1. Towards a Philippine Anti-Trust/Competition Policy Legal and Regulatory Framework

2. Anti-Trust Laws and Regulations in the Philippines ”The State shall regulate or prohibit monopolies when the public interest so requires. No combinations in restraint of trade or unfair competition shall be allowed.” - Article XII, Section 19 of the Constitution

3. Revised Penal Code - Punishes anticompetitive behavior criminal in nature, monopolies, combinations in restraint of trade and other frauds in commerce and industry Existing Laws incorporating Antitrust/Competition Policy

4. Civil Code - Allows for collection of damages from unfair competition in agricultural, commercial or industrial enterprises or in labor, from abuse in the exercise of rights and in the performance of duties, but does not define unfair competition Existing Laws incorporating Antitrust/Competition Policy

5. Intellectual Property Code of the Philippines -Protection of patents, trademarks, copyrights, and the corresponding penalties for infringement Special Laws

6. Corporation Code -Provides for rules on mergers and consolidations - However, it does not address the problem of probable abuse of a dominant position when horizontal mergers occur (Abad, 2002) Special Laws

7. Securities Regulation Code -Prohibits and penalizes the manipulation of security prices and insider trading Price Act - Defines and identifies illegal acts of price manipulation such as hoarding, profiteering and cartels, and seeks stabilization of prices of basic commodities through price controls and mandated ceiling mechanisms Special Laws

8. Consumer Act of the Philippines - Covers deceptive, unfair, and unconscionable sales acts and practices, consumer credit transactions, and penalties for violations, to protect consumer product quality and safety standards Special Laws

9. Agreement on the Implementation of Article VI of GATT 1994 on anti-dumping Agreement on Subsidies and Countervailing Measures Agreement on Safeguards General Agreement on Trade in Services (GATS), particularly on supply of services by a monopolist International Commitments

10. Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), particularly on abuse of IPR by rights holders and on licensing practices and conditions of use Agreement on Trade-Related Investment Measures (TRIMS), particularly on amending TRIMS to be complemented with investment policy and competition policy International Commitments

11. Gokongwei Jr. v SEC, 89 SCRA 336 (1979) “A ‘monopoly’ embraces any combination the tendency of which is to prevent competition in the broad and general sense, or to control prices to the detriment of the public. In short, it is the concentration of business in the hands of a few.” Jurisprudence

12. Tatad v. DOE et al, 5 November 1997 “A monopoly is a privilege or peculiar advantage vested in one or more persons or companies, consisting in the exclusive right or power to carry on a particular business or trade, manufacture a particular article, or control the sale or the whole supply of a particular commodity. …Combination in restraint of trade refers to the means while monopoly refers to the end.” Jurisprudence

13. “Too many cooks spoil the broth” -Responsibility is too diffused and accountability for the implementation of the laws difficult to fix due to the varied enforcement agencies -- Necessary to identify a single specialized agency with the expertise and authority to oversee enforcement of competition laws Inadequacy of the Existing Regulatory Framework

14. Lack of a comprehensive competition law and “user-friendly” enforcement mechanism (Abad, 2002) -Inasmuch as each law is meant to address a specific situation, there is a risk of one law negating the positive effects of another - A need to consider other laws on economic development which also touch on elements of competition policy Inadequacy of the Existing Regulatory Framework

15. Focus on the actual and/or potential business conduct of firms and the business environment they operate in Effective harmonization with other government policies Competition Law should be of general application Should contain provisions explicitly prohibiting business practices which are against economic efficiency and consumer welfare Recommendations for a more effective Legal and Regulatory Framework

16. “Rule of reason” approach with respect to horizontal and vertical mergers, specialization agreements, joint ventures, vertical manufacturing and wholesale, among others, taking into consideration size thresholds in terms of market share, assets, sales and/or employment of parties involved (Khemani, 1996) Recommendations for a more effective Legal and Regulatory Framework

17. “AN ACT PRESCRIBING AN ANTITRUST LAW TO STENGTHEN THE PROHIBITION AGAINST MONOPOLIES, CARTELS, COMBINATIONS IN RESTRAINT OF TRADE AND OTHER ANTI- COMPETITIVE PRACTICES AND CONDUCT, AND FOR OTHER PURPOSES.” “Philippine Antitrust Act” Proposed Bill

18. It is the declared policy of the State to achieve a more equitable distribution of opportunities, income, and wealth; a sustained increase in the amount of goods and services produced by the nation for the benefit of the people; and an expanding productivity as the key to raising the quality of life for all by espousing competition and protecting Filipino enterprises from unfair trade practices. Proposed Philippine Antitrust Act

19. The following are the unlawful activities under this Act: a. Contracts, concerted actions or combinations in Restraint of Trade; b. Monopoly or attempt to monopolize; c. Price discrimination; d. Bid-rigging; e. Acquisitions of Corporate Stocks and Assets; f. Interlocking Directors Proposed Philippine Antitrust Act

20. The penalties for committing the above- mentioned unlawful activities are as follows: Any person found guilty of committing items (a), (b), (c), and (d) shall be punished by, A fine - not exceeding twenty million pesos (PhP 20,000,000.00) for a corporation or association; or four million pesos for a natural person; Imprisonment – not exceeding 5 years; or Both, in the discretion of the court. Proposed Philippine Antitrust Act

21. Any person found guilty of committing items (e) and (f) shall be punished by A fine – not exceeding five million pesos (PhP5,000,000.00) Imprisonment – not exceeding 2 years; or Both, in the discretion of the court. Whenever a corporation shall violate any of the provisions of this Act, such violation shall be deemed to be also that of the individual directors, officers, or agents of such corporation. Proposed Philippine Antitrust Act

22. Aside from the criminal liability of the offender, the aggrieved party (Private Suits for Monetary Injury, Suit of the Republic of the Philippines) can also recover Damages. A civil action may be instituted in the name of the Philippines, as parens patriae, on behalf of natural persons residing in the Philippines to secure treble damages for any monetary injury sustained by such natural person. Proposed Philippine Antitrust Act

23. T he Regional Trial Court shall have original jurisdiction to try and decide all criminal and civil cases involving any violations of the above-mentioned unlawful activities Proposed Philippine Antitrust Act

24. Thank you!

25. Abad, Anthony R. A. “Recommendations for Philippine Antitrust Policy and Regulation” in Toward a National Competition Policy for the Philippines, Erlinda M. Medalla (Ed.). PIDS, 2002 Khemani, R. S. 1996. The Role and Importance of Competition Law and Policy in the Region. References