Issue 16 | october - december 2019 PHILIPPINE COMPETITION BULLETIN What’s Inside 2 PCC IN 2019: STRONGER COMPETITION ENFORCEMENT FOR A GROWING ECONOMY 3 Supreme Court ADDS DAWN RAIDS TO PCC ARSENAL 6 adb funds PCC project on Capacity Building to Foster Competition 1 PCC IN 2019 STRONGER COMPETITION ENFORCEMENT FOR A GROWING ECONOMY In 2019, the Philippine Competition Commission (PCC) sustained its momentum in enforcing the competition law in pursuit of its mandate to prohibit anti-competitive agreements, abuse of market dominance, and anti- competitive mergers and acquisitions. First merger prohibition PCC blocked Universal Robina Corporation’s proposed acquisition of Central Azucarera Don Pedro as it would substantially lessen competition in the market for sugarcane milling services in Southern Luzon. The prohibition of the transaction prevented the creation of a monopoly that could significantly harm the welfare of sugarcane farmers in Batangas, Laguna, Cavite, and Quezon. jan Leniency Program In a bid to strengthen its enforcement mechanisms, PCC launched its leniency program, offering either immunity from suit or reduction of administrative fines to an entity that was or is a participant in price-fixing, bid-rigging, market-allocation, or output-restriction agreements, in exchange for the entity’s voluntary disclosure of information regarding such agreements. Expedited Merger Review Rules In line with government efforts to improve ease of doing business in the country, PCC launched an expedited review process for mergers and acquisitions (M&As) that are less likely to substantially prevent, restrict, or lessen competition in the relevant jun market. Under the expedited process, review of qualified M&A transactions will take only 15 working days, instead of the 30 calendar-day turnaround time for regular Phase 1 review prescribed by the Philippine Competition Act. Exemption from compulsory notification of solicited PPP projects PCC issued the Rules for Solicited Public-Private Partnership (PPP) Projects, under which joint ventures of private entities formed for a solicited PPP project may be jul exempted from compulsory notification. First abuse of dominance case In a landmark development on competition law enforcement in the Philippines, PCC closed its first abuse of dominance case, ordering the termination of the exclusive oct deal between Urban Deca Homes and its in-house internet service provider (ISP) Fiber to Deca Homes in nine projects across the country. Issuance of the Rule on Administrative Search and Inspection The Supreme Court of the Philippines released a resolution approving the Rule on Administrative Search and Inspection under the PCA, effectively adding the conduct nov of dawn raids to the arsenal of tools PCC can use in investigating violations of the country’s antitrust law. For more details on PCC’s accomplishments, the 2019 Year-End Report can be accessed at https://phcc.gov.ph/press-releases/pcc-year-end-report-2019/ 2 Supreme Court ADDS DAWN RAIDS TO PCC ARSENAL by Ryan Israel T. Advincula PCC, in partnership with the World Bank Group and the Fr. Joaquin G. Bernas SJ Institute for Continuing Legal Education, conducted a half-day seminar on the Rule on Administrative Search and Inspection on December 4 at the Ateneo Professional Schools in Makati. Participants were compliance officers, lawyers, and antitrust law practitioners. The Supreme Court (SC) of for strengthening our armory special commercial courts shall the Philippines released a of investigative tools to detect, have concurrent jurisdiction resolution approving the Rule investigate, and prosecute within their respective territorial on Administrative Search and anti-competitive agreements jurisdictions. Inspection under the Philippine and conduct. The rules strike a Competition Act (PCA). The balance between due process Information subject to SC action effectively adds the and public interest in enforcing inspection includes books, tax conduct of dawn raids to the the competition law,” said PCC records, documents, papers, arsenal of tools the Philippine Chair Arsenio Balisacan. accounts, letters, photographs, Competition Commission databases (including means (PCC) can use in investigating “Cartels operate on clandestine of accessing information violations of the country’s arrangements or so-called contained in such databases), antitrust law. gentleman’s agreements that and other electronically stored ultimately affect prices and information. PCC dawn raids will be hurt consumer welfare. With unannounced visits to business the rules on dawn raids now The rules were drafted by an SC operations, aimed at finding in place, PCC can intensify its special committee composed information on possible anti- case building, uncover anti- of Justice (now Chief Justice) competitive conduct and competitive behavior, and pin Diosdado Peralta (chair), practices. These may involve down such white-collar crimes Justice Alexander Gesmundo searching documents stored covered by the Philippine (vice chair), Justice Ramon online and offline, as well Competition Act,” Balisacan Paul Hernando, and Court as questioning officials and added. Administrator Midas Marquez, employees of a business. all of the Supreme Court; and According to the rules, Commissioners Amabelle While the PCA has a built- dawn raids are enforceable Asuncion, Johannes Bernabe, in clause on dawn raids, it nationwide, but may be and Macario de Claro, Jr., and required an enabling order from commenced only after the Attys. Rigor Pascual, Genevieve the court. The SC resolution issuance of an inspection order, Jusi, and Gifany Tongohan, all of activated that clause beginning which is requested at special PCC. November 16, 2019. commercial courts in Quezon City, Manila, Makati, Pasig, Cebu continued on page 7 “The PCC extends its profound City, Iloilo City, Davao City, and thanks to the Supreme Court Cagayan de Oro City. Other 3 Advocacy roundup PHilippines, CHINA COMPETITION AUTHORITIES INK MOU ON COOPERATION PCC officials, led by Chair Arsenio M. Balisacan (fifth from left), are joined by top state executives of China’s State Administration for Market Regulation headed by Minister Xiao Yaqing (sixth from left) during the signing of the MOU for cooperation between both agencies. The Philippine Competition cooperation is essential to Commission (ACCC), and hosted Commission (PCC) and the safeguarding competition in a study visit for the Myanmar State Administration for today’s increasingly borderless Competition Commission Market Regulation (SAMR) and dynamic markets,” said (MmCC). of the People’s Republic of Balisacan. China signed this November a “The PCC considers foreign memorandum of understanding The move is part of PCC’s competition authorities as (MoU) on technical cooperation. efforts to work closely with its partners and allies toward our The agreement is expected international counterparts and shared commitment to promote to strengthen bilateral ties on of its active engagement with and protect competitive markets competition law enforcement. the ASEAN Experts Group on and combat cross-border Competition, the International cartels,” Balisacan said. PCC Chair Arsenio Balisacan Competition Network and SAMR Minister Xiao Yaqing (ICN), the United Nations The MoU also enables PCC led the signing ceremony, Conference on Trade and and SAMR to provide a agreeing to lay down a general Development (UNCTAD), and mechanism to conduct joint framework for cooperation the Organisation for Economic dialogues on economic issues in competition enforcement, Co-operation and Development and developments in their including exchange of (OECD) Competition Division. respective competition policies, information, coordination as well as on other matters of of enforcement activities, Earlier this year, PCC mutual interest. notification of cases of mutual coordinated with the interest, as well as technical Competition and Consumer SAMR is China’s consolidated cooperation and capacity Commission of Singapore state agency exercising market building. (CCCS) on the Grab and Uber supervision responsibilities merger case, carried out spanning competition, “Our MoU marks the start exchange programs with the intellectual property, business of a productive partnership Korea Fair Trade Commission registration, and product safety between PCC and SAMR, (KFTC) and the Australian and standards, among others. recognizing that international Competition and Consumer – L. Gorosin BALISACAN HIGHLIGHTS INTEGRATION of COMPETITION POLICY and CONSUMER PROTECTION at NEW YORK ANTITRUST CONFERENCE Philippine Competition consensus that competition for the Competition Committee, Commission Chairman Arsenio policy and consumer protection Organisation for Economic Co- M. Balisacan represented the have much in common. He operation and Development. country at the Antitrust and advised caution, however, Developing and Emerging noting the need to determine Founded in 2004, Concurrences Economies conference held what is driving this integration. is an independent legal at the New York University He said that while competition publisher dedicated to antitrust School of Law on November policy and consumer protection law and competition economics. 1. This annual high-level event help to prevent deceptive It has offices in Paris, London, is organized by Concurrences, marketing and advertising, and New York. an independent antitrust law putting the two under one – R. Advincula publisher. agency roof may not be ideal for some developing nations. In