Regulatory Framework for Business Transactions ATTY. JOHNSON A.H.

ONG, CPA, MBA

RFBT Philippine Competition Act SUMMER 2021
STUDENT HANDOUTS
regular or special: Provided, That at least one (1) shall be a
Philippine Competition Act member of the Philippine Bar with at least ten (10) years of
R.A. 10667 experience in the active practice of law, and at least one (1) shall
be an economist. The Chairperson and the Commissioners who
Declaration of Policy shall have the rank equivalent of cabinet secretary and
The efficiency of market competition as a mechanism for undersecretary, respectively, shall be appointed by the
allocating goods and services is a generally accepted precept. President. (Sec 6)
The State recognizes that past measures undertaken to
liberalize key sectors in the economy need to be reinforced by Scope and Application
measures that safeguard competitive conditions. The State also 1. Apply to any person or entity engaged in any trade, industry
recognizes that the provision of equal opportunities to all and commerce in the Republic of the Philippines.
promotes entrepreneurial spirit, encourages private 2. International trade having direct, substantial, and
investments, facilitates technology development and transfer reasonably foreseeable effects in trade, industry, or
and enhances resource productivity. Unencumbered market commerce in the Republic of the Philippines, including
competition also serves the interest of consumers by allowing those that result from acts done outside the Republic of the
them to exercise their right of choice over goods and services Philippines.
offered in the market.
Pursuant to the constitutional goals for the national economy to Exception:
attain a more equitable distribution of opportunities, income, Combinations or activities of workers or employees nor to
and wealth; a sustained increase in the amount of goods and agreements or arrangements with their employers when such
services produced by the nation for the benefit of the people; combinations, activities, agreements, or arrangements are
and an expanding productivity as the key to raising the quality designed solely to facilitate collective bargaining in respect of
of life for all, especially the underprivileged and the conditions of employment.
constitutional mandate that the State shall regulate or prohibit
monopolies when the public interest so requires and that no Powers and Functions
combinations in restraint of trade or unfair competition shall be The Commission shall have original and primary jurisdiction
allowed, the State shall: over the enforcement and implementation of the provisions of
(a) Enhance economic efficiency and promote free and fair this Act, and its implementing rules and regulations. The
competition in trade, industry and all commercial economic Commission shall exercise the following powers and functions:
activities, as well as establish a National Competition Policy (a) Conduct inquiry, investigate, and hear and decide on
to be implemented by the Government of the Republic of cases involving any violation of this Act and other
the Philippines and all of its political agencies as a whole; existing competition laws motu proprio or upon receipt
(b) Prevent economic concentration which will control the of a verified complaint from an interested party or
production, distribution, trade, or industry that will unduly upon referral by the concerned regulatory agency, and
stifle competition, lessen, manipulate or constrict the institute the appropriate civil or criminal proceedings;
discipline of free markets; and (b) Review proposed mergers and acquisitions, determine
(c) Penalize all forms of anti-competitive agreements, abuse of thresholds for notification, determine the
dominant position and anti-competitive mergers and requirements and procedures for notification, and
acquisitions, with the objective of protecting consumer upon exercise of its powers to review, prohibit mergers
welfare and advancing domestic and international trade and acquisitions that will substantially prevent,
and economic development. (Sec 2, R.A. 10667) restrict, or lessen competition in the relevant market;
(c) Monitor and undertake consultation with stakeholders
Philippine Competition Commission. and affected agencies for the purpose of understanding
To implement the national competition policy and attain the market behavior;
objectives and purposes of this Act, an independent quasi- (d) Upon finding, based on substantial evidence, that an
judicial body is hereby created, which shall be known as the entity has entered into an anti-competitive agreement
Philippine Competition Commission (PCC), hereinafter referred or has abused its dominant position after due notice
to as the Commission, and which shall be organized within sixty and hearing, stop or redress the same, by applying
(60) days after the effectivity of this Act. Upon establishment of remedies, such as, but not limited to, issuance of
the Commission, Executive Order No. 45 designating the injunctions, requirement of divestment, and
Department of Justice as the Competition Authority is hereby disgorgement of excess profits under such reasonable
amended. The Office for Competition (OFC) under the Office of parameters that shall be prescribed by the rules and
the Secretary of Justice shall however be retained, with its regulations implementing this Act;
powers and functions modified pursuant to Section 13 of this (e) Conduct administrative proceedings, impose sanctions,
Chapter. fines or penalties for any noncompliance with or
The Commission shall be an attached agency to the Office of the breach of this Act and its implementing rules and
President. (Sec 5) regulations (IRR) and punish for contempt;
(f) Issue subpoena duces tecum and subpoena ad
Composition of the Commission testificandum to require the production of books,
The Commission shall be composed of a Chairperson and four records, or other documents or data which relate to any
(4) Commissioners. The Chairperson and the Commissioners matter relevant to the investigation and personal
shall be citizens and residents of the Philippines, of good moral appearance before the Commission, summon
character, of recognized probity and independence and must witnesses, administer oaths, and issue interim orders
have distinguished themselves professionally in public, civic or such as show cause orders and cease and desist orders
academic service in any of the following fields: economics, law, after due notice and hearing in accordance with the
finance, commerce or engineering. They must have been in the rules and regulations implementing this Act;
active practice of their professions for at least ten (10) years, (g) Upon order of the court, undertake inspections of
and must not have been candidates for any elective national or business premises and other offices, land and vehicles,
local office in the immediately preceding elections, whether as used by the entity, where it reasonably suspects that
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 ATTY. JOHNSON A.H. ONG, CPA, MBA

relevant books, tax records, or other documents which

relate to any matter relevant to the investigation are PROHIBITED ACTS
kept, in order to prevent the removal, concealment, Prohibited Act
tampering with, or destruction of the books, records, or 1. Anti-Competitive Agreements (Sec 14)
other documents; 2. Abuse of Dominant Position (Sec 15)
(h) Issue adjustment or divestiture orders including orders 3. Non competitive merger or acquisition (Sec 20)
for corporate reorganization or divestment in the
manner and under such terms and conditions as may Anti-Competitive Agreements
be prescribed in the rules and regulations Agreement refers to any type or form of contract, arrangement,
implementing this Act. Adjustment or divestiture understanding, collective recommendation, or concerted action,
orders, which are structural remedies, should only be whether formal or informal, explicit or tacit, written or oral.
imposed: (Sec 4 (b))
(1) Where there is no equally effective behavioral (a) Prohibited per se
remedy; The following agreements, between or among competitors,
(2) Where any equally effective behavioral remedy are per se prohibited:
would be more burdensome for the enterprise (1) Restricting competition as to price, or components
concerned than the structural remedy. Changes to thereof, or other terms of trade;
the structure of an enterprise as it existed before (2) Fixing price at an auction or in any form of bidding
the infringement was committed would only be including cover bidding, bid suppression, bid rotation
proportionate to the substantial risk of a lasting or and market allocation and other analogous practices of
repeated infringement that derives from the very bid manipulation.
structure of the enterprise; The agreement must be between competitors. However, an
(i) Deputize any and all enforcement agencies of the entity that controls, is controlled by, or is under common
government or enlist the aid and support of any private control with another entity or entities, have common
institution, corporation, entity or association, in the economic interests, and are not otherwise able to decide or
implementation of its powers and functions; act independently of each other, shall not be considered
(j) Monitor compliance by the person or entities competitors.
concerned with the cease and desist order or consent (b) Effect based
judgment; The following agreements, between or among competitors
(k) Issue advisory opinions and guidelines on competition which have the object or effect of substantially preventing,
matters for the effective enforcement of this Act and restricting or lessening competition shall be prohibited:
submit annual and special reports to Congress, (1) Setting, limiting, or controlling production, markets,
including proposed legislation for the regulation of technical development, or investment;
commerce, trade, or industry; (2) Dividing or sharing the market, whether by volume of
(l) Monitor and analyze the practice of competition in sales or purchases, territory, type of goods or services,
markets that affect the Philippine economy; implement buyers or sellers or any other means;
and oversee measures to promote transparency and (c) Others
accountability; and ensure that prohibitions and Agreements other than those specified in (a) and (b) of this
requirements of competition laws are adhered to; section which have the object or effect of substantially
(m) Conduct, publish, and disseminate studies and reports preventing, restricting or lessening competition shall also
on anti-competitive conduct and agreements to inform be prohibited
and guide the industry and consumers; Not prohibited
(n) Intervene or participate in administrative and Those which contribute to improving the production or
regulatory proceedings requiring consideration of the distribution of goods and services or to promoting technical
provisions of this Act that are initiated by government or economic progress, while allowing consumers a fair
agencies such as the Securities and Exchange share of the resulting benefits. (Sec 14)
Commission, the Energy Regulatory Commission and
the National Telecommunications Commission; Determination of Anti-Competitive Agreement or Conduct
(o) Assist the National Economic and Development In determining whether anti-competitive agreement or conduct
Authority, in consultation with relevant agencies and has been committed, the Commission shall:
sectors, in the preparation and formulation of a (a) Define the relevant market allegedly affected by the anti-
national competition policy; competitive agreement or conduct, following the principles
(p) Act as the official representative of the Philippine laid out in Section 24 of this Chapter;
government in international competition matters; (b) Determine if there is actual or potential adverse impact on
(q) Promote capacity building and the sharing of best competition in the relevant market caused by the alleged
practices with other competition-related bodies; agreement or conduct, and if such impact is substantial and
(r) Advocate pro-competitive policies of the government outweighs the actual or potential efficiency gains that result
by: from the agreement or conduct;
(1) Reviewing economic and administrative (c) Adopt a broad and forward-looking perspective,
regulations, motu proprio or upon request, as to recognizing future market developments, any overriding
whether or not they adversely affect relevant need to make the goods or services available to consumers,
market competition, and advising the the requirements of large investments in infrastructure, the
concerned agencies against such regulations; requirements of law, and the need of our economy to
and respond to international competition, but also taking
(2) Advising the Executive Branch on the account of past behavior of the parties involved and
competitive implications of government prevailing market conditions;
actions, policies and programs; and (d) Balance the need to ensure that competition is not
(s) Charging reasonable fees to defray the administrative prevented or substantially restricted and the risk that
cost of the services rendered. competition efficiency, productivity, innovation, or
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 ATTY. JOHNSON A.H. ONG, CPA, MBA

development of priority areas or industries in the general (a) The share of the entity in the relevant market and whether
interest of the country may be deterred by overzealous or it is able to fix prices unilaterally or to restrict supply in the
undue intervention; and relevant market;
(e) Assess the totality of evidence on whether it is more likely (b) The existence of barriers to entry and the elements which
than not that the entity has engaged in anti-competitive could foreseeably alter both said barriers and the supply
agreement or conduct including whether the entity’s from competitors;
conduct was done with a reasonable commercial purpose (c) The existence and power of its competitors;
such as but not limited to phasing out of a product or (d) The possibility of access by its competitors or other entities
closure of a business, or as a reasonable commercial to its sources of inputs;
response to the market entry or conduct of a competitor. (e) The power of its customers to switch to other goods or
(Sec 26) services;
(f) Its recent conducts; and
Abuse of Dominant Position (g) Other criteria established by the regulations of this Act.
Dominant position refers to a position of economic strength There shall be a rebuttable presumption of market dominant
that an entity or entities hold which makes it capable of position if the market share of an entity in the relevant market
controlling the relevant market independently from any or a is at least fifty percent (50%), unless a new market share
combination of the following: competitors, customers, threshold is determined by the Commission for that particular
suppliers, or consumers. (Sec 4g) sector.
There is no prohibition on having a dominant position in a The Commission shall from time to time determine and publish
relevant market or on acquiring, maintaining and increasing the threshold for dominant position or minimum level of share
market share through legitimate means that do not in the relevant market that could give rise to a presumption of
substantially prevent, restrict or lessen competition dominant position. In such determination, the Commission
• Relevant market refers to the market in which a particular would consider the structure of the relevant market, degree of
good or service is sold and which is a combination of the integration, access to end-users, technology and financial
relevant product market and the relevant geographic resources, and other factors affecting the control of a market, as
market, defined as follows: provided in subsections (a) to (g) of this section.
(1) A relevant product market comprises all those goods The Commission shall not consider the acquiring, maintaining
and/or services which are regarded as interchangeable and increasing of market share through legitimate means not
or substitutable by the consumer or the customer, by substantially preventing, restricting, or lessening competition
reason of the goods and/or services’ characteristics, in the market such as but not limited to having superior skills,
their prices and their intended use; and rendering superior service, producing or distributing quality
(2) The relevant geographic market comprises the area in products, having business acumen, and the enjoyment and use
which the entity concerned is involved in the supply of protected intellectual property rights as violative of this Act.
and demand of goods and services, in which the (Sec 27)
conditions of competition are sufficiently homogenous
and which can be distinguished from neighboring areas Prohibited
because the conditions of competition are different in It shall be prohibited for one or more entities to abuse their
those areas. dominant position by engaging in conduct that would
o Market refers to the group of goods or services substantially prevent, restrict or lessen competition:
that are sufficiently interchangeable or (a) Selling goods or services below cost with the object of
substitutable and the object of competition, and driving competition out of the relevant market: Provided,
the geographic area where said goods or services That in the Commission’s evaluation of this fact, it shall
are offered. (Sec 4(i)) consider whether the entity or entities have no such object
For purposes of determining the relevant market, the following and the price established was in good faith to meet or
factors, among others, affecting the substitutability among compete with the lower price of a competitor in the same
goods or services constituting such market and the geographic market selling the same or comparable product or service
area delineating the boundaries of the market shall be of like quality.
considered: (b) Imposing barriers to entry or committing acts that prevent
(a) The possibilities of substituting the goods or services in competitors from growing within the market in an anti-
question, with others of domestic or foreign origin, competitive manner except those that develop in the
considering the technological possibilities, extent to which market as a result of or arising from a superior product or
substitutes are available to consumers and time required process, business acumen, or legal rights or laws;
for such substitution; (c) Making a transaction subject to acceptance by the other
(b) The cost of distribution of the good or service, its raw parties of other obligations which, by their nature or
materials, its supplements and substitutes from other areas according to commercial usage, have no connection with
and abroad, considering freight, insurance, import duties the transaction;
and non-tariff restrictions; the restrictions imposed by (d) Setting prices or other terms or conditions that
economic agents or by their associations; and the time discriminate unreasonably between customers or sellers of
required to supply the market from those areas; the same goods or services, where such customers or
(c) The cost and probability of users or consumers seeking sellers are contemporaneously trading on similar terms
other markets; and and conditions, where the effect may be to lessen
(d) National, local or international restrictions which limit competition substantially.
access by users or consumers to alternate sources of supply Permissible price differentials:
or the access of suppliers to alternate consumers. (Sec 24) (1) Socialized pricing for the less fortunate sector of the
economy;
Market Dominant Position (2) Price differential which reasonably or approximately
In determining whether an entity has market dominant position reflect differences in the cost of manufacture, sale, or
for purposes of this Act, the Commission shall consider the delivery resulting from differing methods, technical
following:
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conditions, or quantities in which the goods or services Commission. (Sec 16) Merger or acquisition agreements that
are sold or delivered to the buyers or sellers; substantially prevent, restrict or lessen competition in the
(3) Price differential or terms of sale offered in response to relevant market or in the market for goods or services as may
the competitive price of payments, services or changes be determined by the Commission shall be prohibited. (Sec 20)
in the facilities furnished by a competitor; and However, prohibited merger or acquisition agreement may,
(4) Price changes in response to changing market nonetheless, be exempt from prohibition by the Commission
conditions, marketability of goods or services, or when the parties establish either of the following:
volume; a. The concentration has brought about or is likely to bring
(e) Imposing restrictions on the lease or contract for sale or about gains in efficiencies that are greater than the effects
trade of goods or services concerning where, to whom, or in of any limitation on competition that result or likely to
what forms goods or services may be sold or traded, such result from the merger or acquisition agreement; or
as fixing prices, giving preferential discounts or rebate A party seeking to rely on this exemption must demonstrate
upon such price, or imposing conditions not to deal with that if the agreement were not implemented, significant
competing entities, where the object or effect of the efficiency gains would not be realized. (Sec 22)
restrictions is to prevent, restrict or lessen competition b. A party to the merger or acquisition agreement is faced with
substantially: Provided, That nothing contained in this Act actual or imminent financial failure, and the agreement
shall prohibit or render unlawful: represents the least anti-competitive arrangement among
(1) Permissible franchising, licensing, exclusive the known alternative uses for the failing entity’s assets:
merchandising or exclusive distributorship The burden of proof for the exemption lies with the parties
agreements such as those which give each party the seeking the exemption (Sec 22)
right to unilaterally terminate the agreement; or Provided, That an entity shall not be prohibited from continuing
(2) Agreements protecting intellectual property rights, to own and hold the stock or other share capital or assets of
confidential information, or trade secrets; another corporation which it acquired prior to the approval of
(f) Making supply of particular goods or services dependent this Act or acquiring or maintaining its market share in a
upon the purchase of other goods or services from the relevant market through such means without violating the
supplier which have no direct connection with the main provisions of this Act:
goods or services to be supplied; Provided, further, That the acquisition of the stock or other
(g) Directly or indirectly imposing unfairly low purchase prices share capital of one or more corporations solely for investment
for the goods or services of, among others, marginalized and not used for voting or exercising control and not to
agricultural producers, fisherfolk, micro-, small-, medium- otherwise bring about, or attempt to bring about the
scale enterprises, and other marginalized service providers prevention, restriction, or lessening of competition in the
and producers; relevant market shall not be prohibited. (Sec 21)
(h) Directly or indirectly imposing unfair purchase or selling In determining the control of an entity, the Commission may
price on their competitors, customers, suppliers or consider the following:
consumers, provided that prices that develop in the market Control is presumed to exist when the parent owns directly or
as a result of or due to a superior product or process, indirectly, through subsidiaries, more than one half (1/2) of the
business acumen or legal rights or laws shall not be voting power of an entity, unless in exceptional circumstances,
considered unfair prices; and it can clearly be demonstrated that such ownership does not
(i) Limiting production, markets or technical development to constitute control. Control also exists even when an entity owns
the prejudice of consumers, provided that limitations that one half (1/2) or less of the voting power of another entity
develop in the market as a result of or due to a superior when:
product or process, business acumen or legal rights or laws (a) There is power over more than one half (1/2) of the voting
shall not be a violation of this Act: rights by virtue of an agreement with investors;
Any conduct which contributes to improving production or (b) There is power to direct or govern the financial and
distribution of goods or services within the relevant market, or operating policies of the entity under a statute or
promoting technical and economic progress while allowing agreement;
consumers a fair share of the resulting benefit may not (c) There is power to appoint or remove the majority of the
necessarily be considered an abuse of dominant position. members of the board of directors or equivalent governing
However, this shall not constrain the Commission or the body;
relevant regulator from pursuing measures that would promote (d) There is power to cast the majority votes at meetings of the
fair competition or more competition as provided in this Act. board of directors or equivalent governing body;
(Sec 15) (e) There exists ownership over or the right to use all or a
significant part of the assets of the entity;
MERGERS AND ACQUISITIONS (f) There exist rights or contracts which confer decisive
influence on the decisions of the entity. (Sec 25)
Merger and acquisition
1. Merger refers to the joining of two (2) or more entities into
an existing entity or to form a new entity. (Sec 4(j)) Procedure
2. Acquisition refers to the purchase of securities or assets, 1. Pre notification
through contract or other means, for the purpose of 2. Notification proper
obtaining control by: a. Phase 1
a. One (1) entity of the whole or part of another; b. Phase 2
b. Two (2) or more entities over another; or 3. Action
c. One (1) or more entities over one (1) or more entities.
(Sec 4 (a)) a. Pre Notification
a. Inform the Commission of their proposed merger or
Power of Commission to review merger and acquisition acquisition and request a prenotification consultation
The Commission shall have the power to review mergers and with the staff of the Commission.
acquisitions based on factors deemed relevant by the
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b. the parties may seek nonbinding advice on the specific shall be deemed approved and the parties may proceed to
information that is required to be in the notification. implement or consummate it.
All notices, documents and information provided to or
b. Notification Proper emanating from the Commission under this section shall be
Phase 1 Review subject to confidentiality rule under Section 34 of this Act
a. Each party to a merger or acquisition shall submit except when the release of information contained therein is
the Notification Form and pay the applicable fees. with the consent of the notifying entity or is mandatorily
b. The PCC determine the completeness of the Form required to be disclosed by law or by a valid order of a court of
and other relevant requirements within 15 days. competent jurisdiction, or of a government or regulatory
Phase 2 agency, including an exchange.
a. Commencement of waiting period of 30 days. In the case of the merger or acquisition of banks, banking
the Commission shall, if necessary, inform the institutions, building and loan associations, trust companies,
parties of the need for a more comprehensive and insurance companies, public utilities, educational institutions
detailed analysis of the merger or acquisition. and other special corporations governed by special laws, a
b. The issuance of the request has the effect of favorable or no-objection ruling by the Commission shall not be
extending the period within which the agreement construed as dispensing of the requirement for a favorable
may not be consummated for an additional sixty recommendation by the appropriate government agency under
(60) days but not to exceed ninety (90). Section 79 of the Corporation Code of the Philippines.
c. The PCC will assess and evaluate the proposes A favorable recommendation by a governmental agency with a
merger or acquisition. competition mandate shall give rise to a disputable
c. Action presumption that the proposed merger or acquisition is not
a. Approved or failed to act within the period violative of this Act.
• Merger or acquisition agreements that have
received a favorable ruling from the Commission, Notification Threshold
except when such ruling was obtained on the basis The Commission shall, from time to time, adopt and publish
of fraud or false material information, may not be regulations stipulating:
challenged. (Sec 23) a. The transaction value threshold and such other criteria
b. Prohibit the merger or acquisition subject to the notification requirement of Section 17 of this
(a) Prohibit the implementation of the agreement; Act;
(b) Prohibit the implementation of the agreement b. The information that must be supplied for notified merger
unless and until it is modified by changes specified or acquisition;
by the Commission. c. Exceptions or exemptions from the notification
(c) Prohibit the implementation of the agreement requirement; and
unless and until the pertinent party or parties d. Other rules relating to the notification procedures. (Sec 19)
enter into legally enforceable agreements specified
by the Commission. (Sec 18) Forbearance
The Commission may forbear from applying the provisions of
Compulsory Notification this Act, for a limited time, in whole or in part, in all or specific
Parties to the merger or acquisition agreement referred to in the cases, on an entity or group of entities, if in its determination:
preceding section wherein the value of the transaction exceeds a. Enforcement is not necessary to the attainment of the policy
one billion pesos (P1,000,000,000.00) are prohibited from objectives of this Act;
consummating their agreement until thirty (30) days after b. Forbearance will neither impede competition in the market
providing notification to the Commission in the form and where the entity or group of entities seeking exemption
containing the information specified in the regulations issued operates nor in related markets; and
by the Commission. (Sec 17) c. Forbearance is consistent with public interest and the
benefit and welfare of the consumers.
Administrative Penalty for prohibitive consummation of A public hearing shall be held to assist the Commission in
merger or acquisition making this determination.
An agreement consummated in violation of this requirement to The Commission’s order exempting the relevant entity or group
notify the Commission shall be considered void and subject the of entities under this section shall be made public. Conditions
parties to an administrative fine of one percent (1%) to five may be attached to the forbearance if the Commission deems it
percent (5%) of the value of the transaction. appropriate to ensure the long-term interest of consumers.
In the event that the basis for the issuance of the exemption
Effect when the commission request for further order ceases to be valid, the order may be withdrawn by the
information Commission. (Sec 28)
Before the expiration of the thirty (30)
• Should the Commission deem it necessary, it may request Administrative Penalties
further information that are reasonably necessary and Violation Penalty
directly relevant to the prohibited merger or acquisition. a. Anti competitive First offense: Fine of up to
• The issuance of such a request has the effect of extending agreement one hundred million pesos
the period within which the agreement may not be b. Abuse of dominant (P100,000,000.00);
consummated for an additional sixty (60) days, beginning position Second offense: Fine of not
on the day after the request for information is received by c. Failure of compulsory less than one hundred
the parties. notification million pesos
• That, in no case shall the total period for review by the d. Prohibited merger or (P100,000,000.00) but not
Commission of the subject agreement exceed ninety (90) acquisition more than two hundred
days from initial notification by the parties. fifty million pesos
When the above periods have expired and no decision has been (P250,000,000.00).
promulgated for whatever reason, the merger or acquisition
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In fixing the amount of the The Commission, after considering the statements made, or
fine, the Commission shall documents or articles produced in the course of the fact-finding
have regard to both the or preliminary inquiry, shall terminate the same by:
gravity and the duration of a. Issuing a resolution ordering its closure if no violation or
the violation. infringement of this Act is found; or
b. Issuing a resolution to proceed, on the basis of reasonable
Failure to Comply With an Not less than fifty thousand grounds, to the conduct of a full administrative
Order of the Commission pesos (P50,000.00) up to investigation.
two million pesos The Commission, after due notice and hearing, and on the basis
(P2,000,000.00) for each of facts and evidence presented, may issue an order for the
violation and a similar temporary cessation or desistance from the performance of
amount of penalty for each certain acts by the respondent entity, the continued
day thereafter until the said performance of which would result in a material and adverse
entity fully complies. effect on consumers or competition in the relevant market.
Provided that these fines If the evidence so warrants, the Commission may file before the
shall only accrue daily DOJ criminal complaints for violations of this Act or relevant
beginning forty-five (45) laws for preliminary investigation and prosecution before the
days from the time that the proper court. The DOJ shall conduct such preliminary
said decision, order or investigation in accordance with the Revised Rules of Criminal
ruling was received. Procedure.
Supply of Incorrect or fines of up to one million The preliminary inquiry shall, in all cases, be completed by the
Misleading Information pesos (PI,000,000.00) Commission within ninety (90) days from submission of the
intentionally or negligently verified complaint, referral, or date of initiation by the
Any other violations fine of not less than fifty Commission, motu proprio, of the same.
thousand pesos No law enforcement agency shall conduct any kind of fact-
(P50,000.00) up to two finding, inquiry or investigation into any competition-related
million pesos matters except when such government agency is deputized by
(P2,000,000.00). the PPC. (Sec 31)
The schedule of fines indicated shall be increased by the Any person who suffers direct injury by reason of any violation
Commission every five (5) years to maintain their real value of this Act may institute a separate and independent civil action
from the time it was set. (Sec 29) after the Commission has completed the preliminary inquiry.
If the violation involves the trade or movement of basic (Sec 45)
necessities and prime commodities as defined by Republic Act
No. 7581, as amended, the fine imposed by the Commission or Relationship With Sector Regulators
the courts, as the case may be, shall be tripled. (Sec 41) The Commission shall have original and primary jurisdiction in
the enforcement and regulation of all competition-related
Criminal Penalties issues.
Violation Penalty The Commission shall still have jurisdiction if the issue involves
Anticompetitive Imprisonment from two (2) both competition and noncompetition issues, but the concerned
agreement to seven (7) years, and a fine sector regulator shall be consulted and afforded reasonable
a. Prohibited per se of not less than fifty million opportunity to submit its own opinion and recommendation on
b. Effect based pesos (P50,000,000.00) but the matter before the Commission makes a decision on any case.
not more than two hundred Where appropriate, the Commission and the sector regulators
fifty million pesos shall work together to issue rules and regulations to promote
(P250,000,000.00). competition, protect consumers, and prevent abuse of market
When the entities involved are juridical persons, the penalty of. power by dominant players within their respective sectors. (Sec
imprisonment shall be imposed on its officers, directors, or 32)
employees holding managerial positions, who are knowingly
and willfully responsible for such violation. (Sec 30) Power to Investigate and Enforce Orders and Resolutions
The Commission shall conduct inquiries by administering oaths,
Statute of Limitations issuing subpoena duces tecum and summoning witnesses, and
Any action arising from a violation of any provision of this Act commissioning consultants or experts. It shall determine if any
shall be forever barred unless commenced within five (5) years provision of this Act has been violated, enforce its orders and
from: carry out its resolutions by making use of any available means,
a. For criminal actions, the time the violation is discovered by provisional or otherwise, under existing laws and procedures
the offended party, the authorities, or their agents; and including the power to punish for contempt and to impose fines.
b. For administrative and civil actions, the time the cause of (Sec 33)
action accrues. (Sec 46)
Confidentiality of Information
ENFORCEMENT Confidential business information refers to information which
concerns or relates to the operations, production, sales,
Fact Finding; Preliminary Inquiry shipments, purchases, transfers, identification of customers,
The Commission, motu proprio, or upon the filing of a verified inventories, or amount or source of any income, profits, losses,
complaint by an interested party or upon referral by a expenditures. (Sec 4 (e))
regulatory agency, shall have the sole and exclusive authority to Confidential business information submitted by entities,
initiate and conduct a fact-finding or preliminary inquiry for the relevant to any inquiry or investigation being conducted
enforcement of this Act based on reasonable grounds. pursuant to this Act as well as any deliberation in relation
thereto, shall not, in any manner, be directly or indirectly
disclosed, published, transferred, copied, or disseminated.
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 ATTY. JOHNSON A.H. ONG, CPA, MBA

Likewise, the Commission shall, to the extent possible, subject The DOJ-OFC may likewise grant leniency or immunity as
such information to the confidentiality rule provided under this provided in this section in the event that there is already a
section when it issues notices, bulletins, rulings and other preliminary investigation pending before it. (Sec 35)
documents: Provided., That the confidentiality rule shall not
apply if the notifying entity consents to the disclosure, or the Nolo Contendere
document or information is mandatorily required to be An entity charged in a criminal proceeding may enter a plea
disclosed by law or by a valid order of a court of competent of Nolo Contendere, in which he does not accept nor deny
jurisdiction or of a government or regulatory agency, including responsibility for the charges but agrees to accept punishment
an exchange. The identity of the persons who provide as if he had pleaded guilty for violation of anti competitive
information to the Commission under condition of anonymity, agreement per se and effect based. The plea cannot be used
shall remain confidential, unless such confidentiality is against the defendant entity to prove liability in a civil suit
expressly waived by these persons. arising from the criminal action nor in another cause of
Any violation of this provision shall be imposed a fine of not less action: Provided, That a plea of Nolo Contendere may be entered
than one million pesos (PI,000,000.00) but not more than five only up to arraignment and subsequently, only with the
million pesos (P5,000,000.00). (Sec 34) permission of the court which shall accept it only after weighing
its effect on the parties, the public and the administration of
Leniency Program justice. (Sec 36)
The Commission shall develop a Leniency Program to be
granted to any entity in the form of immunity from suit or Non-Adversarial Remedies
reduction of any fine which would otherwise be imposed on a As an implementing and enforcement policy, the Commission
participant in an anti-competitive agreement as provided in shall, under such rules and regulations it may prescribe,
Section 14(a) and 14(b) of this Act in exchange for the voluntary encourage voluntary compliance with this Act and other
disclosure of information regarding such an agreement which competition laws by making available to the parties concerned
satisfies specific criteria prior to or during the fact-finding or the following and other analogous non-adversarial
preliminary inquiry stage of the case. administrative remedies, before the institution of
Immunity from suit will be granted to an entity reporting illegal administrative, civil or criminal action:
anti-competitive activity before a fact-finding or preliminary a. Binding Ruling. — Where no prior complaint or
inquiry has begun if the following conditions are met: investigation has been initiated, any entity that is in doubt
a. At the time the entity comes forward, the Commission has as to whether a contemplated act, course of conduct,
not received information about the activity from any other agreement, or decision, is in compliance with, is exempt
source; from, or is in violation of any of the provisions of this Act,
b. Upon the entity’s discovery of illegal activity, it took prompt other competition laws, or implementing rules and
and effective action to terminate its participation therein; regulations thereof, may request the Commission, in
c. The entity reports the wrongdoing with candor and writing, to render a binding ruling thereon: Provided, That
completeness and provides full, continuing, and complete the ruling is for a specified period, subject to extension as
cooperation throughout the investigation; and may be determined by the Commission, and based on
d. The entity did not coerce another party to participate in the substantial evidence.
activity and clearly was not the leader in, or the originator In the event of an adverse binding ruling on an act, course
of, the activity. or conduct, agreement, or decision, the applicant shall be
Even after the Commission has received information about the provided with a reasonable period, which in no case shall
illegal activity after a fact-finding or preliminary inquiry has be more than ninety (90) days, to abide by the ruling of the
commenced, the reporting entity will be granted leniency, Commission and shall not be subject to administrative, civil,
provided preceding conditions (b) and (c) and the following or criminal action unless the applicant fails to comply with
additional requirements are complied with: the provisions of this Act;
1. The entity is the first to come forward and qualify for b. Show Cause Order. — Upon preliminary findings motu
leniency; proprio or on written complaint under oath by an
2. At the time the entity comes forward, the Commission does interested party that any entity is conducting its business,
not have evidence against the entity that is likely to result in whole or in part in a manner that may not be in accord
in a sustainable conviction; and with the provisions of this Act or other competition laws,
3. The Commission determines that granting leniency would and it finds that the issuance of a show cause order would
not be unfair to others. be in the interest of the public, the Commission shall issue
Such program shall include the immunity from any suit or and serve upon such entity or entities a written description
charge of affected parties and third parties, exemption, waiver, of its business conduct complained of, a statement of the
or gradation of fines and/or penalties giving precedence to the facts, data, and information together with a summary of the
entity submitting such evidence. An entity cooperating or evidence thereof, with an order requiring the said entity or
furnishing information, document or data to the Commission in entities to show cause, within the period therein fixed, why
connection to an investigation being conducted shall not be no order shall issue requiring such person or persons to
subjected to any form of reprisal or discrimination. Such cease and desist from continuing with its identified
reprisal or discrimination shall be considered a violation of this business conduct, or pay the administrative fine therein
Act subject to the sanctions provided in this Act. specified, or readjust its business conduct or practices;
Nothing in this section shall preclude prosecution for entities c. Consent Order. – At any time prior to the conclusion by the
that report to the Commission false, misleading, or malicious Commission of its inquiry, any entity under inquiry may,
information, data or documents damaging to the business or without in any manner admitting a violation of this Act or
integrity of the entities under inquiry as a violation of said any other competition laws, submit to the Commission a
section. An entity found to have reported false, misleading or written proposal for the entry of a consent order, specifying
malicious information, data, or document may be penalized by therein the terms and conditions of the proposed consent
a fine not less than the penalty imposed in the section reported order which shall include among others the following:
to have been violated by the entity complained of. 1. The payment of an amount within the range of fines
provided for under this Act;
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 ATTY. JOHNSON A.H. ONG, CPA, MBA

2. The required compliance report as well as an entity to

submit regular compliance reports; Indemnity
3. Payment of damages to any private party/parties who Unless the actions of the Commission or its Chairperson, any of
may have suffered injury; and its Commissioners, officers, employees and agents are found to
4. Other terms and conditions that the Commission be in willful violation of this Act, performed with evident bad
deems appropriate and necessary for the effective faith or gross negligence, the Commission, its Chairperson,
enforcement of this Act or other Competition Laws: Commissioners, officers, employees and agents are held free
Provided, That a consent order shall not bar any inquiry and harmless to the fullest extent permitted by law from any
for the same or similar acts if continued or repeated; liability, and they shall be indemnified for any and all liabilities,
d. Monitoring of Compliance. – The Commission shall monitor losses, claims, demands, damages, deficiencies, costs and
the compliance by the entity or entities concerned, their expenses of whatsoever kind and nature that may arise in
officers, and employees, with the final and executory connection with the exercise of their powers and performance
binding ruling, cease and desist order, or approval of a of their duties and functions.
consent judgment. Upon motion of an interested The Commission shall underwrite or advance litigation costs
party/parties, the Commission shall issue a certification or and expenses, including legal fees and other expenses of
resolution to the effect that the entity or entities concerned external counsel, or provide legal assistance to its Chairperson,
have, or have not, as the case may be, complied with a final Commissioners, officers, employees, or agents in connection
and executory ruling, order, or approval. with any civil, criminal, administrative or any other action or
e. Inadmissibility of Evidence in Criminal Proceedings. – The proceeding, to which they are made a party by reason of, or in
request for a binding ruling, the show cause order, or the connection with, the exercise of authority or performance of
proposal for consent order; the facts, data, and information duties and functions under this Act: Provided, That such legal
therein contained or subsequently supplied by the entity or protection shall not apply to any civil, criminal, administrative,
entities concerned; admissions, oral or written, made by or any action or proceeding that may be initiated by the
them against their interest; all other documents filed by Commission, against such Chairperson, Commissioners,
them, including their evidence presented in the officers, employees, or agents: Provided, further, That the
proceedings before the Commission; and the judgment or Chairperson, Commissioners, officers, employees, or agents,
order rendered thereon; shall not be admissible as evidence who shall resign, retire, transfer to another agency or be
in any criminal proceedings arising from the same act separated from the service, shall continue to be provided with
subject of the binding ruling, show cause order or consent such legal protection in connection with any act done or omitted
order against such entity or entities, their officers, to be done by them in good faith during their tenure or
employees, and agents. (Sec 37) employment with the Commission: Provided, finally, That in the
event of a settlement or compromise, indemnification shall be
Contempt provided only in connection with such matters covered by the
The Commission may summarily punish for contempt by settlement as to which the Commission is advised by counsel
imprisonment not exceeding thirty (30) days or by a fine not that the persons to be indemnified did not commit any
exceeding one hundred thousand pesos (P 100,000.00), or both, negligence or misconduct.
any entity guilty of such misconduct in the presence of the The costs and expenses incurred in defending the
Commission in its vicinity as to seriously interrupt any hearing, aforementioned action, suit or proceeding may be paid by the
session or any proceeding before it, including cases in which an Commission in advance of the final disposition of such action,
entity willfully fails or refuses, without just cause, to comply suit or proceeding upon receipt of an undertaking by or on
with a summons, subpoena or subpoena duces tecum legally behalf of the Chairperson, Commissioner, officer, employee, or
issued by the Commission being present at a hearing, agent to repay the amount advanced should it ultimately be
proceeding, session or investigation, refused to be sworn as a determined by the Commission that one is not entitled to be
witness or to answer questions or to furnish information when indemnified as provided in this section. (Sec 43)
lawfully required to do so. (Sec 38)
Jurisdiction of the Regional Trial Court
Appeals of the Decisions of the Commission The Regional Trial Court of the city or province where the entity
Decisions of the Commission shall be appealable to the Court of or any of the entities whose business act or conduct Constitutes
Appeals in accordance with the Rules of Court. The appeal shall the subject matter of a case, conducts its principal place of
not stay the order, ruling or decision sought to be reviewed, business, shall have original and exclusive jurisdiction,
unless the Court of Appeals shall direct otherwise upon such regardless of the penalties and fines herein imposed, of all
terms and conditions it may deem just. In the appeal, the criminal and civil cases involving violations of this Act and other
Commission shall be included as a party respondent to the case. competition-related laws. If the defendant or anyone is charged
(Sec 39) in the capacity of a director, officer, shareholder, employee, or
agent of a corporation or other juridical entity who knowingly
Writ of Execution and willfully authorized the commission of the offense charged,
Upon the finality of its binding ruling, order, resolution, the Regional Trial Court of the city or province where such
decision, judgment, or rule or regulation, collectively, the corporation or juridical entity conducts its principal place of
Commission may issue a writ of execution to enforce its decision business, shall have jurisdiction. (Sec 44)
and the payment of the administrative fines provided in the
preceding sections. (Sec 40) Prohibition on the Issuance of Temporary Restraining
Orders, Preliminary Injunctions and Preliminary
Immunity from Suit Mandatory Injunctions
The Chairperson, the Commissioners, officers, employees and Except for the Court of Appeals and the Supreme Court, no other
agents of the Commission shall not be subject to any action, court shall issue any temporary restraining order, preliminary
claim or demand in connection with any act done or omitted by injunction or preliminary mandatory injunction against the
them in the performance of their duties and exercise of their Commission in the exercise of its duties or
powers except for those actions and omissions done in evident functions: Provided, That, this prohibition shall apply in all
bad faith or gross negligence. (Sec 42) cases, disputes or controversies instituted by a private party,
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 ATTY. JOHNSON A.H. ONG, CPA, MBA

including, but not limited to, cases filed by entities or those

claiming to have rights through such entities: Provided,
however, That, this prohibition shall not apply when the matter
is of extreme urgency involving a constitutional issue, such that
the non-issuance of a temporary restraining order will result in
grave injustice and irreparable injury to the public: Provided,
further, That, the applicant shall file a bond, in an amount to be
fixed by the Court, but in no case shall it exceed twenty percent
(20%) of the imposable fines provided for under Chapter VI,
Section 29 of this Act: Provided, finally, That in the event that the
court finally decides that the applicant was not entitled to the
relief applied for, the bond shall accrue in favor of the
Commission.
Any temporary restraining order, preliminary injunction or
preliminary mandatory injunction issued in violation of this
section is void and of no force and effect. Any judge who violates
this section shall be penalized by suspension of at least one (1)
year without pay in addition to other criminal, civil or
administrative penalties. (Sec 47)

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