[0118]
Access Devices Regulation Act (RA 8484)
Access Device (Sec. 3.a)
• Card
• Plate
• Code
• Account number
• Electronic serial number
• Personal identification number (PIN)
In essence, Other means of account access to
obtain money, good, services or any other
thing or value or to initiate a transfer of funds
(other than a transfer originated solely by paper
instrument)
Account Access
- ability to access account and transaction
information on Accounts, transfer funds
between Accounts and make payments from
accounts through the Internet
Features of the Law
Credit Card
- open–end credit plan
Prohibited Acts (Sec. 9)
•producing, using, trafficking in one or more
counterfeit access devices
•Using, with intent to defraud, an unauthorized
access devices.
•using an access device fraudulently applied
for;
•possessing one or more counterfeit access
devices or access devices fraudulently applied
for;
• producing, trafficking in, having control or
custody of, or possessing device-making or
altering equipment without being in the
business or employment, which lawfully deals
with the manufacture, issuance, or distribution
of such equipment;
• inducing, enticing, permitting or in any
manner allowing another, for consideration or
otherwise to produce, use, traffic in counterfeit
access devices, unauthorized access devices or
access devices fraudulently applied for;
• multiple imprinting on more than one
transaction record, sales slip or similar
document, thereby making it appear that the
device holder has entered into a transaction
other than those which said device holder had
lawfully contracted for, or submitting without
being an affiliated merchant, an order to collect
from the issuer of the access device, such extra
sales slip through an affiliated merchant who
connives therewith, or, under false pretenses of
being an affiliated merchant, present for
collection such sales slips, and similar
documents;
• disclosing any information imprinted on the
access device, such as, but not limited to, the
account number or name or address of the
device holder, without the latter's authority or
permission;
• obtaining money or anything of value
through the use of an access device, with intent
to defraud or with intent to gain and fleeing
thereafter;
• having in one's possession, without authority
from the owner of the access device or the
access device company, an access device, or any
material, such as slips, carbon paper, or any
other medium, on which the access device is
written, printed, embossed, or otherwise
indicated;
• writing or causing to be written on sales slips,
approval numbers from the issuer of the access
device of the fact of approval, where in fact no
such approval was given, or where, if given,
what is written is deliberately different from the
approval actually given;
•making any alteration, without the access
device holder's authority, of any amount or
other information written on the sales slip;
•effecting transaction, with one or more access
devices issued to another person or persons, to
receive payment or any other thing of value
• without the authorization of the issuer of the
access device, soliciting a person for the
purpose of —
1) offering an access device; or
2) selling information regarding or an
application to obtain an access device; or
• without the authorization of the credit card
system member or its agent, causing or
arranging for another person to present to the
member or its agent, for payment, one or more
evidence or records of transactions made by
credit card.
Frustrated and Attempted Access Device Fraud
(Sec.12)
Frustrated
• Any person who performs all the acts of
execution which would produce any of the
unlawful acts enumerated in Section 9 of this
Act, but which nevertheless does not produce it
by reason of causes independent of the will of
said person, shall be punished with two-thirds
(2/3) of the fine and imprisonment provided
for the consummated offenses listed in said
section.
Attempted
• Any person who commences the commission
of any of the unlawful acts enumerated in
Section 9 of this Act directly by overt acts and
does not perform all the acts of execution
which would produce the said acts by reason of
some cause or accident other than said person's
own spontaneous desistance, shall be punished
with one half (1/2) of the fine and
imprisonment provided for the consummated
offenses listed in the said section.
Intent to defraud for credit cards
• A cardholder who abandons or surreptitiously
leaves the place of employment, business or
residence stated in his application for credit
card, without informing the credit card
company of the place where he could actually
be found, if at the time of such abandonment or
surreptitious leaving, the outstanding and
unpaid balance is past due for at least ninety
(90) days and is more than Ten thousand pesos
(P10,000) shall be prima facie presumed to
have used his credit card with intent to defraud.
IN CASE OF LOSS
LOSS OF ACCESS DEVICES
•The holder thereof must notify the issuer of
the access device of the details and
circumstances of such loss upon knowledge of
loss
CASES
Cruz v. People, GR No. 210266, 7 June 2017
• Cruz was accused of having in his possession
counterfeit access devices
• A Citibank Visa Card when he was purchasing
from Duty Free Philippines perfume worth
US$96.00.
• He purchased Ferragamo shoes but could not
present a valid ID in the same name as the
credit card
• Credit card transactions were disapproved.
• The credit card was captured from Cruz and
turned over to the CIDG
• Credit card was not marked and identified
during pre-trial but certification that it is a
counterfeit was presented
• RTC: Guilty; CA: denied appeal because
prosecution had sufficiently established
possession
ISSUE:
Is a credit card an access device?
Yes, because it is used for the purpose of
obtaining money, goods, property, labor or
services or anything of value on credit.
What is the corpus delicti of the crime of
possession of a counterfeit access device?
What is prohibited is the possession and use of
a counterfeit access device.
Therefore, the corpus delicti of the crime is not
merely the access device, but also any evidence
that proves that it is counterfeit.
Does the non-presentation and non-marking of
the credit card render it inadmissible?
No. The presentation of a certification that it
was counterfeit which makes the possession
and use of the access device illegal.
Soledad v. People, GR No. 184274, 23 February
2011
• Henry received a call from a credit card agent
who offering a Citifinancing loan assistance at a
low interest rate. Henry gave his information
including his Globe handy phone original
platinum gold card, IDs and statement of
accounts.
• He was being charged for 5 mobile numbers
bearing his name, photo ID and forged
signature
• His Citibank database was altered and he had
a pending application with Metrobank
•Entrapment. Arrested Mark Soledad who
pretended to be Henry when the card was
presented. He was charged with possessing a
counterfeit access device or access device
fraudulently applied for.
•RTC: Guilty. CA: denied appeal.
Issue:
Was Soledad in possession of the counterfeit
card?
Yes. Animus possidendi is a state of mind, the
presence or determination of which is largely
dependent on attendant events in each case. It
may be inferred from the prior or
contemporaneous acts of the accused, as well
as the surrounding circumstances.
Proof of possession
•Prior to commission: obtained documents
• Obtained cell phones
•Applied for a credit card under Henry's name
and used the collected documents
•He received the credit card after showing the
IDs and signed the acknowledgment.
BPI v. Spouses Sarda, GR No. 239092, 26 June
2019
• Ram Sarda was pre-qualified to receive a
credit card.
• BPI issued a credit card in Ram Sarda's name
which was received by Ms. Tandogon, who was
also issued a supplemental card in her name.
• Ram Sarda failed to pay his credit card
statement amounting to PHP 1,213, 114.19
• Sarda claimed that he did not apply for or
have received the credit card issued by BPI..
•RTC: Ordered to pay because an employee
received the credit card which may have been
done on his behalf. Sarda failed to call the
attention of BPI of the non-receipt of the credit
card when it received the first billing statement
• CA: granted appeal because BPI failed to
prove that Mr. Sarda had physical possession of
the credit card and the issuance of a
supplementary card.
ISSUE:
What is a pre-screened client?
• Filing of application and form submission has
been dispensed with.
• Upon receipt of the card, the pre-screened
client has the option to accept or to reject the
credit card.
• The receipt of the credit card by signing a
receipt and using it is the contractual
relationship between the parties.
Did Mr. Sarda receive the credit card?
• No proof that Ms. Tandogon had the authority
to receive the card.
•The use of the card, faced with the denial that
it was issued to Mr. Sarda, places the burden on
BPI to prove that it was indeed used by Mr.
Sarda.
Did BPI observe the duty imposed on banks?
• No, it did not. Banks are prohibited now from
issuing pre-approved credit cards.
• Banks must exercise proper diligence by
ascertaining that applicants possess good credit
standing and are financially capable of fulfilling
their credit commitments. must exercise proper
diligence by ascertaining that applicants possess
good credit standing and are financially capable
of fulfilling their credit commitments.
[0125] -All persons/entity engaged in any trade,
PHILIPPINE COMPETITION ACT industry and commerce in the Republic of the
Philippines.
Forms of rivalry -Those engaged in international trade having
-Price direct, substantial and reasonable foreseeable
-Quality effects in trade, industry or commerce in the
-Services Philippines even those outside of the
-Combination of any Philippines.(extraterritoriality)

MONOPOLY In relation to 4(h) Entity means all

Join acquisition or maintenance by members of -person, natural or juridical
a conspiracy formed for that purpose, of the -Sale proprietorship
power to control and dominate trade and -Partnership
commerce in a commodity to such an extent -Combination or association, in any form:
that they are able, as a group, to exclude actual Incorporated or not
or potential competitors from the field, Domestic or foreign
accompanied with the intention or purpose to GOCC or not, directly or indirect in any
exercise such power. economic activity
-Trade association to promote quality standards
Purpose of anticompetitive laws and safety issues
To ensure that these trusts did not permanently
undermine competition in these or other Excluded:
markets. -Combination of employees (Association of
managerial)
Anti-Trust Law -Agreements or arrangements with
Legal arrangements where someone is given employers(CBA)
ownership of property to hold solely for
another’s benefit. SUBSTANTIAL LESSENING OF
COMPETITION(SLC)
Controlled or threatened to control entire *It is not illegal to have market power or to use
nationwide markets for rail transport, steel, it.
petroleum, banking and related lines of What is illegal is if it has the purpose, effect, or
commerce. likely effect of substantially preventing,
restricting, or lessening competition.
PHILIPPINE COMPETITION LAW
Elements:
Purpose of competition – to encourage 1. Object or effect
competition to protect consumers. To level the 2. Action prevents, restricts or lessens
playing field. Level playing field. Everyone plays competition
by the rules. 3. Substantial

*What pillar was violated. How was it Violated.
EX: In doing so, X substantially lessened
competition which is detrimental to the interest
of the consumers.
Coverage:
Substantial lessening of competition. HOW
1. Consider the likely state of future
competition in the market with and without the
impugned conduct; and
2. On the basis of such consideration, conclude
whether the conduct has the proscribed anti-
competitive purpose or effect
 -Even if there is an increase in price, consumers
RELEVANT MARKET would not turn to substitutes.
-Where supplier would gain profit from
Define market first. monopoly, then there is relevant market.
To ascertain which competitors have the power
to restrict the behavior of the undertakings SUBSTITUTABILITY (see IRR)
under examination.
Will a firm have market power? Will they have a
dominant position?

Relevant Market
Market in which a particular good or service is
sold and which is a combination of the relevant
product market and relevant geographic market

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 heir intended
use; and

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 area

SSNIP
SMALL BUT SIGNIFICANT AND NON-
TRANSITORY INCREASE IN PRICE
Application:
If sufficient numbers of buyers are likely to
switch to alternative products and the lost sales
would make such price increase unprofitable,
then the hypothetical market should not be
considered a relevant market for the basis of
litigation or regulation.

If there is SSNIP in price that would make

consumers turn away, then this is not a relevant
market

WORTH MONOPOLIZING =RELEVANT MARKET

[0201] Continuation of Philippines Competition
Act
Drivers had to secure in the acquisition that
there was monopoly;
The case shows that even without the PCA,
there are already regulations that sought to
curtail monopoly; as instructed by the 1987
Constitution. Here, LTFRB mandated passenger
accidents insurance requirements for public
utility vehicles and issued Memorandum
Circular with a two group system such that
certainty.
PAMI vs Great domestic Insurance.
There is monopoly which will curtail free
competition.
Simply there is no restraint on trade and there
is competition, and the memorandum circular
of the LTFRB did not curtail free competition
amongst insurance businesses; no violation of
equal protection and substantive due process.
Monopoly and competition in restraint of trade
SC:
While embracing free enterprise is an economic
freedom, the constitution does not totally
prohibit the operation of monopolies. So there
is permission from the Supreme Court in
interpreting the constitution, “monopoly is not
in itself bad” but the state must regulate that
this monopoly will not work against public
interest. Once public interest and consumer
welfare is no longer promoted, then these
monopolies are evil. Wordings of Atty. Tadeo.
In those situation where it is no longer
beneficial to the consumer welfare that’s the
time that the state should either deem to
regulate it.
THERE WAS NO MONOPOLY THAT IS
UNLAWFUL IN THIS CASE. It is promoting public
interest. The purpose of an insurance, in case
passenger suffer any accident it is the insurance
that will pay for any injury of the passenger, this
is beneficial to the riding public. In this
particular type of monopoly, there is no
restraint on competition because it is beneficial
to the public, it protects the riding public.
THERE IS NO DISCRIMINATION AGAINST ANY
LEGITIMATE INSURER. There might be two
groups but these two groups also composed of
several insurance companies. It just so happens
that they had to group it according to odd or
even so that there would be more efficient and
more orderly, but in the particular group there
are several insurance companies that will also
be available to give insurance coverage to the
public utility vehicle. SO in that particular group
there is still competition it is not just limited to
one action, collectively they are referred to
family collected….
INSURANCE COMPANIES COULD ACTUALLY
APPLY WHETHER FAMILY OR GENERAL
INSURANCE. PAMI general insurance is not
engaged in insurance business, they are just a
group or a consortium, but actually it’s the
members of the consortium that will be selling
insurances to the public. Meaning there is no
restraint in competition.
HOW TO DETERMINE IF THERE IS RESTRAINT ON
COMPETITION, IF IT IS SUBSTANTIAL LESSENING
OF COMPETITION, take a look at the
circumstances prior to the act and then after.
How it’s going to be affected by whatever is the
part of the pillars of the Philippine Competition
act.
KEYWORDS when talking about the Philippine
Competitions Act, to say that it is unlawful, it
should be:
“Substantial lessening of competition” SLC–
there is substantial lessening of competition in
the relevant market that will not serve
consumer welfare
Prohibited Acts (Three Pillars)
1) Anti-competitive merger and acquisitions
2) Anti-competitive agreement
3) Abuse of dominant position – there must be
abuse
1) Anti-competitive merger and acquisitions
Merger is the joining of two or more entities
into an existing entity or to form a new one.
There is someone who does not survive if it is to
form a new one.
ie. merger of BPI and Robinsons Bank
Why does entities merge?
1. economies of scale – in order to survive
merge with another entity who has certain
abilities that they could take advantage of, and
to maximize profit.
ie. BPI is strong contender in the universal and
commercial banking; RB has equity in digital
banking; SLU and UC; nike and apple
2. efficiencies for better bargaining power,
market power and management
it is done when a company starts to pivot, or
include other businesses in their line of
business; expand business.
ie. instead of starting from scratch, take
advantage of their technology;
3. profitability
There is a problem when it increases the price
or when it downgrades quality, meaning
merger and acquisition is anti-competitive
Purchase acquisitions – purchase of securities
and assets; the purchase is to obtain control;
can be done by one entity of the whole or part
of another, two or more entities over another,
one or more entities over one or more entities;
meaning you can have an agreement with
another entity to purchase another business, or
one entity purchases part of the business or the
whole
Ultimate Parent Entity (UPE) – juridical entity
that directly or indirectly controls a party to the
transaction and is not controlled by any other
entity. ie. Robinsons bank, the UPE is
Gokongwei; SM development Corporation, …;
Prohibited Merger and Acquisition – those that
prevent, restrict, or lessen competition in the
relevant market.
Eg. PAL – market share of 40%; Cebu Pac – 60%.
If they merge into Philippine Pacific Airlines; is it
Anti-competitive merger and acquisitions? Yes,
because they control the entire market 100%,
they have the ability to increase prices and
reduce quality.
Purpose of Merger Review by the Philippine
Competition Commission
This is the way by which the PCC intervenes in
these situations, it now regulates anti-
competition, anti-competitive merger and
acquisition.
The purpose is to avert structural changes that
would damage incentives for businesses to
compete. Simply they would be the one to
make sure that there is no structural changes
that would lead to anticompetitive practices or
that would deter from free competition.
Two kinds of Merger Review:
1. ex ante merger control (before merger and
acquisition) – present in the Philippines; more
preventative that there would be no abuse of
dominance that cannot happen by merger and
acquisition
2. ex post merger control (after merger and
acquisition)
Advantages of Merger Review:
1. prevents potential damage to consumers –
because it happens before; the PCC will not
approve if it determines that it is
anticompetitive, so before it happens it is
already being prevented; it is more timely.
The difficulty if it is after, the damage will have
already been done.
Even if there is merger and acquisition, that is
valid under obligations and contracts, it cannot
be consummated because there is no approval
from the PCC. What would an otherwise be a
valid contract between parties can be rendered
unlawful, void cannot be cleared by the PCC and
the consequence is as if there was no contract,
as if there was no merger and acquisition.
Triggers for Review - not every merger and
acquisition will be subject of review by the PCC
Compulsory Notification – depends on the size
of the person (soP) and size of the transaction
(soT)
Motu proprio by the PCC – if they were
required to submit themselves for review but
failed to notify, or if it is noticeable that there
was already consummation without any
clearance; referred to as gun jumping or
jumping the gun, meaning that you
consummate something that needs clearance
first
Compulsory Notification – seek clearance from
the PCC; triggers:
a) size of transaction(soT) – if the value of the
transaction exceeds 2.9 billion, the properties
and equities that will be purchased; according
to 2023 Circular issued by the PCC; the law
states 1 billion;
it is considered as one transaction, a successive
transaction or acquisition of part or one or
more entities within a period of one year
between same parties.
b) size of person(soP) – presence of one is
enough to trigger notification; aggregate gross
annual revenue (not income), or the value of
assets of the ultimate parent entity, the
resulting entity would be 7 billion (2023
Issuance of PCC)
if equity acquired in the company, if one entity
purchases 35% control, or if there is already
35% and they are purchasing more that is now
additional 50%, then this will qualify for
compulsory notification. 35% means there is
sizeable control over the entity, it is not
necessary that it be 50%, the threshold is 35%
PCC has motu proprio ability to make
determination if the merger and acquisition is
anti-competitive.
Exemptions from Prohibited Mergers and
Acquisitions:
a) gains in efficiencies that are greater than the
effects of any limitation on competition
Not all mergers and acquisitions would be anti-
competitive, if the entity qualifies for the
compulsory notification, show and prove that it
is not anti-competitive by showing whatever is
gained in the merger will be greater than what
is now going to be the consequence to the
limitation in competition, in other words, the
joining of the two entities, the merger and
acquisitions, will be beneficial to consumer
benefit, and even if there are going to be some
adverse effects, it still is going to be less
compared to the benefits. Simply, that the good
outweighs the bad. Greater improvement in the
quality of goods and keep the cost of prices at a
minimum increase which is more beneficial.
b) the other entity is in imminent financial
failure
similar to social justice, instead of allowing the
entity to continue to fail, the best thing to do
would be to purchase or acquire the entity,
because there is some good that could happen
if it is purchased.
Show and prove through financial statements.
What is not prohibited is – acquisition of stock
for investment, purpose is only for investment,
to make money from the purchase of the shares
of stocks not to exercise control.
Defense in Merger and Acquisition (yes we are
submitting ourselves for compulsory
notification and we are saying that)
a) there exist substantial efficiencies created by
the merger and acquisition;
efficiencies meaning it will reduce or be
beneficial for the prices, economies of scale will
be improved, produce more with lesser cost,
meaning prices will not be increased;
efficiencies created by having all the manpower
which will be beneficial to the consumer
“always frame defenses for CONSUMER
WELFARE”
PROCEDURES
Standard: Substantial lessening of competition
(SLC)
Who has the burden of proof: if you want to
prove exemptions (same principles under the
law), the ones claiming exemptions should show
(a) gains from the merger outweigh the losses in
the lessening of competition, or b) that there is
financial instability of one of the parties)
Notification is done at the end of the
negotiations, meaning the contract has been
finalized.
Phase One: Notification will be …, the PCC will
issue a notice of sufficiency and payment of
filing fee; some information that might be
obtained by the PCC (further investigations
wherein certain documents will be required to
be submitted). After this, the PCC rules on
whether or not to clear the merger or
acquisition. PCC can
a) prohibit outright, or
b) prohibit unless parties modify (1. structural,
meaning they may dispose certain assets and no
longer be engaging in this business in such
aspect which is causing the substantial lessening
of competition; 2. Every action shall have
behavioral remedies [ie. price control
commitments, that they will not increase prices
above this]), or
c) prohibit unless they enter into enforceable
agreement (undertakings by the merging
parties or the surviving in case of acquisition on
How to avoid lessening substantial
competition), or
d) clearing or approving it.
If there is no action within the prescribed
period, the merger is deemed approved. 90
days.
In mergers and acquisition, to consummate
means all those agreements or undertakings
under the contract of merger and acquisition
will already be given effect.
Entities under PCA, wherein PCC must approve
(considered to be of public interest):
Banks, banking institutions, building and loan
associations, trust companies, insurance
companies, public utilities, educational
institutions, other special
Two approvals:
a) Approved by government agency tasked over
it (Bangko Sentral ng Pilipinas - Banks, banking
institutions, building and loan associations, trust
companies; Insurance Commission - insurance
companies; LTFRB/LTO - public utilities;
CHED/DEPED - educational institutions), and
b) PCC
Approval of Merger and Acquisition is Final,
except if it is obtained via fraudulent means.
Final means it is not subject of appeal; It is
subject of Review via Petition for Certiorari Rule
65
A TRO cannot be issued by the RTC, only from
the Court of Appeals and the Supreme Court.
Cases
1. Previous case on Sugar, Universal Robinsons
engaged in sugar business took a look at the
relevant markets who included molasses in
refining sugar and sought to determine if in this
area there is anti-competition. There was. That
is why the PCC did not clear the merger and
acquisition.
2. BPI and Robinsons Bank (decided 2023)
Merger and Acquisition case determined by the
PCC
Engaged in Banking; BPI is the surviving entity.
The market share: BPI is the 3rd largest bank in
the country
Relevant product market: (to determine if
there is monopoly in this certain areas)
a) Deposits in Universal Bank(UB) and
Commercial Bank(KB)
b) Deposits in Thrift Bank(TB)
c) Loans offered by Universal Commercial
Bank(UKB)
d) Credit Card Issuance
e) Trust Management
f) Life Insurance offered thru Bancassurance
g) Merchant Acquiring
h) Commercial Leasing
Relevant Geographic Market: Nationwide
(because there are branches all over the
country)
 Pre Bank
Difference Between Universal Banking and Transaction
Commercial Banking: (the existence of allied Deposits in Significant No
investments) Universal share Significant
There are certain things that a KB can engage in, Bank(UB) and share
can have control over which is not going to be a Commercial
deterrent for UB because they can do allied and Bank(KB)
non-allied financial investments Deposits in Top 20 in Top 20 in
Thrift the market the market
Trust Management – banks are incharged of Bank(TB)
mananging certain assets of other people; Loans offered Significant No
utilized in mutual funds. by Universal share Significant
Commercial share
Bancassurance – because banks cannot engage Bank(UKB)
directly in insurance, it is an offshoot of the Credit Card Significant No
bank Issuance share Significant
share
Merchant Acquiring – purchasing certain Trust Significant No
assets; they pay for goods that are purchased Management share Significant
by other individuals share
Life Insurance No No
Commercial Leasing – leasing business or offered thru Significant Significant
properties for commercial use Bancassurance share share
Merchant No Top industry
Relevant Market Acquiring Significant players
Relevant Product Relevant Geographic market
market Market share
Deposits in Universal Commercial No No
Bank(UB) and Leasing Significant Significant
Nationwide
Commercial share share
Bank(KB)
Deposits in Thrift
Bank(TB) Market Share Pre Combined BPI
Loans offered by Transaction
Universal Deposits in Universal Retain market share
Commercial Bank(UB) and
Bank(UKB) Commercial Bank(KB)
Credit Card Issuance Deposits in Thrift No significant
Trust Management Bank(TB) market, negligible
Life Insurance increase
offered thru Loans offered by Retain market share
Bancassurance Universal
Merchant Acquiring Commercial
Commercial Leasing Bank(UKB)
Credit Card Issuance Retain market share
Trust Management Retain market share
Market Share BPI Robinsons Life Insurance
 offered thru
Bancassurance
Merchant Acquiring BPI will not even
reach Top 5
Commercial Leasing
Ruling: PCC approved the merger of BPI and
Robinsons bank because there is no substantial
lessening of competition. The post transaction
market share is insufficient. It is at its peak right
now and even with the merger with Robinsons
bank it’s not going to be affected by it. Banking
is highly competitive. Through the existence of
its competitors, they will not put a pressure on
the surviving entity to continue or to maintain
its prices to improve the efficiency in the quality
of goods. It’s not going to cause substantial
lessening of competition, the gains outweigh
the losses.
Bank Clients, people switch. SNIPP, a little
increase in prices, meaning that the interest is
going to be lower because of the merger,
people will switch banks because they are
sensitive to changes in the prices. So there can
be no monopoly.
Competition, if there is a merger, will that
foreclose or will it be a bar for competitors
because there is now control over the market
share, will the merged firm occupy a dominant
position post transaction? NO, by analysis, it will
remain as is.
Post transaction for loan products: 50%,
optimistic assessment, it is the ceiling already; it
is not enough to foreclose rivals
Bancassurance products: insurance done by
banks; there is no significant market share, top
10 and it will remain as such
Commercial leasing: there are a lot of
competitors so they cannot enjoy any
monopoly.
Merchant acquiring services: other competitors
can engage
March 9, 2023 – Merger Approved.
Anti-competitive Agreements
Definition. Any type or form of contract
(regardless of whether it’s in writing, electronic,
public instrument, should have been in a public
instrument but it’s just in writing),
understanding, collective recommendation, or
concerted action, whether formal or informal,
explicit or tacit, written, or oral. Done by any
entity (including government-owned and
controlled corporation)
Gentleman’s agreement is covered. Everything
and everyone
Horizontal Competitors – they are two or more
businesses competing at the same level in the
market, and that they are buying or selling
interchangeable goods or services.
Ie. fuji, canon, sony –horizontal competitors of
one another. Wholesalers against wholesalers;
retailers against retailers; NOT wholesalers
against retailers (NOTE be careful).
They are not competitors if they are controlled
by a common entity.
They are unable to decide or act independently
of one another. ie Jollibee foods corporation
and Mang Inasal, they are not competitors
because they have the same parent company
What are not Anti-competitive agreements?
Those that contribute into the production or
distribution of goods and services, or
To promote technical or economic progress (ie.
agreement that all electronic companies will
establish technohub in SLU, it is an agreement
among them because they are promoting
technical progress)
What are the Prohibited agreements?
per se rules (on its own/ by itself anti-
competitive)
objects rule (consecquences)
Per se prohibited: (immediately unlawful)
a) Restricting competition as to price, any
component thereof, or other terms of trade;
b) Price-Fixing, Bid-Rigging, Output Limitation
and Market Sharing. Fixing price at an auction
or in any form of bidding, including cover
bidding, bid suppression, bid rotation and
market allocation, and other analogous
practices of bid manipulation. (ie. construction
company, they will agree that they will make a
bid and will respectively take turn to bid the
lowest amount)
Price fixing is a per se violation because there is
almost always a tendency to restrict
competition. Restrict competition meaning they
can dictate on the prices already, always
guaranty a profit regardless of the
consequences of consumer welfare.
They increase prices to decrease output. By
decreasing the output they can always control
the prices.
Conclusively presumed to be unreasonable
because they lack reviewing value. There is no
argument of gains in efficiency.
Defense in case of Price-fixing: deny that there
is price-fixing, it is the only remedy because it is
conclusively presumed.
Rule of Reason
weigh any pro-competitive and anti-competitive
effects of an agreement
The true test of legality of any agreement is
whether to regulate and promote competition
or is it to suppress or destroy competition. To
what extent is it going to suppress competition
Price-fixing agreement Case (US Case, 435 US
679(1978))
Ruling: it is anti-competitive agreement when
the engineers cannot give any information
about the cost of services. Just because it is
conducive to ethical behavior does not mean
that it is now promoting competition, being
ethical and anti-competitive can coexist. Let the
people decide according to prices.
US filed a suit because the engineer’s
canon of ethics prohibit members from
submitting competitive bids for engineering
services. They cannot give information as to the
prices of their services to prospective
consumers. Engineering should not be based on
prices, it should be based on the quality of
service that is the reason why they cannot give
any information about the cost of services.
The National Society of Professional
Engineers defended the canon, arguing that it
was adopted to minimize the risk that
competition would produce inferior engineering
work endangering public safety. However, the
Supreme Court rejected this justification. It held
that the canon, by banning competitive bidding,
restrained trade within the meaning of Section
1 of the Sherman Act.
The Court stated that the Rule of
Reason does not support a defense based on
the assumption that competition itself is
unreasonable. It emphasized that the Sherman
Act is predicated on the assumption that
“competition is the best method of allocating
resources” in the nation’s economy.
US Case (1940) – pertains to oil, diesel and
gasoline. Major oil company selling gasoline in
the Midwestern area, so around Texas. Over
supply of oil, prices would be low. Demand is
not enough, it is little compared to the supply.
So no one’s purchasing oil. Seller assigned to
certain buyers
United States v. Socony-Vacuum Oil Co., 310
U.S. 150 (1940), a landmark decision by the
United States Supreme Court.
The Socony-Vacuum Oil Company, along with
other major oil companies, was accused of
price-fixing. The companies had created a
program to buy up excess oil on the market in
order to stabilize prices. This was done during a
time when there was an oversupply of oil, and
prices were low due to insufficient demand.
The Supreme Court held that this program
constituted price-fixing and was thus a per se
violation of the Sherman Antitrust Act. The
Court stated that any combination that tampers
with price structures is engaged in an unlawful
activity. Even though the members of the price-
fixing group were in no position to control the
market, to the extent that they raised, lowered,
or stabilized prices they would be directly
interfering with the free play of market forces.
This case is widely cited for the proposition that
price-fixing is illegal per se.
Agreement which has the effect of raising prices
is per se anti-competitive.

Agreement among psychologist and

psychiatrists to fix the prices at 40 thousand, is
that considered anti-competitive agreement?

Prohibited depending on effect

Object or effect rule – intent is immaterial, only
the consequence
Restraint on the impact on competitive
condition, we value free competition.
The effect of the agreements, it tends to restrict
free competition.

Setting, limiting, or controlling production

markets, technical developments or
investments. (ie factory had the ability to
produce 5000 semiconductors. There will be
agreement with another entity, produce 10000,
agreed to only produce only 5000. It justifies
the raise the price, more expensive and all
other products will be expensive. Entity is
capable of producing more, they want to
maximize on profit at the expense of free
competition.)

Dividing or sharing the market, whether by

volume of sales, or purchases, territory, type
of goods or services, buyers or sellers, or any
other means
ie. ChocNut same entity or same producer of
goods, substantial lessening of competition.
[0208]
Prohibited Acts
Mergers and Acquisitions (S. 1 6)
Anti-Competitive Agreement (S. 1 4)
Abuse of Dominant Position (S. 15)
Anti-Competitive Agreement (S. 14)
-agreement between horizontal competitors,
not between wholesaler and a retailer
Sec. 14 (b). Agreements between or among
competitors which have the object or effect of
substantially preventing, restricting or lessening
competition shall be prohibited:
Object or Effect Rule (take a look at the
consequences and not the intent)
RULE OF REASON (ROR)
Weighs procompetitive and anticompetitive
effects of an agreement
TRUE TEST OF LEGALITY
Whether an agreement imposed merely
regulates and perhaps promotes competition
or whether it is such as may suppress or even
destroy competition
1. (supply) Setting, limiting, or controlling
production, markets, technical development; or
2. (demand) Dividing or sharing the market,
whether by volume of sales or purchases,
territory, type of goods or services, buyers or
sellers or any other means;
Ie. selling semicon products; manufacturer
agreed to sell quality products to certain
retailers, there is collusion; there is no fair play
and competition.
DETERMINATION OF ANTI-COMPETITIVE
AGREEMENT Sec.26
1. Define the relevant market allegedly affected
by the competitive agreement
2. Determine actual or potential adverse
impact on competition
3. Adopt a broad forward-looking perspective
• future market developments
• Benefits to consumers
• Requirement of law
• Need to respond to international competition
• Past behavior of parties
4. Balance competition is prevented with the
effects of overzealous intervention (exercise of
regulation should be enough in order to balance
competition)
5. Assess totality of evidence
ABUSE OF DOMINANT POSITION
For one or more entities to abuse dominant
position their by engaging in conduct that
would substantially prevent, restrict or lessen
competition
Determination of Dominance Rule 8 IRR
-dominance is a pre-requisite
Dominant Position, def. Sec. 4(g). Position of
economic strength that an entity or entities
hold which it makes it capable of controlling
the relevant market independently from any or
a combination of the following: competitors,
customers, suppliers or consumers.
(able to dictate prices, demand, or limit supply
on its own - independently)
REBUTTABLE PRESUMPTION OF DOMINANCE –
Market share is 50%
To be punishable: (if)
The abuse of dominance should be for the
purpose of substantially restricting, lessening or
preventing competition
Not punishable: (if)
- Maintenance or increase of market share is
through legitimate means (ie. first entity to be
engaged in such business, meaning it can enjoy
dominant position)
- Improvement of production is beneficial to
consumer
Pricing (influence the prices)
(a) predatory pricing
-undercutting the selling price of competitors
(d) Price discrimination and discount
(e) Loyalty rebates and discounts/ requirement
contracts
(g) Imposing unfair prices
(h) Monopoly Prices
Non-Pricing
(b) refusal to deal
(c, f) tying and bundling
(i) Limiting output
Predatory Pricing
Selling goods or services below cost with the
object of driving competition out of the
relevant market
Not abuse of dominance: (if) done in good faith
Compete with a lower price of a competitor in
the same market selling the same
(clear sign of predatory pricing is when the cost
of the good does not justify the price that was
set)
Price discrimination and discount (d)
Setting prices or other terms and conditions
that discriminate unreasonably between
customers or sellers of the same goods or
services
EXAMPLE: Selling gasoline. Selling to gasoline
station and B at a lower price than it sells to
station C and D. Reason: No reason for the
discrimination. There was a presumption of
adverse effect. (it is permissible if it is justified)
Permissible price differential (prices may vary
from costumer to costumer)
1. Socialized pricing for less fortunate
2. Reflects cost of manufacture, sale or delivery
3. Price differential or terms or sale offered in
response to the competitive price of payments
4. Price changes in response to changing market
conditions, marketability of goods or service or
volume
Imposing Unfair Price (h)
High prices on purchase or selling price on their
competitors, customers, suppliers or consumers
(ie. manuf x selling to x1 sister company, and y;
y is charged more; if no basis then it is clear
indication to drive out a competitor)
Imposing Unfair Price “imposing unfairly low
purchase prices”
For goods or services of marginalized
agricultural producers, fisherfolk, micro
enterprise and other marginalized service
providers
Monopoly Price
Discourages new entrants and subjects to
barriers to entry.
>It is abuse to (it is abusive because)
Charge a price which is excessive because it has
no reasonable relation to the economic value of
the product.
>Example: Increase of prices of medicine which
were not based on non-cost factors. (but if it is
based on cost, then the high price will be
justified)
>Not abuse of dominant position (if)
Prices that develop in the market as a result of
or due to a superior product or process,
business acumen or legal rights or laws shall
not be considered unfair prices (ie. patent
rights)
>We do not punish dominancy
Efficient Entity must benefit from its success (by
imposing high prices)
Loyalty rebates and discounts/ requirement
contracts (e)
Imposing restrictions on lease or contract of
sale of goods or services
Examples:
a) Fixing prices;
b) Giving discounts or rebate upon price;
c) Imposing conditions not to deal with
competing entities (Example: discounted rates if
wholesaler only purchased from supplier)
Refusal to deal (b)
Imposing barriers to entry to prevent growing
within the market in an anti-competitive
manner
Tying and Bundling
Tying - Purchase of one product is conditional
on purchase of a second product
Bundling – Where two products offered for sale
in a bundle
Tying and bundling
- Making a transaction subject to acceptance by
other parties of obligation which, by their
nature or according to commercial usage, have
no connection with the transaction (h)
- Making supply of particular goods or services
dependent upon the purchase of other goods or
services from the supplier which have no direct
connection with the main goods or services (f)
Limiting Output
Limiting production, markets or technical
development to the prejudice of consumers (if
there is limit in production, then there is limit in
supply, meaning increase the price because
there are no more goods to satisfy the demands
of the consumers)
Powers of the Philippine Competition
Commission
Quasi-judicial Body
• Investigate and hear and decide on cases
involving violation
• Review proposed mergers and acquisitions
• Issue subpoena duces tecum and ad
testificandum
• Original and primary jurisdiction in the
enforcement and regulation of competition-
related issues
Forbearance by the PCC (Sec. 28) (meaning
they will not implement or apply the provisions
of law in the following situations); (in order to
exercise this, there must be the conduct of
public hearing, and explanation of the non-
application of the Philippine Competition to
certain actions by certain entities, and such
decision be made public)
1. Enforcement is not necessary to the
attainment of policy objectives
2. Forbearance will neither impede competition
in the market where entity operates
3. Consistent with public interest and the
benefit of the welfare consumers
Nolo contendere
- Applies in criminal cases
- (an entity) Does not accept or deny
responsibility but agrees to accept punishment
as if he pleaded guilty (meaning just taking on
the penalty)
- Cannot be used to prove civil liability
Leniency (Sec. 35) –entity seeks certain benefits
from the PCC
Immunity from Suit
Voluntary disclosure of information regarding
anticompetitive agreement
If:
a. Information is new (the Commission does not
know of the anticompetitive practice)
Or if information is not new
a. Entity is the first to come forward and
qualify for leniency
b. Information of commission is
insufficient to convict
c. Granting leniency would not be unfair
to others
b. Upon discovery of illegal activity, it took
actions to terminate it
c. Reports the matter completely, and gives
complete cooperation during investigation
d. Entity did not coerce another party to
participate in the activity
Cases:
GIOS-SAMAR, INC., VS. DOTC and CAAP (G.R.
No. 217158, March 12, 2019)
Pieces of Evidence to Establish Monopoly that is
Unlawful (elements to show)
(1) the relevant market is that of airport
development, maintenance, and operation
(under the facts-based criteria enumerated in
Section 24 of RA No. 10667);
(2) the entity has achieved a dominant position
(under the facts- based criteria enumerated in
Section 27 of RA No. 10667) in that relevant
market; and
(3) the entity commits acts constituting abuse of
dominant position (under the facts based
criteria enumerated in Section 27 of RA No.
10667).
PHILIPPINE CONTRACTORS ACCREDITATION
BOARD, PETITIONER, V. MANILA WATER
COMPANY, INC., RESPONDENT. G.R. No.
217590, March 10. 2020
IRR limiting Contractor's License to 60%
(Filipino) is anticompetitive
Absent any showing that the competition
expected in the construction industry, should
we open the same to foreigners, would be
unfair to our citizens, the industry should not be
restricted to Filipinos only. As opined by the
PCC, it would encourage healthy competition
among local and foreign contractors and the
market will have alternative options
depending on the needs of each construction
project. This will also open opportunities for
development and innovation that the foreign
industry may introduce to our local contractors
to make them more competitive in the world
market.
The Supreme Court agreed with the PCC that it
is an anti-competitive policy (because there is
elimination of competitors thereby substantial
lessening of competition)
In 2015, out of the 1,600 special licenses issued,
only 20 were issued to foreign firms while 4
were issued to joint ventures with foreign
participation. PCC also showed that from 2013-
2015, a large majority of the total licenses
issued during this period did not translate to the
entry of new participants in the construction
industry. Apart from these statistics, and
considering the limited scope of the special
license, the additional burden and expenses of
securing the same scare away foreign investors.
Evidently, the assailed regulation is a deterrent
to the entry of foreign players in the
construction industry.