; and PCC Commission Resolution No. 02-
2020
WHO IS/ARE THE NOTIFYING ENTITY/ENTITIES?
Under the Implementing Rules and Regulations of the PCA
(IRR), the notifying entity/entities refer to the following
parties:
 The acquiring and acquired parties to the notifiable
M&A and their ultimate parent entities.
 In the formation of a joint venture (other than in
connection with a merger or consolidation), the
contributing entities shall be deemed acquiring
entities, and the joint venture shall be deemed the
acquired entity.
See PCA Implementing Rules and Regulations, Rule 4,
Section 2
IF A TRANSACTION IS NOT SUBJECT TO
COMPULSORY NOTIFICATION, CAN THE PCC
STILL REVIEW IT?
The PCC has the authority to review or investigate, motu
proprio or on its own initiative, any transaction that may result
in substantial lessening or restriction of competition in a
market. Motu proprio means that, even without notification,
the PCC may commence a review of the proposed transaction.
Additionally, an agreement consummated in violation of
compulsory notification requirement shall be considered void
and subject the parties to an administrative fine of one percent
(1%) to five percent (5%) of the value of the transaction.
See PCA Chapter 2, Section 12 (a) and Chapter 4, Section 17
Illustrative case:
In April 2018, the PCC began a motu proprio review of the
acquisition by ride-hailing service provider Grab Holdings,
Inc. (GHI) and MyTaxi.PH, Inc. (MTPH) of its competitor,
Uber B.V. (UBV) and Uber Systems, Inc. (USI). The PCC’s
Mergers and Acquisitions Office issued a Statement of
Concerns (SOC) in May. The competition concerns flagged by
the SOC included price increases and service deterioration
arising from the merger of the country’s two biggest ride-
hailing apps. Amid the review, Grab offered to address the
competition concerns, which was the basis of the PCC’s
subsequent decision clearing the merger subject to conditions.
For more information, see Merger of dominant ride-hailing
firms
WHAT IS THE RECOURSE IF A PROPOSED M&A IS
FOUND TO BE ANTI-COMPETITIVE??
If it finds that the M&A could substantially prevent, restrict, or
lessen competition in the market, the PCC can prohibit the
transaction or impose conditions before the transaction can be
consummated. Alternatively, the merging parties can propose
voluntary commitments meant to curtail the anti-competitive
effects of the transaction. If the Commission accepts these
commitments, then the transaction can proceed, on condition
that the PCC will monitor the parties post-merger to determine
if they have complied with those commitments.
For more information, see PCA Chapter 4, Section
18 and PCC Rules of Merger Procedure
Illustrative case:
In 2017, the PCC accepted voluntary commitments from
TQMP Glass Manufacturing Corp. (TQMP) as a precondition
to TQMP’s acquisition of AGC Flat Glass Philippines, Inc.
(AGPH), the sole domestic manufacturer of clear and bronze
flat glass. The said commitments prevent TQMP from
engaging in anti-competitive conduct such as restricting
supply to competitors of its related entities. The PCC found
that, after acquisition of AGPH, TQMP and its related entities
would control more than 50 percent of clear and bronze flat
glass supplied in the Philippines either via importation or
domestic manufacture. The PCC also noted that TQMP had
the ability and incentive to increase prices of clear and bronze
flat glass supplied to competitors of its related entities post-
acquisition, as TQMP had related entities involved in the
downstream industries of glass processing and distribution.
The PCC approved the said acquisition based on the
commitments offered by TQMP.
For more information, see Voluntary Commitments by
merging flat glass manufacturers
WHAT ARE THE EXCEPTIONS TO COMPULSORY
NOTIFICATION?
Joint ventures of private entities formed for both solicited and
unsolicited public-private partnership (PPP) projects may be
exempted from compulsory notification. The PCC however
can modify or rescind, among others, the transaction value
threshold and other criteria subject to compulsory notification
and the exceptions or exemptions from the notification
requirement.
For more information, see PCA Chapter 4, Section 19, PCC
Memorandum Circular No. 19-001and PCC Memorandum
Circular No. 20-002
Coverage of Compulsory Notification in Land Acquisition:
A land acquisition not for the purpose of obtaining control by
one (1) or more entities through contract or other means is not
subject to the compulsory notification requirement under the
PCA and its IRR. A land acquisition is not for the purpose of
obtaining control when the following requisites are present:
1. The acquiring entity will not obtain control over an
acquired entity as a result of the acquisition; or
2. The acquiring entity will not obtain control over a
part of an acquired entity as a result of the
acquisition:
(i) The land to be acquired does not contain improvements that
constitute an operating segment as defined under Section 6
that will result in a horizontal or vertical relationship between
the Notifying Group of the acquiring and acquired entities;
and
(ii) The land to be acquired does not contain improvements
that may be considered as an essential facility, as defined
under Section 7.
For more information, see PCC Clarificatory Note No. 19-
001
Coverage of Compulsory Notification in Consolidation of
Ownership:
A merger or acquisition involving several entities controlled
by the same natural person(s) is not covered by compulsory
notification if there is no change in control, post-transaction.
If there are other shareholders who own or control shares in
the holding company which will have the ability to control the
combined entities after the consummation of the transaction,
the transaction will be covered by the compulsory notification
requirement.
For more information, see PCC Clarificatory Note No. 18-
001
DETERMINING THE RELEVANT MARKET
WHAT IS A RELEVANT MARKET?
The relevant market refers to the market in which a particular
good or service is sold and which comprises two dimensions:
the relevant product market and the relevant geographic
market. Each aspect is defined as follows:
(1) A relevant product market comprises all those goods
and/or services which are regarded as interchangeable or
substitutable by the consumer or the customer, by reason of
the goods and/or services’ characteristics, their prices and their
intended use; and
(2) The relevant geographic market comprises the area in
which the entity concerned is involved in the supply and
demand of goods and services, in which the conditions of
competition are sufficiently homogenous and which can be
distinguished from neighboring areas because the conditions
of competition are different in those areas.
The following factors help determine the relevant market:
 Possibilities of substituting goods and services with
other domestic or foreign products, considering
technological possibilities, availability of substitute
products to consumers, and the time required for such
substitution;
 Cost of distribution of goods and services, along with
its raw materials, and supplements and substitutes
from other areas and abroad, considering freight,
insurance, import duties, and non-tariff restrictions;
the restrictions imposed by economic agents or by
their associations; and the time required to supply the
market from those areas;
 Cost and probability of users or consumers seeking
other markets; and
 National, local or international restrictions which
limit the access by users or consumers to alternate
suppliers, or the access by suppliers to alternate
consumers.
See PCA Chapter 1, Section 4; Chapter 5, Section
24; and PCA Implementing Rules and Regulations, Rule 5
general interest of the country may be deterred by
overzealous or undue intervention; and
 Assess the totality of evidence on whether it is more
likely than not that the entity has engaged in an anti-
competitive agreement or conduct, including whether
the entity’s conduct was done with a reasonable
commercial purpose such as but not limited to
phasing out of a product or closure of a business, or
as a reasonable commercial response to the market
entry or conduct of a competitor.
For more information, see PCA Chapter 5, Section
26 and PCA Implementing Rules and Regulations, Rule 7
FORBEARANCE
WHEN CAN THE PCC EXERCISE FORBEARANCE?
The Commission, motu proprio or upon application, prior to
its initiation of an inquiry, may forbear from applying the
provisions of the PCA and its IRR, for a limited time, in whole
or in part, in all or specific cases, on an entity or group of
entities, if in its determination:
 Enforcement is not necessary to the attainment of the
policy objectives of the PCA;
 Forbearance will neither impede competition in the
market where the entity or group of entities seeking
exemption operates nor in related markets;
 Forbearance is consistent with public interest and the
benefit and welfare of the consumers; and
 Forbearance is justified in economic terms.
Provided, that forbearance will be granted for a maximum
period of one year. Any extension to the period will have to be
expressly approved by the Commission. Any extension of the
duration of an exemption shall not be longer than one year.
For more information, see PCA Chapter 5, Section
28 and PCA Implementing Rules and Regulations, Rule 9

DETERMINING EXISTENCE OF ANTI-

COMPETITIVE CONDUCT

HOW DOES THE PCC DETERMINE IF A BUSINESS

CONDUCT IS ANTI-COMPETITIVE?

In determining whether an anti-competitive agreement or

conduct exists or has been committed, the PCC shall:

 Define the relevant market allegedly affected by the

anti-competitive agreement or conduct, following the
principles laid out in Section 24 of the PCA;
 Determine if there is actual or potential adverse
impact on competition in the relevant market caused
by the alleged agreement or conduct, and if such
impact is substantial and outweighs the actual or
potential efficiency gains that result from the
agreement or conduct;
 Adopt a broad and forward-looking perspective,
recognizing future market developments, any
overriding need to make the goods or services
available to consumers, the requirements of large
investments in infrastructure, the requirements of
law, and the need of the Philippine economy to
respond to international competition, but also taking
account of past behavior of the parties involved and
prevailing market conditions;
 Balance the need to ensure that competition is not
prevented or substantially restricted and the risk that
competition efficiency, productivity, innovation, or
development of priority areas or industries in the