Republic of the Philippines
HOUSE OF REPRESENTATIVES.
Quezon City

Fifteenth Congress
First Regular Session

1
COMMITTEE REPORT NO. 1215

‘Submitted by the Committees on Trade and Industry, Economic Affairs and Appropriations on
32 luN 2344
4835
Re : House Bill No,

Recommending its approval in substitution of House Bill Nos. $49, 913, 1007, 1583. 1733,
1980, 3100. 3134, 3244, 3476, 3334 and 3985

Sponsors: Representatives Garcia A... Abaya, Durano, Ponce-Enrile, Yap S., Cari, Alvarez
‘A, Apacible, Arroyo D., Macapagal-Arroyo G.. Teodoro, Rodriguez R.. Rodriguez
M. Jr. Benitez. Aumentado, Umali R.. Limali C. ,Tafiada,
Miraflores, Golez A.. and Nograles

Mr. Speaker:

‘The Committces on Trade and Industry. Economie Affairs and Appropriations to which were
referred House Bill No. 549. introduced by Rep. Juan C. Ponce Lnrile Jr., entitled:

AN ACT
PROHIBITING MONOPOLIES, ATTEMPT TO MONOPOLIZE AN INDUSTRY OR,
LINE OF COMMERCE, MANIPULATION OF PRICES OF COMMODITIES,
ASSET ACQUISITION AND INTERLOCKING MEMBERHIPS IN THE BOARD OF
DIRECTORS OF COMPETING CORPORATE BODI! AND PRICE
DISCRIMINATION AMONG CUSTOMERS, PROVIDING PENALTIES
THEREFORE, AND FOR OTHER PURPOSES

House Bill No. 913. introduced by Reps. Susan A. Yap and Jose Carlos L. Cari, entitled:

AN ACT
PENALIZING UNFAIR TRADE AND ANTI-COMPETITIVE PRACTICES IN
RESTRAINT OF TRADE, UNFAIR COMPETITION, ABUSE OF DOMINANT
POWER, STRENGTHENING THE POWERS OF REGULATORY AUTHORITIES
AND APPROPRIATING FUNDS THEREFOR, AND FOR OTHER PURPOSES

House Bill No. 1007, introduced by Reps. Antonio C. Alvarez, Tomas V. Apacible and
Feliciano Belmonte Jr., entitled:



AN ACT
PENALIZING UNFAIR TRADE AND ANTLCOMPETITIVE PRACTICES IN
RESTRAINT OF TRADE, UNFAIR COMPETITION, ABUSE OF DOMINANT
POWER, STRENGTHENING THE POWERS OF REGULATORY AUTHORITIES,
ESTABLISIUNG THE FAIR TRADE COMMISSION_AND APPROPRIATING
FUNDS THEREFOR, AND FOR OTHER PURPOSES

House Bill No. 1583, introduced by Reps. Diosdado Macapagal-Arroyo and Gloria
Macapagal-Arroyo, entitled:

AN ACT
PENALIZING UNFAIR TRADE AND ANTILCOMPETITIVE PRACTICES IN
RESTRAINT OF TRADE, UNFAIR COMPETITION, ABUSE OF DOMINANT
POWER, STRENGTHENING THE POWERS OF REGULATORY AUTHORITIES
AND APPROPRIATING FUNDS THEREFOR, AND FOR OTHER PURPOSES

House Bill No. 1733, introduced by Rep. Marcelino R. Teodoro, entitled:

AN ACT
AMENDING ACT NO.3815, ALSO KNOWN AS THE REVISED PENAL CODE, AS
AMENDED, ARTICLE 186 ON MONOPOLIES AND COMBINATIONS IN
RESTRAINT OF TRADE

House Bill No. 1980, introduced by Reps. Rufus B. Rodriguez, Maximo B, Rodriguez Jr..
Florencio 1. Miraflores and Anthony Rolando T. Golez Jr. entitled:

AN ACT
PENALIZING UNFAIR TRADE AND ANTI-COMPETITIVE, PRACTICES IN
RESTRAINT OF ‘TRADE, UNFAIR COMPETITION, ABUSE OF DOMINANT
POWER, SI!RENGTHENING THE POWERS OF REGULATORY AUTHORITIES,
ESTABLISHING THE FAIR TRADE COMMISSION AND APPROPRIATING
FUNDS THEREFOR, AND FOR OTHER PURPOSES

House Bill No. 3100, introduced by Rep. Albert Raymond S. Garcia, entitled:

AN ACT
PENALIZING UNFAIR TRADE AND ANTI-COMPETITIVE PRACTICES IN
RESTRAINT OF TRADE, UNFAIR COMPETITION, ABUSE OF DOMINANT
POWER, STRENGTHENING THE POWERS OF REGULATORY AUTHORITIES
AND APPROPRIATING FUNDS THEREFOR, AND FOR OTIIER PURPOSES

House Bill No, 3134, introduced by Reps. Alfredo Abelardo B, Benitez and Erico B.
Aumentado, entitled

PENALIZING UNFAIR TRADE AND ANTI-COMPETITIVE PRACTICES IN
RESTRAINT OF TRADE, UNFAIR COMPETITION, ABUSE OF DOMINANT
POWER, STRENGTHENING THE POWERS OF REGULATORY AUTHORITIES
AND APPROPRIATING FUNDS THEREFOR, AND FOR OTHER PURPOSES.


House Bill No. 3244, introduced by Rep. Gloria Macapagal-Arroyo, entitled:

AN ACT
CREATING TIE FAIR TRADE COMMISSION OF THF PHILIPPINES

House Bill No. 3476, introduced by Reps. Reynaldo V. Umati and Czarina D. Umali,
entitled:

AN ACT

PROHIBITING MONOPOLIES, ATTEMPT TO MONOPOLIZE AN INDUSTRY OR
LINE OF COMMERCE, MANIPULATION OF PRICES OF COMMODITIES,
ASSET ACQUISITION AND INTERLOCKING MEMBERSHIPS IN THE BOARD
OF DIRECTORS OF COMPETING CORPORATE BODIES AND PRICE
DISCRIMINATION AMONG CUSTOMERS, PROVIDING PENALTIES
THEREFOR AND GRANTING ADDITIONAL POWERS AND FUNCTIONS TO
THE NATIONAL CONSUMER AFFAIRS COUNCIL, AND FOR OTHER
PURPOSES

House Bill No, 3534, introduced by Reps. Lorenzo R. Tafiuda III and Fduardo R. Gullas.
entitled:

AN ACT
PRESCRIBING AN ANTITRUST LAW TO STRENGHTEN THE PROHIBITION
AGAINST MONOPOLIES, CARTELS, COMBINATIONS IN RESTRAINT OF
TRADE AND OTHER ANTICOMPETITIVE PRACTICES AND CONDUCT, AND
FOR OTHER PURPOSES

and House Bill No. 3985, introduced by Rep. Eduardo R. Guilas, Krico B, Aumentado and
Karlo Alexie B. Nograles, entitled:

AN ACT
PRESCRIBING AN ANTI-IRUST LAW TO STRENGTHEN THE PROHIBITION
AGAINST MONOPOLIFS, CARTELS, COMBINATIONS IN RESTRAINT OF
TRADE AND OTHER ATI COMPETITIVE PRACTICES AND CONDUCT AND
FOR OTHER PURPOSES c
4835

have considered the same and recommend that the attached House Bill No.
entitled:

AN ACT
PENALIZING ANTI-COMPETITIVE AGREEMENTS, ABUSE OF DOMINANT
POSITION, AND ANTI-COMPETITIVE. MERGERS, ESTABLISHING THE
PHILIPPINE FAIR COMPETITION COMMISSION AND APPROPRIATING
FUNDS THEREFOR, AND FOR OTHER PURPOSES

be approved in substitution of House Bill No. 549, 913. 1007, 1583, 1733, 1980, 3100, 3134,
3244. 3476, 3534 and 3985, with Representatives Ponce-Enrile. Yap S.- Alvarez A..
Apacible. Arroyo D., Macapagal-Arroyo G.. Teodoro, Rodriguez R., Rodriguez M. Ir.
Garcia A.. Benitez, Aumentado, Umali R.. Umali ©. Tafiada, Gullas, Belmonte F.
Miraflores. Golez A., Nograles, Duavit. Biron, Defensor, ‘Treas, Casino, Villarica,
Mandanas. Fernandez. Garay. Del Rosario A.G... Sacdalan, Joson, Rodriguez I. Lacson-Noel.



Cee feret J Sahidula, Lagdameo A., Bonoan-David, Mellana, Sakaluran, Quisumbing,
Unabia, Batocabe, Cotim i

Pancho, Cojuangco E., Enverga, Cajayon,
jugna. Ty, Romualdez, Gonzales A., Panotes, Bagasina, Durano, Cua, Garin $S.. Castelo,
Javier, Evardone, Bulut-Begtang, Alvarez M.

Plaza, Palmones, Magsaysay E., Almario,
Bello, Tinio, Rivera, Datumanong, Pangandaman S.. and Abaya as authors thereof.

ARCIA
inman
Committee on Trade and Industry

THE HONORABLE SPEAKER
HOUSE OF REPRESENTATIVES
QUEZON CITY


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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH {15") CONGRESS
First Regular Session

4835
HOUSE BILL NO.

(In Substitution of House Bill Nos, $49, 913, 1007, 1583, 1733
1980, 3100, 3134, 3244, 3476, 3534 and 3985)

Introduced by Representatives Ponce-Enrile, Yap S., Cari, Alvarez A., Apacible,
Arroyo D., Macapagal-Arroyo G.. Teodoro, Rodriguez R., Rodriguez M. Jr.,
Garcia A., Benitez, Aumentado, Umali R., Umali C., Tafiada, Gullas, Belmonte F.,
Miraflores, Golez A., Nograles, Duavit, Biron, Defensor, Trefias, Casifio, Villarica,
Mandanas, Fernandez, Garay, Del Rosario A.G., Sacdalan, Joson, Rodriguez |.
Lacsen-Noel, Yu, Ferrer J.. Sahidula, Lagdameo A. Bonoan-David, Meilana,
Sakaluran, Quisumbing, Unabia, Batocabe, Colmenares, Haresco, Villar,
Pancho, Cojuangco E., Enverga, Cajayon, Tugna, Ty, Romualdez, Gonzales A,
Panotes, Bagasina, Durano, Cua, Garin S., Castelo, Javier, Evardone, Bulut-
Begtang, Alvarez M., Plaza, Palmones, Magsaysay E., Almario, Bello, Tinio,
Rivera, Datumanong, Pangandaman S., and Abaya

AN ACT
PENALIZING ANTI-COMPETITIVE AGREEMENTS, ABUSE OF DOMINANT
POSITION, AND ANTI-COMPETITIVE MERGERS, ESTABLISHING THE
PHILIPPINE FAIR COMPETITION COMMISSION AND APPROPRIATING
FUNDS THEREFOR, AND FOR OTHER PURPOSES

Be it enacted by the Senate and the House of Representatives of the
Philippines in Congress assembled:

CHAPTER |
GENERAL PROVISIONS.


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SECTION 4. Title. - This Act shail be known and cited as the “Philippine
Fair Competition Act of 2011."

SEC. 2. Declaration of Poficy. — Pursuant to the constitutional mandate
that the State shall regulate or prohibit monopolies when the public interest so
requires and that no combinations in restraint of trade or unfair competition shall
be allowed, the State shall:

(a) promote and enhance economic efficiency and free, full and fair

competition in trade, industry and all commercial economic activities;

(b) prevent the concentration of economic power in a few persons who
threaten te control the production, trade, or industry in order to stifle
compelition, distort, manipulate or constrict the discipline of free
markets, increase market prices in the Philippines; and

{c) penalize all forms of anti-competitive agreements, abuse of dominant
position, and anti-competitive mergers, with the objeciive of protecting
consumer welfare and advancing domestic and international trade and
economic development.

SEC. 3. Scope and Application. - This Act shall be enforceable within
the territory of the Republic of the Philippines and shall apply to all areas of trade,
industry and commercial economic activity. It shall likewise be applicable to
intemational trade having direct, substantial and reasonably foreseeable effects
in trade, industry or commerce in the Republic of the Philippines including those
that result from acts done outside the Republic of the Philippines.

The Act shall apply to: (a) all firms as defined hereunder and ali their
commercial agreements, actions or transactions involving goods, services oF
intellectual property; and, (b) all agents, officers, employees, partners, owners.
directors, consultants, stockholders, representatives, managers, supervisors, and
ali other natural persons who, acting on behalf of juridical persons shall authorize,
engage or aid in the commission of restrictive practices prohibited under this Act.

This Act shall apply neither to the combinations or activities of workers or
employees nor to agreements or arrangements with their employers when such
combinations, activities, agreements, or arrangements are designed solely to
facilitate collective bargaining in respect of conditions of employment.

SEC. 4. Definition of Terms. - As used in this Act, the following terms
shall be defined as:



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(2) “Agreement” shall refer to any type or form of arrangement,
understanding, undertaking or concerted action, whether formal or
informal or tacit, written or oral,

(b) “Cartel” shall refer to a combination of firms, providing goods in
relevant markets, acting or joined together to obt

a shared monopoly
to control production, sale and price, or to obtain control in any
particular industry of commodity, or a group of firms that agree to
restrict trade, lt shall also refer to firms or section of firms having
common interest designed to promote the exchange of knowiedge
resulting from scientific and technical research, exchange of patent
rights and standardization of products among themselves with the
intent of preventing, restricting or distorting competition,

{c) “Commission” shall refer to the Philippine Fair Competition
Commission created under this Act,

{d) “Competition’ shall refer to the process by which economic agents,
acting independently in a market, timit each other's ability to control the
prevailing conditions in the market;

{e} “Control” shall refer to at least twenty percent (20%) ownership, directly
of indirectly, of a firm or a group of firms by another firm,

{f} “Dominant Position” shall refer to a situation where a firm, either by
itself or acting in collusion with other firms. is in a position to control a
relevant market for the sale of a particular good or service by fixing its
prices, excluding competitor firm, or controlling the market in a specific
geographical area;

(9) “Firm” shall refer to any person, natural or juridical, parinership,
combination or association in any form, whether incorporated or not,
domestic or foreign, including those owned or controlled by the
government, engaged directly or indirectly in any economic activity:
Provided, That, two firms, one of which is controlled by the other, shall
be treated as one firm! Provided, further, That two or more firms that
are controlled by a single firm shall be treated as one firm:

(h) “Goods” and “Services”: “Goods” shail refer to all types of tangible and

intangible property that could be bought and sold, and the possession



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of which could be transferred in whole or in part, temporarily or
permanently;

"Services" shall refer to the provision of things of value or articles or
items that could be used by one person, whether natural or juridical
through human interaction or through the use, without transfer of
ownership, of the facilities of the provider by the client, or a
combination of both. {t shall include all non-tangible goods. It is the
non-material equivalent of a good, consumed at the point of sale and
does not result in ownership;

{i) Market” and “Relevant Market”: “Market” shall refer to a place or
venue for commercial activity, which may be a city, province, region,
the whole area of the Philippines, or which may extend beyond the
borders of the Republic of the Philippines, where articles are bought or
sold. it shall also refer to the geographical or economic extent of
commercial demand;

“Relevant Market’ shall refer to the line of commerce in which
competition has been restrained. It shall also refer to the geographic
area involved, including all reasonably substitutable goods, and all

* competitors, to which consumers could turn if the restraint or abuse
results in the significant increase in prices.

@® “Mergers” shali refer to two or more undertakings, previously
independent of one another, join together. This definition includes
transactions whereby two firms legally merge into one (mergers). one
firm takes sole control of the whole of part of another (acquisitions or
takeovers), two or more firms acquire joint control over another firm
Goint ventures) and other transaction, whereby one or more
undertakings acquire control over one or more undertakings, such as
interlocking directorates; and

(k) “Monopoly” shall refer to a privilege or undue advantage of one or more
firms, consisting in the exclusive right to carry on a particular business
or trade, and/or manufacture a particular product, article or object of
trade, commerce or industry. It is a form of market structure in which

‘one or only a few firms dominate the total sales of a product or service.


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CHAPTER th
PHILIPPINE FAIR COMPETITION COMMISSION

SEC. 5. Philippine Fair Competition Commission. — To implement the
national policy and attain the objectives and purposes of this Act, an independent
Commission is hereby created, to be known as the Philippine Fair Competition
Commission (PFCC), which shall hereinafter be referred to as the Commission,
and shall be organized within one hundred eighty (180) days after the approval of
this Act.

For budgetary purposes, the Commission shall be under the Office of the

President

(a) Composition. - The Commission shall be compased of a Chairperson
and four (4) Associate Commissioners. The Chairperson and
Commissioners shall be citizens and residents of the Philippines, at
least forty (40) but not more than sixty-five (65) years of age, of good
moral character and of recognized probity and independence. The
Chairperson and two (2) of the Associate Commissioners shall be
members of the Philippine Bar and the remaining two (2) shall be of
recognized competence in the field of economics preferably in
industrial organization economics, or finance, commerce, accounting or
management. They must have actively practiced their professions for
at least ten (10) years, but must not have been candidates for any
elective national or local office in the immediately preceding elections,
whether regular or special.

(b) Term of Office. - The Chairperson and the Associate Commissioners
shall be appointed by the President of the Philippines. The term of
office of the Chairperson and the Associate Commissioners shail be six
(6) years without reappointment. The Chairperson shall hold office for
six years and of the first four (4) Associate Commissioners, two (2)
shall hold office for a term of four (4) years and two (2) for a term of two
(2) years. In case a vacancy occurs before the expiration of the term of
office, the appointment to such vacancy shall be only for the unexpired
term of the predecessor,

(©) Prohibition and Disquatifications, — The Commissioners shall not,
during their tenure, hold any other office of employment. They shall



18

6

not, during thelr tenure, directly or indirectly practice any profession,

participate in any business, or be financially interested in any contract
with, or any franchise, or special privileges granted by the govemment
or any subdivision, agency, of instrumentality thereof, including
government-owned and controlled corporations of their subsidiaries.
They shall strictly avoid conflict of interest in the conduct of their office.
They shail not be qualified to run for any office in the election
immediately succeeding their cessation from office. They shall not be
allowed to appear or practice before the Commission for two (2) years
following their cessation from office.
No spouse or relative by consanguinity or affinity within the fourth civil
degree and no former law, business, or professional partner or
associate of any of the Commissioners, the Chairperson and the
Secretary of the Commission may appear as counsel or agent on any
matter pending before the Commission or transact business directly or
indirectly therein during his/her incumbency and within one (1) year
from hissher cessation of office.

(d) Compensation of Commissioners. - The Chairperson of the
Commission shall hold the rank of and shall have the privileges and
compensation equivalent to that of a Department Secretary or
Presiding Justice of the Court of Appeals, whichever is higher, while
the Associate Commissioners shall each hold the rank of and shall
fave the privileges and compensation equivalent to that of a
Department Undersecretary or Associate Justice of the Court of
Appeals, whichever is higher.

(e) Quorum. — Three (3) members of the Commission shail constitute a
quorum and the affirmative vote of three members (3) shall be
necessary for the adoption of any rule, ruling, order, resolution,
decision of other acts of the Commission en banc.

() Principal Office, Branch and Venue. — The Commission shall hold its
principal office in Metro Manila but it may conduct hearings outside of
Metro Manila upon prior notice for inquiries, studies or any other
proceedings required for the proper and efficient exercise of its power
and the discharge of its duties. It may establish branch offices outside



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of Metro Manila as may be necessary for the effective discharge of its
functions.

(9) Staff — The Commission shall appoint an adequate staff which shalt

be headed by an Executive Director, fix the compensation in
accordance with the Revised Compensation and Position Classification
Law and determine their status, qualifications and duties. The
Executive Director shall be appointed by the President and shall have
relevant experience in any of the fields of law, economics, commerce,
management or finance for at least ten (10) years Provided, That the
Executive Director shall be a Career Executive Service Officer (CESO)
The members of the technical staff, except those performing purely
clerical functions, shall possess at feast a Bachelor's Degree in the
following fines of specialization. economics, preferably in industrial
organization; taw, finance; commerce; accounting; or management.
SEC. 6. Original and Exclusive Jurisdiction, Powers and Functions —

The Commission shall have original and exclusive jurisdiction to enforce and
implement the administrative provisions of this Act, its implementing rules and
regulations, and all other competition laws, and in particular:

(a) Powers of the Commission Without Hearing. - The Commission shall

have the power to do the following acts, without hearing:

(1) Motu Proprio Investigation or Upon Complaint. — To commence
investigation, on its own initiative or upon the complaint of any person,
any and all violations of this Act and other competition laws and cause
the issuance of a cease and desist order prior to the commencement
of a preliminary inquiry, and/or the institution of a civil or administrative
action;

(2) Administrative Action. - To attest and file all complaints for appropriate
administrative relief from or against violations of this Act or other
competition laws;

(3) Civil Action. — To attest and file, on behalf of the State, civil complaints
for damages to business or property of the State, arising from a
violation of this Act and other competition laws;

(4) Deputization. — To require any government agency to lend assistance
and information necessary in the discharge of its responsibilities under



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1 this Act, and examine, if necessary, pertinent records and documents

2 in the possession of such goverment agency;
3 (5) Issuance of Subpoena. — To issue subpoena, subpoena duces fecum
4 and subpoena ad testificandum in the exercise of its functions, powers
$ and duties under this Act, subject to the following standards:
6 i. No subpoena shall be issued to require the production or disclosure
7 of trade secrets as defined in paragraph (c)(2) hereof,
g i._A subpoena may be quashed only by means of a motion duly set
9 for hearing and on the grounds prescribed by the Rules of Court
10 ii, A person appearing before the Commission in obedience to a

Mi subpoena shall be advised, before he is required to testify or

2 produce any documentary or real evidence, of his right to be
3 assisted or represented by a counsel of his choice, and if he has
4 none, the Commission shall appoint a de officio counsel for him:
15 and of his right to avail of the privilege of immunity from
16 prosecution herein prescribed:

7 (b) Powers of the Commission Upon Prior Notice and Hearing. — The
18 Commission may exercise the following powers, only upon prior notice and
19 hearing:

20 (1) Binding Rutes — To issue binding rulings;

21 (2) Show Cause Order and Decision — To issue show cause orders, and
2 thereafter, render decision thereon;

23 (3) Consent Judgment — To approve, or disapprove, proposals for consent
24 judgment,

25 (4) Preliminary Inquiry — To conduct the required preliminary inquiry of
26 cases involving violations of this Act and other competition laws: and
a thereafter, if appropriate, to sign and file the proper criminal comptaint
28 before the Department of Justice; and

29 (5) Administrative Fines, Penalties and Sanctions - To impose the
30 appropriate administrative fines or penalties herein authorized to be
31 imposed.

32 (c) Other Powers and Functions of the Commission:

33 (1) Industry Studies and Company Profile. - To gather and compile

34 information and investigate from time to time, the way 2 given



industry is structured or organized whether as a monopoly,
oligopoly, or competitive; the way the firms within that industry act,
behave, or conduct themselves in such matters as setting pices,
determining output, and the resulting performance of the industry
‘as a whole; the organization, business, conduct, practices and
management of any person, partnership, or corporation engaged
in trade, commerce, of industry and its relation to individuals,
partnerships, associations, corporations, firms and other business
enterprises;

(2) Annual and Special Reporis. - To require, by general or special
orders, firms engaged in trade, commerce, or industry to file with
the Commission in such form as the Commission may prescribe,
annual or special reports, of answers in writing to specific
questions, furnishing the Commission such information as it may
require as to the organization, business, conduct, practices,
management and relation to other persons of the respective
natural or juridical persons or entities filing such reports or answers
in writing except that the Commission shail not require, either by @
specific order or by @ subpoena, the disclosure or production of
rade secrets such as a secret formula, pattern, device or
compilation of information, including names of customers, which is
used in one’s business and which gives one an opportunity to
obtain advantage over competitors who do not know or use it
Trade secrets shall include a plan or process, tool, mechanism, or
compound known only to the owner and his employees to whom it
is necessary to confide it;

(3) Public Disclosure of information. - To make public, from time to
time, such portions of the information obtained by it under this Act,
except trade secrets and names of customers, as it shall deem
expedient in the public interest;

(4) Reports and Recommendations to Congress. — To submit annual
and special reports to Congress, through the Congressional
Oversight Committee on Fair Competition created under this Act,
including proposed legislation for the regulation of trade,



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commerce, or industry, and provide for the publication of its reports
and resolutions in such form and manner as may be best adopted
for public information and transparency, and

(5) Trade Conditions, Domestic and Foreign, - To study, from time to

time, trade conditions in and with foreign countries where
associations, combinations, or practices of manufacturers,
merchants, or traders, or other conditions, may affect the foreign
trade of the Philippines, and report to Congress its findings and
recommendations thereon as it may deem advisable

SEC. 7. Jurisdiction of Regional Trial Courts. — The Regional Trial
Court shall have jurisdiction over cases arising from violations of the provisions:
of this Act.

With respect to personal actions arising from violations of the provisions of
this Act, actions may be commenced and tied where the plaintiff or any of the
principal plaintiff resides, or where the defendant or any of the principal
defendants reside, or in the case of a non-resident defendant, where he may be
found, at the election of the plaintiff.

CHAPTER Ill
PROHIBITED ACTS

SEC. 8. Anti-competitive Agreements. - it shall be untawtul for firms to
engage In horizontal and vertical agreements that prevent, distort or restrict
competition, unless otherwise exempted.

i. “Horizontal agreement” means an agreement entered into between
two or more enterprises operating at the same level in the market,

i. “Vertical agreement’ means an agreement entered into between two
or more enterprises, each of which operates, for the purposes of the
agreement, at different levels of the production or distribution chain,
and relating to the conditions under which the parties may purchase,
sell or resell certain goods or services

There shall be a prima facie case for the existence of an anti-competitive
agreement if and when the Commission finds that two or more firms that are
ostensibly competing for the same relevant market and actually perform uniform
of complementary acts among themselves which tend to bring about artificial and
unreasonable increase, decrease or fixing in the price of any goods or when they



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simuftaneously and unreasonably increase, decrease or fix the prices of their
seemingly competing goods thereby lessening competition in the relevant market
among themselves

{a) Price Fixing - Any agreement among competitors to raise, suppress,
fix or otherwise maintain the price at which their goods and services
are sold such as, but not limited to, establishing or adhering to price
discounts, holding prices firmly, eliminating or reducing discounts,
adopting a standard or formula for computing prices, maintaining
certain price differentials between different types, sizes or quantities of
products, adhering to a minimum fee or schedule and other analogous
schemes with the purpose and effect of creating a monopoly or cartel
‘of lessening competition.

{b) Bid Rigging — Any agreement to fix prices at auctions or in any other
form of bidding, with the purpose and effect of creating a monopoly or
cartel, or lessening competition such as, but not limited to, cover
bidding, bid suppression, bid rotation and market allocation and other
analogous practices of bid manipulation.

In determining whether there is price fixing or bid rigging, the following

circumstances may be considered:

(1) generally, any considered evidence that two sellers of similar goods
have agreed to set the price of their goods, to sell only a certain
‘amount of their goods, or to sell only to a limited number of buyers
‘of consumers;

(2) a drastic change in prices of goods and services involving more
than one seller of similar goods of different brands, particularly if the
changes in prices take place in equal amount and about the same
time;

(3) a seller refusing to sell based on an agreement with a competitor,

(4) the same firm has repeatedly been the low bidder who has been
awarded contracts for a certain service or a particular bidder seems:
to win bids on a fixed-rotation,

(5) there is an unusual and unexplainable difference between the
winning bid and ail other bids; and



(6) the same bidder bids substantially higher on some bids than on
others, and there is no logical reason to explain the difference.

SEC. 9. Abuse of Dominant Position. — \t shall be unlawtul for one or
more firms to abuse their dominant position, by engaging in unfair methods of
competition, or in unfair or deceptive trade practices, or entering into
combinations in the form of trust or otherwise, or conspiracy, with the purpose
and effect to prevent, restrict, or distort competition Abusive agreements such
as, but not limited to, any of the following, shall be deemed to fall under the crime
of abuse of dominant position:

(a) Predatory Behavior Towards Competitors — Any agreement, including, but
not limited to, selling goods at below relevant cost with the intent of drving
competitors out of the market, or creating barriers to entry;

(b) Limitation and Controt of Markets — Any agreement to limit or control
production, markets, technical development, or investment with the
purpose and effect of creating a monopoly or cartel, or lessening
competition,

(©) Market Allocation — Any agreement to divide the market, whether by
volume of sales or purchase or by territory, by type of goods sold, by
customers or sellers or by any other means, with the purpose and effect of
creating a monopoly or cartel, or lessening competition;

(@) Arrangements to Share Markets or Sources of Supply ~ Any agreement to
share markets of sources of supply of raw materiais, with the purpose and
effect of creating a monopoly or cartel, or lessening competition;

(e) Price Discrimination - Any agreement prescribing or charging, directly or
indirectly, discriminatory pricing terms or conditions in the supply or
purchase of goods of like grade and quality with the purpose and effect of
creating a monopoly or cartel, or substantially lessening competition:
Provided, That nothing contained herein shall be construed to prohibit
permissible price differentials unless the same shall have the effect of
preventing, restricting or distorting competition: Provided, further, That for
the purpose of this section, the following shall be considered permissible
price differentials:

(A) Socialized Pricing — Socialized pricing for the less fortunate sector
of the economy;



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(2) Volume Discounts — Price differentials which reflect an allowance
for differences in the cost of manufacture, sale, or delivery resulting
from differing methods or quantities in which the goods are sold or
delivered to the purchasers,

3) Competitive Pricing - A price differential or other terms of sale in
response to the competitive price of payments, services or facilities
furnished by a competitor,

(4) Bonafide Selection of Customers — The selection of customers on
bona fide transaction; and

(5) Price Differentials Due to Changing Market Conditions or
Marketability of Goods - Price changes from time to bme in
response to changing conditions affecting the market or the
marketability of the goods concemed such as, but not limited to,
actual of imminent deterioration of perishable goods, obsolescence
of seasonal goods, distress sales under court process, or sale on
good faith when a business is going to be discontinued

() Exclusivity Arrangement — Any agreement imposing restrictions on the
lease or contract for sale or trade of goods concerning where, to whom, or
in what forms goods may be sold or traded, such as, but not limited to,
fixing prices, or giving preferential discounts, or rebate upon such price, or
imposing conditions not to deal with competing firms, where the purpose of
such agreement is to lessen competition: Provided, That nothing
contained herein shall prohibit or render unlawful permissible franchising,
licensing or exclusive distributorship agreements;

(g) Tie-In Arrangements — Any agreement making the supply of particular
goods dependent upon the purchase or lease of other goods fram the
supplier or his consignee, where the purpose and effect of such sale or
tease or such condition is to substantially lessen competition or to create a
monopoly or cartel:

(h) Boycott - Any concerted refusal to sell or conspiracy not to sell or to stop
doing business on the part of the suppliers of any goods, unless for a
legitimate purpose.

SEC. 10. Anti-competitive Mergers — No firm engaged in commerce or
trade shall acquire, directly or indirectly, the whole or any part of the stock or



other share capital, or the whole or any part of the assets, of one or more firms
engaged in any line of commerce or trade where the effect of such acquisition of
such stocks, share capital, or assets, of af the use of such stock by voting or
granting of proxies or otherwise maybe to substantially lessen competition, or
tend to create a monopoly,
(a) Permissible Stock or Asset Acquisition or Ownership. — Nothing
contained herein, however, shall be construed to prohibit:
(1)A firm-trom purchasing the stock or other share capital of one
‘or more corporations solely for investment and not using the
same by voting or otherwise to bring about, or in attempting to
bring about, the substantial lessening of competition;
Q)A corporation from causing the formation of subsidiary
corporations, or from owning and holding all or part of the stock
of such subsidiary corporations, for the actual carrying on of
their immediate lawful business, or the natural and legitimate
branches or extensions thereof, and
(3) A firm from continuing te own and hold the stock or other share
capital or assets of another corporation which it acquired prior
to the approval of this Act
(b) Nofification Prior to Stock or Asset Acquisition. - No firm shall acquire,
directly of indirestly, the shares of stock or assets of any other firm, if
‘as a result of the acquisition, the acquiring firm would own twenty
percent (20%) of more of the shares of stock or assets of the acquired
firm, unless, the acquiring and selling firm notify, prior to the conciusion
of the agreement for such acquisition and in the prescribed form, the
Commission of such proposed acquisition. Only the acquiring firm is
required to make the notification in a tender offer, The contemplated
acquisition shall be deemed approved, unless the Commission. within
thirty (30) calendar days from receipt of the notification, orders the
acquiring firm to show cause why the proposed acquisition shall not be
declared as prohibited under this Act, The show cause order shail set
forth the facts upon which it is based, The acquiring or selling firm may
contest the show cause order, in which case, the proposed acquisition
shall be considered enjoined until the Commission shall have rendered



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l a decision on the proposed acauisition after due notice and hearing,
2 within further sixty (60) calendar days in accordance with the
3 procedure prescribed herein for the disposition of a show cause order.
4 If the Commission fails to make a decision within the prescribed 60
5 calendar day limit, the acquisition shall be deemed approved and the
6 parties may proceed to implement it

7 (©) Transactions Exempt from Prior Notice Requirement. — The following
8 classes of transactions are exempt from the prior notice requirement
9 under this Section:

10 (1) Acquisition of goods or realty transferred in the ordinary course

" of business;

2 (2) Acquisitions of bonds, mortgages, deeds of trust, or other

13 obligations which are not voting securities;

4 (3) Acquisitions of voting securities of an issuer at least fifty

15 percent (50%) of the voting securities of which are owned by

16 the acquiring firm prior to such acquisition;

7 (4) Transfers to, of from, goverment agencies oF

18 instrumentalities, including government-owned or controlled

19 corporations;
20 (5) Transactions exempted from the provisions of this Act and

21 other proper and applicable laws;
2 (6) Transactions which require the approval of a specialized
23 agency which regulates the particular industry;

24 (7) Acquisitions, solely for the purpose of investment, of voting
23 securities, if as a resutt of such acquisition the securities
26 acquired or held do not exceed ten percent (10%) of the
27 outstanding voting securities of the issuer;
28 (8) Acquisitions of voting securities pursuant to the preemptive
29 rights of the acquiring firm or, if, as a resuit of such acquisition,

30 the voting securities acquired do not increase, directly or
31 indirectly, the acquiring firm's per centum share of outstanding

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(9) Such other acquisitions, transfers, of transactions which the
Commission may declare as not likely to violate the provisions
of this Act or any other proper and applicable law.

CHAPTER IV
FINES AND PENALTIES

SEC. 11, Administrative Penalties.

(a) Without prejudice to the violation of other laws, any firm that shall be
found to have violated Sections 8, 9 and 10 of this Act, or any combination
thereof, shall, for each and every violation, be punished by a fine of not less than
Ten million pesos (Php10,000,000.00) and not exceeding Fifty million pesos
(Php50, 000,000.00) if a natural person; by a fine of not less than Two hundred
fifty million pesos (Php250,000,000. 00) but not exceeding Seven hundred fifty
milion pesos {Php750,000,000.00) if a firm, at the discretion of the Commission.

In addition, a fine shall be imposed in an amount double the gross
proceeds gained by the violatoris or double the gross loss suffered by the
plaintiffs.

(b) Failure to Comply With An Order of the Commission. ~ Any person
who fails or neglects to comply with any term or condition of @ binding ruling, @
cease and desist order or an order for readjustment issued by the Commission,
shall pay a fine of not less than Fifty thousand pesos (Php50,000.00) for each
violation. Each violation shall be deemed a separate offense: Provided, That in
the case of a violation through a continuing failure or neglect to comply, each day
of continuance of such failure or neglect shall be deemed a separate offense.

{ce} Supply of Incorrect or Misleading information. - The Commission
may likewise impose upon persons or entities fines of not less than Five
thousand pesos (Php 5,000.00) to not more than One hundred thousand pesos
(Php100,000.00) where, intentionally or negligently, they supply incorrect or
misleading information in any document, application or other paper filed with or
submitted to the Commission or supply incorrect or misleading information in an
application or other paper filed with or submitted to the Commission or supply
incorrect or misleading information in an application for a binding ruling, a
proposal! for a consent judgment, proceedings relating to a show cause order, or
application for modification of the Commission's ruling, order or approval, as the
case may be.

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SEC. 12. Criminal Penalties. - Without prejudice to the violation of other
laws, any firm that shail be found ta have violated Sections 8, 9 and 10 of this

‘Act, of any combination thereof, shall, for each and every violation, be punished
by a fine of not less than Ten million pesos (Phpt0,000,000.00) and not
exceeding Fifty million pasos (Php 0,000,000.00) if a natural person; by a fine of
not ‘ess than Two hundred fifty mitlion pesos (Php250,000.000.00} but not
exceeding Seven hundred ‘fifty million pesos (Php750,000,000.00) if a firm, and
by imprisonment not exceeding ten (10) years, or both, at the discretion of the
court.

In the alternative, a fine shall be imposed in the amount double the gross
proceeds gained by the violator or double the gross loss suffered by the plaintifis.

For purposes of determining the persons who will suffer the punishment of
imprisonment as provided under the preceding paragraph, provisions of the
Revised Penal Code, Title ll, Articles 16, 17, 18 and 19 on criminal liability of
principais, accomplices, and acessories shall apply.

CHAPTER V
ENFORCEMENT

SEC. 13. Preliminary Inquiry. - The Commission shall motu proprio, or
upon the filing of a verified complaint by an interested party or upon referral by
the concerned regulatory agency, initiate a preliminary inquiry for the
enforcement of this Act.

No criminal or civil case for violation of this Act shall be filed or instituted
by a private party directly in court, unless there has been a preliminary inquiry
conducted by the Commission and the same has been endorsed for filing by the
Commission.

SEC. 14. Powers of Concerned Government Agencies—
Notwithstanding the provisions of the preceding section, the exercise of
regulatory powers by different government agencies, including local govemment
units, over an industry or a sub-sector of an industry shall be cumulative and
shall not be construed in any way as derogating from the power and authonity of
the concerned agency. The government agencies shail cooperate and coordinate
with one another in the exercise of their powers in order to prevent overlap, to
share confidential information, or for other effective measures. The Commission

can seek technical assistance from sectoral regulators



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The Commission shall have primary and sole jurisdiction over competition
issues, while the regulatory body shall continue to exercise jurisdiction over all
matters with regard to the firms’ operation and existence.

SEC. 15, Power to Investigate and Enforce Orders and Resolutions.
The Commission shall conduct preliminary inquiries by administering oaths,
issuing subpoena duces fecum and summoning witnesses, and commissioning
consultants or experts. {t shall determine if any provision of this Act has been
violated, enforce its orders and cary out its resolutions by making use of any
available means, provisional or otherwise, under existing laws and procedures:
including the power to punish for contempt and to impose fines.

SEC. 16. Self-incrimination.- Pursuant to the preceding section, a person
who is the subject of any preliminary inquiry or investigation by the Commission
shall produce the specified documnent or information when so required by written
notice: Provided, That no person shall be excused from disclosing any document
or information to the inquiring officer on the ground that the disclosure of the
information or document may be incriminating: Provided, further, That such
document or information produced by the person who is the subject of
investigation shail not be admissible as evidence against the person in criminal
proceedings: Provided, finally, That such document or information shall be
admissible in evidence in civil proceedings including those arising from or in
connection to the implementation of this Act.

SEC. 17. Priviteged Communication Exclusion.- Nothing in the
preceding section shall compe! the disclosure of privileged communication:
Provided, That the person who refuses to disclose the information or produce the
document or ather material required by the inquiring officer in relation to the
preliminary inquiry being conducted shall nevertheless be obliged to give the
name and address of the firm to whom, or by whom, or on whose behalf, such
privileged communication was made.

SEC. 18. Confidentiality of Information- Any document or information
submitted by firms, as determined and marked confidential by the Commission,
relevant to any investigation being conducted pursuant to this Act shall not, in any
manner, be directly or indirectly disclosed, published, transferred, copied, or
disseminated. The identity of persons who provide information to the
Commission and who need confidentiality to protect themselves against



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economic retaliation, and any Commission deliberations_in regard to current or
still uncompleted matters shall remain confidential.

Any violation of this provision shall be imposed a fine of not jess than One
hundred thousand pesos {Php100,000.00) but not more than Five hundred
thousand peses (Php 500,000.00).

SEC. 49. Leniency. - Any person or firm which cooperates or furnishes
any information, document or data to the Commission before or during the
conduct of the preliminary inquiry that constitutes material evidence as
determined by the Commission under this Act shall be immune from any suit or
charge including from affected parties and third parties: Provided, That the
person or firm is not the most guilty. Provided, further, That any person or firm
which cooperates or furnishes information, document or data to the Commission
in connection to an investigation being conducted shail not be subjected to any
form of reprisal or discrimination: Provided, furthermore, That such reprisal or
discrimination shall be considered a violation of this Act and subjected to the
penalties provided fer under Section 11 hereof.

Nothing in this section shall preclude prosecution for persons and firms
who reported to the Commission with malicious information, data and falsified
documents which is damaging to the business and integrity of the persons and
firms under inquiry. Such act shall likewise be considered as an unfair trade
practice punishable under this Act.

SEC. 20. Termination and Action on Preliminary Inquiry. - The
Commission, after considering the statements made, or documents or articles
produced, in the course of an inquiry conducted by it, shall terminate the
preliminary inquiry by issuing a resolution ordering its closure if no violation or
infringement of this Act is found; or by issuing a nolo contendere resolution; or
issuing a resolution to, singly of cumulatively, (a) impose penalties in the range
provided under Section 11 hereof, (b) order the rectification of certain acts or
omissions; or (c) order the restitution of the affected parties.

When determined by the facts and circumstances, the Commission shall
institute a civil action by class suit in the name of the Republic of the Philippines,
as parens patriae, on behalf of persons residing m the Philippines, to secure
treble damages for any injury sustained by such persons by reason of any
violation of this Act, plus the cost of suit and reasonable attorney's fees.



If the evidence so warrants, the Commission shall file criminal cases for
violation of this Act or relevant laws before the Department of Justice pursuant to
Section 12 of this Act

SEC. 21. Nolo Contendere Resolution. — Any firm under inquiry for
violation of the provisions of this Act may submit to a nolo contendere resolution
at any time before the termination of the preliminary inquiry by: a) the payment of
an amount within the range of penalties provided for under Section 11 b} hereof
by entering into an undertaking to effectively stop and rectify the acts complained
against, make restitution to the affected parties, whether or not the parties are
plaintiffs or witnesses; and, c} by submitting regular compliance reports as may
be directed: Provided, That ten percent (10%) of the amount paid under this
section shall equitably accrue to the Commission: Provided, further, That a nolo
contendere resolution shall not bar any inquiry for the same or similar acts if
continued or repeated.

SEC. 22, Implementing Policy; Non-Adversarial Administrative
Remedies, — As an implementing and enforcement policy, the Commission shall,
under such rules and regulations it may prescribe, encourage voluntary
compliance with this Act and other competition laws by making available to the
parties concerned the following and other analogous non-adversarial and non-
adjudicatory administrative remedies, before the institution of administrative, civil
or criminal action:

(a) Request for Binding Ruling. - Any person who is in doubt as to whether
the contemplated or existing act, course of conduct, agreement,
decision or practice is in compliance with, is exempt from, or in
violation of any of the provisions of this Act, other competition taws, or
implementing rules and regulations thereof, may request the
Commission, in writing, to render a binding ruling thereon;

(b) Show Cause Order. — Upon preliminary findings motu proprio or on
written complaint under oath by an interested party, that any person is
conducting his business, in whole or in part in a manner that may not
be in accord with the provisions of this Act or other competition laws,
and it finds that the issuance of a show cause order would be in the
interest of the public, the Commission shall issue and serve upon such

person or persons a written description of its business conduct



complained of, a statement of the facts, data, and information together
with a summary of the evidence thereof, with an order requiring the
said person or persons to show cause, within the period therein fixed,
why no order shall issue requiring such person or persons to cease
and desist from continuing with ties identified business conduct, or pay
the administrative fine therein specified, or readjust its business
conduct or practices,

(6) Proposal for Consent Judgment. — At any time prior to the issuance of
a binding ruling, the promulgation of a cease and desist judgment
under a show cause order or the promulgation of a decision of
judgment in any administrative, civil, or criminal case, the person or
persons, whose business conduct is under inquiry in the particular
proceedings may, without in any manner admitting a violation of this
Act or any other competition laws, submit to the Commission a written
proposal for the entry of a consent judgment, specifying therein the
terms and conditions of the proposed consent judgment.

(a) Consultations. - Prior to the fitting of a request for 2 binding ruling or
the submission of a proposal for consent judgment, the person or
persons concerned may communicate, in writing, with the Commission
‘on matiers that should be included or excluded in such request or
proposal, which the Commission may consider necessary for the
effective enforcement of this Act or other competition laws.

(e) Binding Ruting, Cease and Desist Order, and Consent Judgment. —
Based upon the facts, data, and information disclosed or supplied by
the persons concemed, or established by substantial evidence during
the hearing, the Commission shall issue a binding ruling, a cease and
desist order or an approval of the proposal for a consent judgment, as
the case may be, with or without conditions, to the effect that the
particular act, course of conduct, agreement, decision or practice is in
accord with this Act or other competition taws, or is exempt therefrom,
or constitutes. a violation thereof. If the Commission finds that there is
substantial evidence tending to show that the act, course of conduct,
agreement, decision of practice of the person or persons concerned is



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prohibited, it shall include in its decision the appropriate order requiring

the person or persons concemed to perform certain acts:

(1) Cease and Desist Order. - To cease and desist from
continuing with the identified act, course or conduct,
agreement, decision, or practice found to be in violation of the
provisions of this Act,

(2) Administrative Penalty or Fine. - To pay the fine therein fixed
and

(3) Readjustment of Business Methods. - To readjust, within @
reasonable period therein fixed, its method of doing business,
including @ corporate reorganization or divestment in the
manner and under the terms and conditions prescribed by the
Commission, as it may deem proper for the protection of the
public interest.

{) Suspension of Administrative, Civil or Criminal Proceedings. — No
pending administrative, civil or criminal proceedings or those filed
thereafter, against any person, corporation or any other juridical entity
or its officers and employees, shall be suspended, except upon order
of the Commission on proper motion, on the ground of the filing of a
request for binding ruling, the issuance of a show cause order or the
filing of a proposal for a consent judgment based, in whole oF in part,
on the same set of facts and issues as that of the proceedings sought
to be suspended;

{g) Monitoring of Compliance. — The Commission shall monitor the
compliance by the person or persons concerned, their officers, and
employees, with the final and executory binding ruling, cease and
desist order, or approval of a consent judgment. Upon mation of an
interested party, the Commission shall issue a certification to the effect
that the person or persons concemed have, or have not, as the case
may be, complied with a final and executory ruling, order, or approval,

{h) nadmissibility in Evidence. - The request for a binding ruling, the show
cause order, or the proposal for consent judgment, the facts, data, and
information therein contained or subsequently supplied by the person
‘or persons concemed; admissions, oral or written, made by them



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against their interest; all other documents filed by them including their
evidence presented in the proceedings before the Commission, and
the judgment rendered thereon, shall not be admissible as evidence in
any administrative, civib or criminal proceedings against such person or
persons, their officers, employees. and agents nor constitute a basis
for the introduction of the binding ruling, the cease and desist order, or
the consent judgment as prima facie evidence against such persons in
any such action of proceeding:

{i) Modification or Reversal of Ruling, Order or Approval. — The

Commission may motu proprio or upon petition of an interested party,

after notice and hearing, reopen and alter, modify, or set aside, im

whole or in part, a binding ruling, a cease-and-desist order, or an

approved consent judgment:

(1) Whenever conditions of material fact or law have so
changed as to require such action,

(2) When the concemed person or persons fail or refuse, without
justifiable cause therefore, to comply with any condition
attached to such ruling, order, or approval, including an order
to readjust their method of doing business; or

(3) When the ruling, order, or approval was based on deliberately
falsified material fact, data, or information supplied by an
interested party benefited by such ruling, order, or approval

The modification or reversal of a binding ruling, a cease and desist
order, of an approved consent judgment shall have no retroactive effect
and shall not affect or impair any right legally acquired prior to the
modification of reversal thereof, except, that the parly who is guilty of
unjustified failure or refusal to comply as specified in paragraph (2) hereof,
or have deliberately supplied such falsified material fact, data or
information as specified in paragraph (3) above, is barred from claiming
any vested right therein
SEC. 23, Standards. - In the exercise of its powers or in the discharge of

its duties under this act, the Commission shali consider the following:

(a) the way a given industry is structured of organized whether

monopolistic, oligopelistic, or competitive;



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(b) the ways the persons engaged in business within a given industry act,
behave or conduct themselves in such matters as setting prices,
determining output, and other relevant factors and the resulting
performance of the industry as a whole:

(c) the supply and demand situation for the relevant goods or services;

(d) the appreciable impact of the particular market conduct on market
conditions, if any,

(@) the need to bring together complimentary skills to avoid duptication and
promote efficiency in the industry;

(f} the need to determine whether or not the anticompetitive effect of a
particular market conduct may be offset by increased efficiency and
reduction of excessive or unnecessary expenses;

(g) the cost and profit levels of the industry;

{h) the need to increase productivity in the particular industry involved,

(@ the state of the industry, including the need to develop it or to save it
from its distressed state;

(D the need of the industry to work more rationally and increase their
productivity and competitiveness on a larger market;

{k)the need to respond to intemational competition and other
developments in the intemational market;

(the need to encourage or develop smail and medium-sized industries,

(mythe impact of the market conduct on the economy and on the
consuming public, particularly low income groups,

{n) the need to pool capital resources;

(0) the extent to which the consumers have 2 possibility of choice of the
product or service involved;

{p) the economic and financial power of the parties concemed;

{@) the attainment of the objectives which are given priority interest in the
general interest of the country, including the need for accelerated
industrialization; and

() the extent to which less restrictive practices are available.

SEC. 24. Contempt. — The Commission or any of its Divisions may

summarily punish for contempt by imprisonment not exceeding thirty (30) days or

by fine, or both, any person guilty of such misconduct in the presence of the



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Commission or any of its Divisions in its vicinity as to seriously interrupt any
hearing, session or any proceedings before it, including cases in which a person

willfully fails or refuses, without just cause, to comply with a summon, subpoena
‘or subpoena duces tecum legally issued by the Commission or any of its Division,
being present at a hearing, proceeding, session or investigation, refused to be
swom as a witness or to answer questions or to furnish information when lawfully
required to do so.

SEC. 25. De
en banc shall be appealable to the Court of Appeals as hereinafter provided. The
appeal shalt not stay the order, ruling or decision sought to be reviewed, unless
the Court of Appeals shall direct otherwise upon such terms and conditions it may
deem just

SEC. 26. Appeal to the Court of Appeals. - Any party who has actively
patticipated in the proceedings before the Commission and is adversely affected

ions of the Commission. - Decisions of the Commission

by a binding ruling, order, or resolution, decision, judgment, rule or regulation
promulgation after notice and hearing by the Commission sitting en banc, may
appeal, by means of a notice of appeal and a verified petition for review served
upon the Commission and other parties who actively participated in the
proceedings, to the Court of Appeals within thirty (30) days from receipt thereof,
‘on the ground that the appealed action of the Commission:

(a) is arbitrary to constitutional rights, power, privilege, or immunity;

(b) is contrary to constitutional rights, power, privilege, or immunity;

{c) is in excess of statutory jurisdiction, authority, or limitations, or is

contrary to law:

(d) is without observance of the Procedure required by law; and

{e) is not supported by substantial evidence.

‘The Commission shall be included as a party respondent to the case and
shali be represented by its own legal staff.

SEC. 27. Appeal to the Supreme Court — A decision of the Court of
Appeals may be appealed to the Supreme Court in the manner and on the
grounds prescribed by the Rules of Court.

SEC, 28. Reception of Additional Evidence. — Any party in the
appellate proceedings may apply for leave to the Court of Appeals or the
Supreme Court, to adduce additional evidence before the Commission. The



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Court may, under such terms and conditions as it may prescribe, order the

Commission to receive such additional evidence upon showing that it is material
‘and there are reasonable grounds for the failure to present said evidence in the
proceedings before the Commission. The Commission, sitting en banc, may
modify its findings as to the facts, or make new findings, by reason of the
additional evidence taken, and it shall file with the appellate court such modified
or new findings and its recommendations for the affirmation, modification, or
setting aside of the appealed binding ruling, order, resolution, decision, judgment,
tule or regulation.

SEC. 29. Writ of Execution. - Upon the finality of its binding ruling,
order, resolution, decision, judgment, or rule or regulation, (collectively.
“Decision"), the Commission may issue a writ of execution to enforce its
decision and the payment of the administrative fines provided in the preceding
sections.

SEC. 30. Violation by Corporation, Partnership, Association, and
Other Entity. — Whenever a corporation, partnership, association, firm or other
entity, whether domestic or foreign, shall commit any of the acts declared to be
unlawful under this Act, the Chairperson of the Board of Directors, the President,
the General Manager of the corporation, the general partners of a partnership,
and the officers and employees directly responsible, shall be jointly and severally
liable with the firm for the fine imposed therein.

Should the offense be committed by a foreign corporation licensed to do
business in the Philippines, the person or persons directly responsible in the
Philippines for the management and operation thereof, shall be liable. In
addition, its license to do business in the Philippines shall be cancelled.

It shall not be a defense for the Chairperson of the Board of Directors, the
President or the General Manager of a corporation or the general partners of a
partnership, or the persons responsible for the management and operation ofa
foreign corporation licensed to do business in the Philippines, that the person
was unaware of the violation, unless, it can be established to the satisfaction of

the court that even with the exercise of due diligence and proper supervision, the
person could not have avoided or prevented the violation,

Any agreement between an officer, partner or any other officer and a
corporation or partnership whereby the latter directly or indirectly agrees to



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assume, satisfy or indemnify, in whole of in part, the fine of civil obligation
imposed under this Act of such corporate officer, partner, manager or other
officer found guilty of violating this Act, shall be void.

SEC, 31. Alien Violators. — If the person violating any provision of this
Act is a foreigner, said person shall, in addition to the other penalties imposed
herein, be deported after service of sentence without need of any further
proceedings.

SEC. 32, Essential Commodities. - If the violation involves the trade or
movement of prime commodities such as rice, com, sugar, chicken, pork, beef,
fish, vegetables, and other articles or commodities of prime or basic necessity as.
declared by the appropriate government agency, through publication, the fine
imposed by the Commission or the courts, as the case may be, shall
automatically be tripled and the offender shall pay such threefold fine.

SEC. 33. Private Action. — Regardless of the status or pendency of any
proceedings, any firm that suffers injury by reason of any violation of this Act may
institute a separate and independent civil action, imespective of the amount
involved in the controversy against the defendant or defendants and shall recover
treble damages sustained, the costs of suit and reasonable attomey’s fees:
Provided, however, That no filing fees shall be collected: Provided, further, That
filing fees shall constitute a first lien in the award of damages.

SEC, 34. Effect of Final Judgment. — Any final judgment in a civil or
cfiminal action brought by the Commission on behalf of the people of the
Philippines under this Act to the effect that a defendant has violated any or all of
the provisions of this Act shall be res judicata as to any claim by any person on
whose behalf such action was brought: Provided, That such person notifies the
court having jurisdiction of the case within the period given by the court
Provided, further, That such period shall not be less than ninety (90) days.

It shall be prima facie evidence against such defendant in any civil action
brought by any other party under this Act as to all matters respecting which said
judgment would be an estoppel as between the parties concerned.

SEC. 35. Distribution of Damages Recovered. — The damages
recovered in a civil action under Section 20 of this Act shall be distributed in the
following manner: (1) as determined and to be authorized by the Court having

jurisdiction of the case; (2) ten percent (10%) of the total amount of damages



shall accrue to the Commission and/or regulatory agency to be used exclusively
in the enforcement of this Act, and, (3) the remainder of which total amount of
damages shall be deemed a civil penalty by the Court and shall be deposited to
the National Treasury as part of the general fund of the govemment: Provided,
‘That any distribution procedure adopted by the Court shall give preference to
individual consumers and afford each interested person a reasonable opportunity

to secure his appropriate portion of the net damages obtained.

SEC. 36. Measurement of Damages. - Damages may be proved and
assessed in the aggregate by statistical or sampling methods, by the computation
of iNegal overcharges, or by such other reasonable system of estimating
aggregate damages as the court in its discretion may permit without the necessity
of separately proving the individual claim, of, or amount of damage to, persons on
whose behalf the suit was brought,

SEC. 37. Immunity fram Suit. — The Commissioners and the Staff of the
Commission shall not be subject to any action, claim or demand in connection
with any act done or omitted by them in the performance of their duties and
exercise of their powers, except for those acts and omissions done in evident bad
faith or gross negligence.

The Commission shall indemnify each Commissioner and Staff of the
Commission for all costs and expenses reasonably incurred by such persons in
connection with any civil or criminal actions, suits or proceedings to which they
may be or made a party by reason of the performance of their dulies or exercise
of their powers, unless they are finally adjudged in such actions or proceedings to
be liable for evident bad faith or gross negligence.

CHAPTER VI
OTHER PROVISIONS.

SEC. 38, Statute of Limitations, - Any civil or criminal action to enforce
any cause of action arising from a violation of any provision of this Act shall be
forever barred unless commenced within five (5) years after the cause of acton
accrues. The running of the statute of limitation shall be suspended during the
pendency of any proceeding

The cause of action begins to run when the plaintiff suffers injury to its
business or property: Provided, That when the damage suffered by the plaintiff is
too speculative to prove, the cause of action does not accrue until the damage



aueuna

a

15

becomes probable: Provided, however, That if the plaintiff's injury is the result of
the continuing violations of this Act, each independent anti-competitive act may
restart the limitation period or when a plaintiff reasonably fails to uncover a cause
‘of action that was fraudulently concealed by a defendant.

SEC. 39. Prohibition on the Issuance of Temporary Restraining
Orders, Preliminary Injunctions and Preliminary Mandatory injunctions. —
Except for the Supreme Court, no other court shall issue any temporary
restraining order, preliminary injunction or preliminary mandatory injunction
against the regulatory agency in the exercise of its duties or functions: Provided,
‘That, this prohibition shall apply in all cases, disputes or controversies instituted
by a private party, including, but not limited to, cases filed by regulated firms or
those claiming to have rights through such firms: Provided, however, That, this
prohibition shall not apply when the matter is of extreme urgency involving @
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 shail file a bond, in an amount to be fixed by the Court, but in
no case shall it be less than half of the imposable fines provided for under
Section 11 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 regulatory agency.

‘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.

The Supreme Court may designate regional trial courts to act as
commissioners with the sole function of receiving facts of the case involving the
acts of the regulatory agency. The designated Regional Trial Court shall, within
thirty (30) days from the date of receipt of the referral, forward its findings of facts
to the Supreme Court for appropriate action.

SEC. 40. Intellectual Property Rights. — The implementation of the
provisions of this Act shall be without prejudice to the rights, liabilities and
remedies under Republic Act No. 8293, otherwise known as the Intellectual



30

Property Code of the Philippines: Provided, That, the exercise of intellectual
property rights shall notin any way be used to justify vielaions of this Ack

SEC, 41, Trade Associations. ~ Nothing contained in this Act shall be
construed to prohibit the existence and operation of trade associations organized
to promote quality standards and safety issues: Provided, That, these
associations shall not in any way be used to justify any violation of this Act.

SEC. 42. Congressional Oversight Committee. - To oversee the
implementation of this Act, there shall be created a Congressional Oversight
Committee on Fait Competition (COCFC) to be composed of the Chairpersons of
the Senate Committees on Trade and Commerce, Economic Affairs, and
Finance, the Chairpersons of the House of Representatives Committees on
‘Trade and Industry, Economic Affairs and Appropriations; andl two members each
from the Senate and the House of Representatives whe shall be designaied by
the Senate President and the Speaker of the House of Representatives:
Provided, That one of the two Senators and one of the two House Members shal
be nominated by the respective Minority Leaders of the Senate and the House of
Representatives. The Congressional Oversight Committee shall be jointly chaired
by the Chairpersons of the Senate Committee on Trade and Gommorce an the
House of Representatives Commitee on Trade and Industry. The Vice-Chair of
the Congressional Oversight Committee shail be jointly held by the Chairpersons
of the Senate Committee on Economic Affairs and the House of Representatives
Committee on Economic Affairs.

‘The Secretariat of the Congressional Oversight Committee on Fair
Competition shall be drawn from the existing personnel of the Senate and House
of Representatives committees comprising the Congressional Oversight
Committee.

CHAPTER Vil
FINAL PROVISIONS

SEC, 43. Implementing Rules and Regulations. ~ The Commission
shall prepare the necessary rules and regulations within one hundred twenty
(420) days from the effectivity ofthis Act Provided, That, where the same would
apply to an industry or a'sub-sector of industry that is subject to the jurisdiction of
a regulatory agency, the Commission shall, in preparing the guidelines, consult
with the concemed regulatory agency and stakeholders: Provided, further, That



wo

»

YW

the Commission may revise such guidelines as it deems necessary: Provides,
however, That such revised guidelines shall only take effect following its
publication in two newspapers of general circulabon-

SEC, 44, Appropriations. - The amount necessary to implement the
provisions of this Act shall be included in the annual General Appropriations Act.
However, for the initial budgetary requirements of the Commission, the amount of
One hundred million pesos (P'100,000,000.00) is hereby appropriated: Provided,
That all moneys recovered or charges or composition sums collected under this
‘Act, other than financial penalties, shall be paid into and form part of the moneys
of the Commission.

SEC. 45. Transitory Provision. - For the purpose of ensuring that the
Commission is organized within the mandated period of one hundred eighty (180)
days after the approval of this Act, an Inter-Agency Task Force shall be created
and composed of the following agencies:

a) Agencies which will provide administrative support to the Commission:

| Office of the President, to be represented by the Executive
Secretary with the Deputy Executive Secretary for Legal Affairs as
alternate:

ji. Department of Budget and Management, to be represented by the
Secretary with the Undersecretary in charge of organization of new
offices and position classifications as alternate;

b) Agencies which currently perform functions germane or are related to
the purposes of the Commission:

i. Tariff Commission, to be represented by the Chairperson and with
an Associate Commissioner permanently designated as alternate;

ii. Department of Trade and Industry, to be represented by the
Secretary with the Director of the Bureau of Trade Regulation and
Consumer Protection as alternate representative:

iii, Department of Justice, to be represented by the Secretary with an
officer holding at least an Assistant Secretary rank as alternate.

The Task Force shall also meet in Executive Session with all the agency
heads to detiberate on possible appointees for the position of Chairperson and
Associate Commissioners of the Commission for submission to and consideration
of the President of the Philippines.



32

The Task Force shall also commence the coordinated advocacy for this
‘Act within ninety (80) days from the effectivity thereof. It shall also implement a
broad-based consultation on inputs for the Implementing Rules and Regulations
of this Act which must be completed within one hundred twenty (120) days from
the effectivity of this Act. The report on the consultations shali be submitied to the
Commission within fifteen (15) days from its establishment a copy of which will be
furnished to the Congressional Oversight Committee on Fair Competition.

SEC. 46. Suppletory Application. — For purposes of this Act, the
Revised Penal Code, as amended, and other applicable laws shall be applied in
a suppletory character.

SEC. 47. Separability Clause. — If any clause, sentence, section or part
of this Act shall be adjudged by a court of competent jurisdiction to be invalid,
such judgment shall not affect, impair or invalidate the remainder of this Act, but
shall be confined in its operation to the clause, sentence, paragraph, section, or
part thereof directly involved in the controversy

SEC. 48. Repealing Clause. - The following laws, insofar as they are
inconsistent with any of the provisions of this Act, are hereby repealed, amended
of otherwise modified accordingly:

(a) Sec. 5 (3) of Republic Act No, 7581 or The Price Act;
{b) Sec. 5 (f) of Republic Act No. 7925 or The Public Telecommunications

Policy Act;

(c) See. 11 (a) and {o) of Republic Act No. 8479 or The Downstream Oil

Industry Deregulation Act,

() Sec. 45 of Republic Act No. 9136 or The Electric Power industry Reform

Act:

{e) Sec. 13 of Republic Act No. 9295 or The Domestic Shipping Development

Act;

(f) Sec. 24 and 25 of Republic Act No. 9502 or The Universally-Accessible

Cheaper and Quality Medicines Act

Provided, That in case of conflict between this Act and such provisions of
existing competion laws and regulations, the provisions of this Act shall preva

SEC. 49. Effectivity Clause. — This Act shall take effect fifteen (15) days
following its publication in the Officiat Gazette and in at jeast two (2) national

newspapers of general circulation: Provided, however, That in order to allow



affected parties time to renegotiate agreements or restructure their business to
comply with the new competition faw, the penal provisions under Section 12 of

this Act, except for those already prohibited under the Revised Penal Code, shall
be imposed one (1) year after the effectivity of the Implementing Rules and
Regulations of this Act.

Approved,



FACT SHEET
House Bilt Na. 4835 - —

(In substitution of House Bill Nos. 549, 913, 1007, 1583, 1733
1980, 3100, 3134, 3244, 3476, 3534 and 3985)

AN ACT PENALIZING ANTI-COMPETITIVE AGREEMENTS, ABUSE OF
DOMINANT POSITION, AND ANTI-COMPETITIVE MERGERS,
ESTABLISHING THE PHILIPPINE FAIR COMPETITION
COMMISSION AND APPROPRIATING FUNDS THEREFOR, AND
FOR OTHER PURPOSES

Introduced by: Representatives Ponce-Enrile, Yap, Alvarez A., Apacible, Arroyo D.,
Macapagal-Arroyo G., Teodoro, Rodriguez R., Rodriguez M. Jr., Garcia A., Benitez,
Aumentado, Umali R., Umali C. Tafiada, Gulk Belmonte F., Miraflores, Nograles,
Durano, Duavit, Biron, Defensor, Trefias, Casifio, Villarica, Mandanas, Fermandez,
Garay, Det Rosario A.G., Sacdalan, Osmefa, Joson, Rodriguez |., Lacson-Noel, Yu,
Ferrer J., Sahidula, Lagdameo A., Bonoan-David, Mellana, Sakaluran, Quisumbing,
Unabia, Singson R., Batocabe, Colmenares, Haresco, Villar, Pancho, Enverga,
Cojuangeo E., Cajayon, Tugna, Ty, Romualdez. Gonzales A., Panotes, Bagasina, Cua,
Garin S., Castelo, Javier, Evardone, Bulut-Begtang, Alvarez M., Plaza, Palmones,
Magsaysay E., Almario, Bello, Tinio, Rivera, Datumanong and Pangandaman S.

Primary Committee Referral: COMMITTEE ON TRADE & INDUSTRY
Committee Chairperson: REP. ALBERT RAYMOND S. GARCIA
Secondary Committee Referral: COMMITTEE ON ECONOMIC AFFAIRS

Committee Chairperson: REP. RAMON DURANO IV

OBJECTIVES:

« To promote and enhance economic efficiency and full competition in trade,
industry and all commercial economic activities.

* To prevent the concentration of economie power in a few persons who threaten
to control the production, trade, or industry in order to stifle competition, distort,
manipulate or constrict the discipline of free markets, increase market prices.



To penalize all forms of unfair trade, anti-competitive conduct and combinations
in restraint of trade, with the objective of protecting and advancing consumer

welfare.

KEY PROVISIONS:

Mandates that this Act shall be enforceable within the territory of the Republic of
the Philippines and shall apply to all areas of trade, industry and commercial
economic activity. It shall likewise be applicable to international trade having
direct, substantial and reasonably foreseeable effects in trade, industry or
commerce in the Republic of the Philippines including those that result from acts
done outside the Republic of the Philippines

Provides that the Act shall apply to: (a) all firms as defined and all their
commercial agreements, actions or transactions involving goods, services or
intellectual property; and, (b) all agents, officers, employees, partners, owners,
directors, consultants, stockholders, representatives, managers, supervisors, and
all other natural persons who, acting on behalf of juridical persons shail
authorize, engage or aid in the commission of restrictive practices prohibited
under this Act;

Identifies and defines prohibited acts such as anticompetitive agreements, and
abuse of dominant position (such as, but not limited fo, predatory behaviour
towards competitors, price fixing, bid rigging, fimitation and control of markets,
market allocation, arrangements fo share markets or sources of supply, price
discrimination except those that are considered permissible], exclusivity
arrangement, tie-in arrangement, and boycott);

Prohibits mergers, consolidations or asset acquisition where the effect of such
maybe to substantially lessen competition, or tend to create a monopoly.
Nevertheless, it also identifies instances where stock or asset acquisition or
ownership shall be permissible and the bill sets down requirements thereon. As
such, it requires notification prior to stock or asset acquisition if as a result of the
acquisition, the acquiring firm would own twenty percent (20%) or more of the
shares of stock or assets of the acquired firm.

imposes a fine of not less than Ten Million Pesos (Php10,000,000.00) and not
exceeding Fifty Million Pesos (Php50,000,000.00) if a natural person; by a fine of
not less than Two Hundred Fifty Million Pesos (Php250,000,000.00) but not
exceeding Seven Hundred Fifty Million Pesos (Php750,000,000.00) if a firm, at
the discretion of the Commission, for violations.



Establishes the Philippine Fair Competition Commission (PFCC), an independent
body which shall have original and exclusive jurisdiction to enforce and
implement the administrative provisions of this Act. The Commission shall be -
composed of a Chairperson and four (4) Associate Commissioners. The
Chairperson and the Associate Commissioners shall be appointed by the
President ofthe Philippines. The term of office of the Chairperson and the
Associate Commissioners shall be six (6) years without reappointment.

Mandates that upon prior notice and hearing, the Commission shail have the
power to, among others, issue binding rulings, show cause orders, and
thereafter, render decision thereon, approve, oF disapprove, proposals for
consent judgment, conduct the required preliminary inquiry of cases involving
Violations of this Act and other competition laws; and thereafter, if appropriate,
sign and file the proper criminal complaint before the Department of Justice, and
impose the appropriate administrative fines or penalties;

Provides that the Commission, without hearing, shall have the power to,
commence investigation, on its own initiative or upon the complaint of any
person, any and all violations of this Act, cause the issuance of a cease and
desist order prior to the commencement of a preliminary inquiry, and/or the
institution of a civil or administrative action, require any government agency to
lend assistance and information necessary in the discharge of its responsibilities
under this Act and examine if necessary, pertinent records and documents in the
possession of such government agency, and to issue subpoena, ‘subpoena
Suces tecum and subpoena ad tesiificandum in the exercise of its functions,

powers and duties;

Mandates that the exercise of regulatory powers by different government
agencies, including local government units, over an industry or a sub-sector of an
industry shall be cumulative and shall not be construed in any way as derogating
from the power and authority of the concerned agency. The government
agencies shall cooperate and coordinate with one another in the exercise of their
powers in order to prevent overlap, to share confidential information, or for other
effective measures. The Commission can seek technical assistance from
sectoral regulators.

Provides that the Commission shall have primary and sale jurisdiction over
competition issues, while the regulatory body shall continue to exercise
jurisdiction over all matters with regard to the firms’ operation and existence.

Provides for a whistleblower mechanism whereby any person or firm which
cooperates or furnishes any information, document or data to the Commission
before or during the conduct of the preliminary inquiry that constitutes material



evidence shail be immune from any suit or charge including from affected parties
and third parties: Provided, That the person or firm is not the most guitty.

Provides for leniency via Nolo Contendere Resolution whereby any firm under
inquiry may submit to a nolo contendere resolution at any time before the
termination of the preliminary inquiry by: a) the payment of an amount within the
range of penalties; b) by entering into an undertaking to effectively stop and
rectify the acts complained against, make restitution to the affected parties,
whether or not the parties are plaintiffs or witnesses; and, c) by submitting
regular compliance reports as may be directed.

Provides for an initial fund of One Hundred Million Pesos {P100,000,000.00) for
its implementation. Thereafter, such amounts as may be necessary shall be for
the continuous implementation of the Act shall be included in the Annual General
Appropriations Act. All moneys recovered or charges or composition sums
collected under this Act, other than financial penalties, shall be paid into and form
part of the moneys of the Commission.

RELATED LAWS:

» Sec. 5 (3) of Republic Act No. 7581 or The Price Act,

Sec. 5 (f) of Republic Act No. 7925 or The Public Telecommunications
Policy Act;

« Sec. 11 (a) and (b) of Republic Act No. 8479 or The Downstream Oil
Industry Deregulation Act;

» Sec. 45 of Republic Act No. 9136 or The Electric Power Industry Reform
Act:

* Sec. 13 of Republic Act No. 9295 or The Domestic Shipping Development
Act;

» Sec. 24 and 25 of Republic Act No. 9502 or The Universally-Accessible
Cheaper and Quality Medicines Act.



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH (15™) CONGRESS:
First Regular Session

MINUTES OF THE MEETING OF THE COMMITTEE ON TRADE AND INDUSTRY JOINT WITH
COMMITTEE ON ECONOMIC AFFAIRS HELD ON FEBRUARY 22, 2011 AT ROLANDO ANDAYA
HALL, HOUSE OF REPRESENTATIVES COMPLEX, BATASAN HILLS, QUEZON CITY

&  CALLTOORDER.

Rep. Albert Raymond $. Garcia, Trade and Industry Committee Chairman and Co-
Presiding Officer, called the meeting to order at 3:31 p.rn.

I ACKNOWLEDGMENT OF RESOURCE PERSONS AND GUESTS

Upon order of the Rep. Garcia, Committee Secretary Valentino Palanca
acknowledged the following guests: Atty. Francis Lim of ACCRA Law Office; Director Victor
Mario Dimagiba, Bureau of Trade Regulation and Consumer Protection under the
Department of Trade and industry; Commissioner Edgar Abon af the Tariff Commission;
Atty. Tony Salvador, representing the Office of Deputy Speaker Tanada and IDEALS; and Mr.
Melf Kuehl of Gesellschaft fur Internationale Zusammernarbeit/Konrad Adenaver Stiftung,
(G1z/KAs).

Nl, REVIEW OF HIGHLIGHTS OF PREVIOUS HEARING AND OPENING REMARKS OF THE
CHAIRMAN DURANO OF THE COMMITTEE ON ECONOMIC AFFAIRS

Rep, Garcia thanked the resource persons present for responding favorably to the
Committee’s invitation to the meeting. Thereafter, he reported the highlights of the
previous hearing (February 8, 2011) for everyone’s benefit. tt included the observation of
Rep. Yu regarding the imposition of penalties in case the violator was a juridical person.
‘There was a subsequent discussion on the need to identity categorically who and up to what
level in the corporation's management or board should be jailed in case a firm was faund to
be criminally liable.

He then turned over the floor to Rep. Durano for his opening remarks. In turn, Rep.
Durano mentioned his observations on the current form of the draft bill, viz: idéntification of
able persons in case the violator is a corporation; jurisdiction of the competition
commission vis-a-vis the existing regulatory agencies; grant of immunity from suit of
‘commission members; and lastty, review of the threshold figure (percentage) for purposes of
defining “control” in a corporation.

IV, _ DISCUSSION PROPER OF DRAFT BILL UNDER REP, TOMAS APACIBLE, CHAIR OF THE
‘TECHNICAL WORKING GROUP {TWS)



Fag 12

Rep. Apacible narrated the conduct af several hearings by the Technical Working
Group and how it has come up with the current output. First to be highlighted is the
creation of thé Philippine Fair Competition Cammission under Section 5. Section 6 covers_
original and exclusive jurisdiction of the Commission to enforce and implement the
administrative provisions of this Act. In section 7, there was discussion as regards venue and
jurisdiction,

CRIMINAL LIABILITY

‘As regards criminat liability, Rep. Tomas D, Osmena commented that the criminal
provisions be left out of the bill as it creates prablems in terms of implementation. He
suggested that the Commission concentrate on the administrative aspect and observe if it
will achieve the objective of a level playing field. Atty. Francis Lim of ACCRA Law agreed and
opined that before civil or criminal cases are filed, the SEC should conduct a preliminary
inquiry as it has competence to determine if there really was a violation.

SUNRISE PROVISION

On the issue of the sunrise provision whereby the criminal penalties shall be in effect
after a year, it was reckoned that the formation of the infrastructure (180 days), the
formulation of the implementing rules and regulation (120 days) and the advocacy period
will amount to one (1) year and 300 days. Atty. Lim suggested to extend the sunrise
provision to 3 years. However, his subsequent request for a 2 year extension was objected
to by Rep. Rufus Rodriguez as being too long. Nevertheless, the body adopted the earlier
suggestion of Atty. Lim that both the civil and criminal penalties shall he held in abeyance for
the duration of the sunrise period,

POWERS OF CONCERNED REGULATORY AGENCIES

A lengthy discussion ensued on Section 14 regarding the powers of concerned
regulatory agencies and the bil provision for its cumulative nature, to wit; The PFCC shall
primary and sole jurisdiction over competition issues, while the regulatory body shall
continue to exercise jurisdiction over all matters with regard to the firms’ operations and
existence. Director Dimagiba correlated this provision with the one in Section 45 or the
Repealing Clause as it listed specific provisions of other laws. Further, Rep. Osmena
mentioned a case in Davao where the franchise-holder (PLOT) did not put up telephone
service in a particular area and the local government allowed another entity to provide the
service. In the ensuing court case filed by PLDT, the court upheld the power of the local
government under its general welfare clause to grant the right to the new entity. He
clarified that along with concerned regulatory agencies, the local governments should also
be mentioned as another entity which shalt retain its powers over similar matters.

WHISTLEBLOWER PROVISION

Mr. Mel Kuehl from GIZ/KAS observed that under Section 19 on immunity of
whistleblowers, f there were a series of accusations that walked uphill in a certain firm, then
maybe there should be a reduction of punishment rather than grant of immunity. Rep.
Rodriguez opined however that this matter can be left to the sound discretion of the
Commission if the need ever arises.



ACTION BY THE JOINT COMMITTEE

The body established that all discussions and agreements should be refiected on the
draft bill subject to style. Forthwith, upon motion of Rep. Rodriguez, seconded by Reps.
Apacible and Sharon Garin, the draft bill was approved by the Joint Committee , subject to
style.

Vi, ADJOURNMENT

There being no other matter on the agenda, the meeting was adjourned at 4:39
pm.

Certified true and correct ta the best of our knowledge and ability,

Prepored by:

FTINO R, PALANCA,

Committee Secretary fmmittee Secretary
Committee/on Economic Affairs ‘ommittee on Trade and industry
NOTED BY:

“RED” H. DURANO VI
Charman
Committee on Economic Affairs

$. GARCIA

ommitteen Trade and Industry


of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO._049

Introduced by Congressman JUAN C. PONCE ENRILE, JR.

EXPLANATORY NOTE

Article XTI, Section 19, of the 1987 Philippine Constitution provides:

“Section 19. 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.”

Section 22 of the same Article encourages the promulgation of legislation that would impose
civil and criminal sanctions against those who circumvent or negate this principle. Hence.
Section 22 of the Constitution provides

“Section 22. Acts which circumvent or negate any of the provisions of this
Article shall be considered inimical to the national interest and subject to
criminat and civil sanctions, as may be provided by law”

Amidst the difficult economic conditions we are presently laboring under, it is not very
difficult to imagine how artificial prices in one or two commodities are able to directly or
indirectly saise the prices of related goods and services It is imperative that our people be
protected against exploitative price manipulators

Admittedly, cumevous legislations have been passed pursuant to the sbave-quoted
Constitutional mandate. However. the incieased devioustess and complexity of schemes in
perpetuating. monopolies in the free market necessitates an equally sophisticated legislation
that would effectively address this concern.

This Bill proposes to penalize combinations or conspiracies in restraint of trade and all forms
of artificial machinations that will injure, destroy or prevent free market competition

For these reasons, the passage of this Bill is earnestly sought



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

549

HOUSE BILL NO,

Introduce by Congressman JUAN C. PONCE ENRILK, JR.

AN ACT
PROHIBITING MONOPOLIES, ATTEMPT TO MONOPOLIZE AN INDUSTRY OR
LINE OF COMMERCE, MANIPULATION OF PRICES OF COMMODITIES, ASSET
ACQUISITION AND INTERLOCKING MEMBERHIPS IN THE BOARD OF
DIRECTORS OF COMPETING CORPORATE BODIES AND PRICE
DISCRIMINATION AMONG CUSTOMERS, PROVIDING PENALTIES
THEREFORE, AND FOR OTHER PURPOSES

Be it enacted by the Senate and the House of Representatives of the Philippines in Congress
assembled:

Section 1. Tifle. — This Act shall be known and cited as the “Philippine Anti-Trust Act.”

Section 2, Definition of “Persun” or “Persons”. — The word “person” or “persons”,
whenever used in this Act, shall be deemed to include not only individual or individuals but
also corporations, partmerships, and associations existing under or authorized by the Jaws of

the Philippines or by the laws af any foreign country.

Section 3. Agreements, Contracts, Combinations, or Conspiracies in Restraint of Trade and
Price Manipulation. — Every agreement or contract, combination in the form of trust or
otherwise, or conspiracy, expressed or implied, in restraint of trade or commerce inside the
country or with foreign nations or foreign territories, are hereby declared illegal and,
therefore, it shall be unlawful for any person to enter in, or to make, of to be a party tu any
such contract or combination or conspiracy, and any such shall be deemed guilty of an
offense. Provided, That nothing herein contained shall render iegal, any agreement or
contract prescribing minimum prices for the resale of a commodity which bears or the label or

container of which bears, the trademark, brand, or name of the producer or distributor of such


commodity and which is in free and open competition with commodities of the same yeweral
class produced or distributed by others: Provided, further, That the preceding proviso shall
not make lawful any agreement or contract, combination or conspiracy providing for the
establishment or maintenance of minimum resale prices on any commodity herein involved,
between manufacturers, or between prothcers, or between wholesalers, or between brokers, or

between factors, or between retailer, or between persons, firms, or corporations in competition
with each other.

Section 4. Monopoly or Attempt to Monopotize. ~ it shall be unlawful for any person to
monopolize, or attempt to monopolize, or to combine or conspire, expressly or impliedly, with
any other person oF persons, 10 monopolize any part of the wade or commerce within the
country, or with sny foreign country or territory, and any such person shall be guilty of an
offense, Provided, That nothing contained in this Act shall render unlawtul the right of a
patent holder or a copyright holder to enjoy the benefit of his of its patent or copyright duly
registered in the P'

pines or in any foreign country with which the Philippines is a co-
signatory to any treaty or convention that protects rights to an invention patent or to &
copyright, as the case may be.

Section 5, Price Discrimination — (A) It shall be unlawful for any person engaged in
commerce, in the course of such commerce, either directly or indirectly, to discriminate in
price between different purchasers of commodities of like grade and quality, where either or
any of the purchasers involved in such discrimination are in commerce, where such
commodities are sold for use, consumption, or resale within the Philippines, and where the
effect of such discrimination may be substantially to lessen competition or trend to create
monopoly in any line of commerce, or to injure, destroy, or to prevent competition with any
person who either grants or knowingly receives the benefit of such discrimination, or with
customers of either of them: Provided, That nothing herein contained shall prevent
differentials which make oaly due allowance for differences in the cost of manufacture, sale,
or delivery resulting from the differing method or quantities in which such commodities are to
such purchasers sold or delivered: Provided, however, That the Secretary of the Department
of Trade and Industry in the case of non-agricultural commodities and the Secretary of the
Departnient of Agriculture in the case of agricultural commodities may, after due notice,
investigation and hearing to al interested parties, fix and establish quantity limits, and revise
the same as the Secretary concerned finds necessary, as to particular commodities or classes
of commodities, where such Secretary finds that available purchasers in greater quantities are
30 few as to renider differentials on account thereof unjustly discriminatory or promotive of
monopoly in any line of commerce within the jurisdiction of his Department, and the


foregoing shall not be construed to permit differentials based on differences in quantities
greater than those so fixed and established: Provided, further, That nothing herein contained
shall prevent persons eogaged in selling goods, wares, or merchandise in commerce from
selecting their own custamers in bona fide transactions and not in restraint of trade: And
Provided, finally, That nothing herein contained shall prevent price changes from time to time
in response to changing conditions affecting the market for or the marketability of the goods
concerned, such as but not limited ta actual or imminent deterioration of perishable goods,
obsolescence of seasonal goods, distress sales under court process, or sales in good faith in
discontinuance of business in the goods concerned

{B) It shall be unlawful for any person engaged in commerce, in the course of such

commerce, to pay or grant, or to receive or accept, anything of value as a commission,
brokerage, or other compensation, or any allowance or discount in lieu thereof, except for
services rendered in connection with the sale or purchase of goods, wares, or merchandise,
either to the other party to such transaction or to an agent, representative, of other
intermediary therein where such intermediary is acting, in fact for or in behalf, or is subject 1o
the direct o indirect control, of any party to such transaction other than the person by whom

such compensation is so granted or paid

(©) It shall be unlawful for any person engaged in commerce to pay or contract for the
payment of any!

ing of value to or for the benefit of a customer of such person in the course
cof such as compensation or in consideration fur any services or facilities furnished by o!
through such customer in connection with the processing, handling, sale, or offering for sale
of any products oF commodities manufactured, sold, or offered for sale by such person, unless
such payment or consideration is available on proportionally equal terms to all other
customers competing in the distribution of such products or commodities.

(D) It shal be unawful for any person to discriminate in favor of one purchaser against
another purchaser or purchasers of a commodity bought for resale, with or without processing,
by contracting to furnish or furnishing, or by contributing to the furnishing of, any services or
facilities connected with the processing, handling, sale, or offering for sale of such
commodity so purchased upon terms not accorded to all purchasers on proportionally equal

terms,

(E) It shall be unlawful for any person engaged in commerce, in the course of such commerce,
knowingly to induce or receive discrimination in price which is prohibited by this Section

{€) Upon proof being made, at any hearing on a complaint under this Section, that there has
been discrimination in price or service or facilities furnished, the burden of rebutting the


prima-facie case thus made by showing justification shall be upon the person charged with a
violation of this Section, and unless justification shall be affirmatively shown, the Secretary

concerned is authorized to issue an order terminating the discrimination: Provided, however,
That nothing herein contained shall prevent a seller rebutting the prima-facie case thus made
by showing that his lower price or the furnishing of services or facilities to any purchaser or
purchasers was made in good faith to meet an equally low price of a competitor, or the

services or facilities furnished by a competitor.

Section 6. Prohibited Stipulations in Lease or Sules Contracts, — It shall be unlawful for any
person engaged in commerce, in the course of such comuterce, to lease or make or make a
sale or contract for the sale of yoods, wares, merchandise, machinery, supplies, or other
commodities, whether patented on unpatented, for use, consumption, or resale within the
Philippines, or fix a price charged therefore, or discount from, or rebate upon, such price, on
the condition, agreement, or understanding that the lease or purchaser thereof shall not use or
deal in the goods, wares, merchandise, machinery, supplies, or other commodities of a
competitor of the lessor or seller, where the effect of such lease sale or contract for sale or
such condition, agreement, or understanding may be to lessen competition or tend to create a

monopoly in any line of commerce.

Section 7. Prohibited Stock or Asset Acquisition. - No person engayed in commerce or in
any activity affecting commerce shall acquire, directly or indirectly, the whole ur any part of
the stock or other share capital or the whole or any past of the assets of another person
engaged also in commerce or in any activity affecting commerce, where in any line of
‘commerce in any activity affecting commerce in the country ot in any part of the country, the
effect of such acquisition may be substantially to lessen competition or tend to create a

monopoly

Section 8 Prohibited Grunt ur Proxies or voting Rights. — No person shall acquire, directly

of indirectly, the whole or any part of the.stock or other share capital, nor shall any person
acquire the whole or any part of the assets of one or more persons engaged in commerce or in
any activity affecting commerce, where in any line of commerce in any activily attecting
commerce in the country or in any part of the country, the effect of acquisition of such assets,
or of the use of such stock by the voting or granting or proxies or otherwise, may be
substantially to lessen competition, or tend to create a monopoly. This Section shall not apply
to persons purchasing such stock solely for investment and not using the same voting of

otherwise to bring about, or in attempting to bring about, the substantial lessening


competition. Not shall anything contained in the Section prevent a corporation engaged in
commerce or i any activity affecting commerce from causing the formation of subsidiary
corporations for the actual carrying on their immediate iawfu! business, or the natural and
legitimate branches or extension thereof, or from owning and holding all or part of the stock
of such subsidiary corporations, when the effect of such formation is aot to substantially

lessen competition.

‘Nothing contained in this Section shall be held to affect impair any right heretofore legally
acquired: Provided, That nothing this Section 8 shall held or construed to authorize or make
anything heretofore prohibited or made illegal by any anti-trust law of the Philippines,
particularly Article 186 of the Revised Penal Code of the Philippines, nor exempt any person

from the penal provisions thereof or the civil remedies provided therefore, if any

Section 9. Prohibited Bourd Memberships in Two or More Corporations. - No person shall
be a director in any two or more corporations engaged in whole of in part in commerce in the
Philippines

t the same time, other than banks, banking associations, investment companies,
and trust companies, if such corporations are or shall have been therefore, by virtue of their
business and location of operation, competitors, so that the elimination of competition by
agreement between them would constitule a violation of any provisions of this Act or any
anti-trust law of the Philippines, particulasly Article 186 of the Revised Penal Code of the
Philippines

Section 10, Exemption of Labor, Agricultural or Horticultural Organizations. — The labor
of a human being is not a commodity or Article of commerce. Nothing contained in this Act,
therefore, shall be construed to forbid the existence and operation of any, labor, agricultural or
horticultural organizations, instituted for purposes of mutual help, and not having capital
stock or conducted for profit, or to forbid restrain individual members of such organizations
from lawfully carrying out the legitimate objects thereof, nor sball such organizations, or the
members thereof, be held or construed to be illegal combinations or conspiracies in restraunt
of trade, under this Act,

Section 11. Penalties for Violations of Section 3 and Section 4.- Any person that shal! be
found to bave violated Section 3 or Section 4 of this Act shatl, for each and every such
violation, be punished by a fine not exceeding ten million pesos (P10,000,000.00) if @
corporation or association, or, one million pesos (P1,000,000,00) if a natural person or by


imprisonment not exceeding five (5) years, or both fine and imprisonment, in the discretion of
the court

Section 12, Penalties for Vielations for Section 5, 6, 7, 8 and/or 9.- Any person that shall
be bound to have violated Sections $,6,7,8 or 9 or any combination of such sections of this
Act shall, for each and every violation, be punished by a fine not excecding five million pesos
(P 5,000,000.00}, or by imprisonment not exceeding two and one half (2 14) years, or both

fine and imprisonment in the discretion of the court

Section 13. Jmposition of a Higher Penalty. - If the same Act or Acts are chargeable and
punishable under Article 186 the Revised Penal Code and under the provisions of this Act, the
penalties imposed under the provisions of the Revised Penal Code or under the provisions of
this Act, whichever is the heavier, shall imposed.

Section 14. Exclusion of Civil Action from Criminal Action. - The institution of a criminal
action under this Act against a defendant shall not be deemed to include any claim for
damages in favor of any person that may have suffered any monetary injury because of any
violation of this Act

Section 1§. Civil Action of Private Parties for Monetary Injury.  \n addition to the
penalties provided in Sectioas 11 and 12 of this Act, any person that shall be injured in his
business or property and thereby suffers monetary injury by reason of anything forbidden
under Sections 3, 4, 5,6, 7, 8 or 9 of this Act may institute a separate and independent civil
action, irrespective of the amount involved in the monelay injury by him or by it sustained,

and the cost of suit, including a reasonable attorney's fee.

“The complaint for the civil action may be filed or instituted in the Regional Trial Court where
the defendant or any of the defendants, if more than one, resides or is found or huss an ayent,
or in the Regional Trial Court where the plaintiff resides. Any complaint for civil action that
may be filed or instituted against a defendant to recover monetary injury suffered as a
consequence of'a violation of this Act shall be exempted ftom payment of any filing fee

Section 17. Determination of Monetary Relief to be Awarded in A suit of the Republic of
the Philippines, - _\n the event of such a civil action brought by the Secretary of Justice


becoming successful, the Regional Trial Court having jurisdiction over the casc shall exclude
from the amount of the monetary relief awarded in such action, the amount: (1) which
duplicates amounts of monetary relief that have been awarded for the same injury, or (2)
which is properly allocable (A) to natural persons who have excluded their claims from the
civil action instituted by the Secretary of Justice in the name of the Republic of the
Philippines, and (B) to any business entity.

Section 18, Reyuirement of Notice hy Publication in a Suit of the Republic of the
Philippines, - (n any civil action brought by the Secretary of Justice under this Act in the
name of the Republic of the Philippines, as parens patriae, the Secretary if Justice shall, at
times and is such manner, and with such content as the Regional Trial Court having
juvisdiction may direct, cause notice thereof to be given by publication However, if such
Regul (uit Cour tings hat nouce given solely by publication would deny due process uf
law to any person or persons, that court may direct further notice to such such persons

according to the circumstances of the case.

Seetion 19, Exclusion from Suit of the Republic of the Philippines. - Any person on whose
behalf s civil action has been brought by the Secretary of Justice under this Act in the name of
the Republic of the Philippines, as parens patviae, may elect to exclude from adjudication the
portion of the claim of the Republic of the Philippines for monetary relief attributable (0 bim
by filing notice of such election with the Regional Trial Court having jurisdiction over the
civil action within such time as specified in the notice given pursuant to the immediately

preceding Section 16 hereof,

Section 20, Effeet of Final Judgment in a Suit of the Republic of the Philippines. - The
final judgment in an action brought by the Secretary of Justice under this Act in the name of
the Republic of the Philippines, as paren patriae, shalt be res judicafar as to claim by any
person on behalf of whom such action was brought and who fails to give the notice of election
under Section 17 hereof within the period directed and specified by the Regional Trail Court
having jurisdiction of the case in accordance with Section 16 of this Act,

Seciion 21. Swit af the Republic of the Philippines to Recaver its Qwn Damages. -
Whenever the Republic of the Philippines is hereafter injured in its business or property by
reason of anything forbidden or rendered unlawful in this Act, it may sue thereon in the
Regional Trial Court in which the defendant or any of the defendants, if there are more than


one defendant resides or is found or has an agent, without respect to the amount in
controversy and shall recaver actual damages by it sustained and the cost of suit.

Section 22. Approval of the Court Required ty Dismiss or Compromise a Civil Action, -
Any

1 action filed under this Act shall not be dismissed or compromised without the
approval of the court having jurisdiction of the case, and notice of any proposed dismissal or
compromise shall be given to the public and to the parties in such manner as the court directs

Section 23. Attorney's Fee for the Prevailing Defendants, - In any civi) action filed against
a defendant under this Act, the court having jurisdiction of the case may award a reasonable
atlomey’s fee in favor of a prevailing defendant upon a finding that the Secretary of Justice or
the plaintiff has acted in bad faith, vexatiously, wantonly, or for oppressive reasons

Sectinn 24, Use of Statistical or Sampling Methods to Prove and Assess Damages. - In any
civil action under this Act which there has been a determination that a defendant agreed to fix
paces 1 vielutivy ol the pruvistuns of this Act, damages may be pvoved and assessed iv he
aggregate by statistical or sampling methods, by the computation of illegal overcharges, or by
such other reasonable system of estimating aggregate damages as the court having jurisdiction
of the case in its discretion may permut without necessarily proving the individual claim of or

the amount of damage to, persons on whose behalf the suit was brought

Section 25. Distribution of Monetary Relief Recovered in Suit of the Republic of the
Philippines. - The monetary relief in a civil action filed by the Secretary of Justice in the
name of the Republic of the Philippines, as parens patriae, in accordance with the provisions
of Section 16 hereof shail (1) be distributed in such manner as the Regional Trial Court
having jurisdiction of the case in its discretion may authorize; or (2) he deemed a civil penalty
by the Regional Trial Court and deposited with the Nationa! Treasury as part of the general
fund of the government, subject in either case to the requirement that any distribution
procedure adopted by the Regional Trial Court shall afford each person having an interest i
the monetary relief a reasonable opportunity to secure his appropsiate portion of the net

monetary relief ubtained

Section 26. Evidential Effect of « Final Judgment Rendered in a Criminal Action Against
a Defendant. - Any final judgment or decree heretofore or hereafter rendered in any criminal


action brought by or on behalf of the People of the Philippines as well as any final judgment

oF decree heretofore or hereafter rendered in any civil action brought by or on behalf of the
Republic uf the Philippines under this Act to the effect that a defendant has violated any or all
of the provisions of this Act shall be prima facie evidence against such defendant in any civil
action brought by any other party against such defendant under this Act as to all matters
respecting which said judement or decree would be an estoppel as between the parties thereto
Provided, ‘That this Section shall not apply to consent judgment or decree, as hereinafter

provided in Section 27 hereof, entered before any testimony has been taken

Section 27. Hrapusal for ¢ Consent Judgment, At any time in the course uf a civil action
brought by or on behalt of the Republic of the Philippines under this Act, the Republic of the
Philippines through the Secretary of Justice, may propose in a proper pleading to the
defendant or defendants a consent judgment by the latter based on the facts alleged by the
parties in their respective pleadings

Any such proposal for a consent judgment for entry in such civil action shall be filed with the
Regional Trial Court having jurisdiction of the case. A summary of the terms of the proposal
for the consent judgment with a competitive impact statement which shall recite (1) the
nature and purpose of the proceeding; (2) a description of the practices or events giving ise
to the alleged violation of this Act, (3) an explanation of the proposal for a consent judgment,
including an explanation of any unusual circumstances giving rise to such proposal or any
provision contained therein, relief to be obtained thereby, and the anticipated effects on
competition of such relief, (4) the remedies avaifable to potentiat private plantitt's damaged
by the violation ia the event that such proposal for the consent judgment entered in such
proceeding; (5) a description of the alternatives to guch proposal actually considered by the
Republic of the Fhilippines; and (7) a list of the materials and documents which the Republic
of the Philippines shall make available for purposes of meaningful public comment, and the
place where such materials and documents are available for public inspection, shall be
published at least sixty (60) days prior to the effective date of such consent judgment far
seven (7) days over a period of three (3) weeks in at least two (2) newspapers of general

circulation.

Copies of the proposal for a consem judgment or any other materials and documents which
the Republic of the Philippines considered determinative in formulating its proposal for a
consent judgment shall be made available to the public at the Regional Trial Court having

jurisdiction of the case.


Section 28. Public Comments Relating to the Proposal for a Consent Judgment. - During
the sixty (60) day period mentioned in Section 27 hereof, and such additional time as the
Republic of the Philippines may request and the Regional Trial Court may grant, the Republic
of the Philippines shall receive and consider any written comments relating to the proposal of
the consent judgment filed with the Regional Trial Court having jurisdiction of the case in
accordance with Section 27 of this Act. At the close of the perind during which such
comments may be received, the Republic of the Philippines shall file with the Regional Trial
Court having jurisdiction of the case, not later than (30) days from the date the last comment
was filed with the Regional Trial Court, a response to such comments

Se

n 29. Duty of the Regional Trial Court Before Entering Any Consent Judgment -
Before entering any consent judgment proposed by the Republic of the Philippines under
Section 27 of this Act, the Regional Trial Coust having jurisdiction of the case shall determine
that the entry of such judgment is in the public interest

For purposes of determining that the entry of such judgment is in the public interest, the
Regional Trial Court may consider: (1) the competitive impact of such judgment, including

termination of alleged violations, provisions, provisions for enforcement and modification,
duration of relief sought, anticipated effects of alternative remedies actually considered, and
any other considerations bearing upon the adequacy of such judgment; and (2) the impact of
entry of such judgment upon the public generally and individuals alleging specific injury from
the violations set forth in the complaint, including consideration of the public benefit, if any.

to be derived trom the determination of the issues at the tri

Section 30. Powers of the Regional Trial Court in Making the Determinution under
Section 29, - In making its determination under Section 29 of this Act, the Regivnal Triat
Court may, (10 take the testimony of government officials or experts or such expert
witnesses, as the Regional Trial Court may deem appropriate, (2) appoint such outside
consultants or experts witnesses as the Regional Trial Court may deem appropriate: (3)
request and obtain the views, evaluations, or advice of any individual, group, or agency of the
government with respect to any aspects of the proposed consent judgment or the effect of such
consent judgment, in such manner as the Regional Trial Court having jurisdiction of the case
deems appropriate, (4) authorize full or limited participation in the civil proceedings before
the Regional Trial Court having jurisdiction of the case by interested persons or agenci
the yoveroment, including appearance amicus curiae, intervention as a party pursuant to the

of

provisions of the Rules of Court, examination of witnesses or documentary materials, o


participation in any other manner and extent which serves the public interest as the Regional
Trial Court having jurisdiction of the case may deem appropriate; (5) review any comments

including any objections filed with the Republic of the Philippines concerning the proposed
Consent judgment and the responses of the Republic of the Philippines to such comments and
objections, in accordance with the provisions if Section 28 of this Act, and (6) take such

other action in the public interest as the Regional Trial Court may deem appropriate

fications of the Defendants. - Not later than fifteen (15) days following
the date of the filing of any proposal for a consent judgment under Section 27 of this Act,
each defendant shall file with the Regional Trial Court having jurisdiction on the case a
description of any und all written or oral communications by or on behalf of such defendants,
including any and all written or oral communications on behalf of such defendants, o other
person, with any officer or employee of the Republic of the Philippines or relevant (o such
proposal, except that any such communications made by counsel of record with the Secretary
of Justice or the employees of the Department of Justice shall be excluded from the
requirements of this Section Prior to the entry of any consent judgment pursuant to this Act,
each defendant shall certify under oath to the Regional Trial Court having jurisdiction of the
case that the requirements of this Section have been complied with and that such filing is a
ue and complete desctiptivn of such communications known to the defendant ut which the
defendant reasonable should have known,

Section 32. Hvidential Value of Proceedings in a Proposal for a Consent Judgment. -
Proceedings before the Regional Trial Court having jurisdiction of the case under Section 29
and Section 30 of this Act, shall oot be admissible against any defendants in any action os
proceedings brought by any other party against such defendant nor constitute a basis for the
introduction of the consent judgment as u prima facie evidence against such defendants in any

such action or proceeding,

Section 33. Statute of Limitations. - Any civil or criminal action to enforce any cause of
action arising trom a violation of any provision of this Act shall be forever barted unless
commenced within five (5) years after the cause of action accrued, Whenever any civil or
criminal proceeding is instituted by the Republic of the Philippines in cave of a civil action or
by the People of the Philippines in case of « criminal action to prevent, restrain, or punish any
violation of any provision of this Act, the running of the statute of limitation provided in the
immediately preceding sentence in respect of every private or sovereign right of action arising
onder this Act and based in whole or in part on any matter complained of in said proceeding

shall be suspended during the pendency thereof and for one year thereafter.


Section 34. Separubifity Clause. - Wany clause, sentence, section or part of this Act shal] be
adjudged by a court of competent jurisdiction to be invalid, such judgment shall not affect,
impair or invalidate the remainder of this Act, but shall be confined in its operation to the

clause, sentence, paragraph, section, or part thereof directly involved in the controversy

Section 35. Kepeating Clause. - Ali provisions of law, orders, decrees, executive orders.

including rules and regulations or parts thereof which are contrary to or inconsistent with the

rnvisinns Af ibis Act are heeshr: panacted an

Section 36. Effectivity Clause. - This Act shall take effect fifteen (15) days following its
Publication im the Official Gazette or at least two (2) national newspapers of general

circulation

Approwd,


FIETEENTH CONGRESS )
OF THE REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES

913

Honsé Bill No

Introduced by Representative Susan A. Yap

EXPLANATORY NOTE,

In economic paciance, efficiency 1s best achieved if there is competition as the tension
of the differenr interests of the agents will ultimately result in an equilibrimm, provided that
they are in the same level playing feld. In a competitive regime, there are incentives to
improve and perceived fairness because in the end, the chuice will be determined by welfate-
maximizing consumers.

Such beliefs are not new to the Philippines; Section 19, Article NIT of the 1987
Philippine Constitution explicidy probibus certain ant-competitive policies such as
sronopolies (unless public interest so requires) and restraint of trade. Article 186 of the
Revised Penal Code, meanwhile, provides for che sanctions in che for those wha engage in
such practices while the Civil Code allows the collection of damages arising from unfair
compeution, Numerous special laws and statutes were likewise enacted to address this
problem such as the Corporation Cade of the Philippines (BP 68), The Revised Securiues Act
(BP 178), the Price Act (RA 7581), the Consumer Act of the Philippines (RA 7394), the
Intellectual Property Cade of the Philippines (RA 8293), the Downstream Oil Deregulation
suc GLA 6479), the Antidumping Sct (RA 8752) and the Elecutic Power Industry Reform Act
(RA 9136), among others. Despite these, however, enforcement remains lacking because of
Iindzances such as the Jack of transparency. constraints of regulatory bodies, and # unified
legal framework for the enforcement of such laws.

his bill, thus, secks to pu im place « comprehensive competition law that not only
provides the sanctions to che acts thar constitute unfair trade practices, but also addresses the
stumbling blocks inkereat in implementing a competitive regime. Applicable to all areas of
trade, industry aad commercial economic activity, the proposed measure specifics cartels,
monopolies and abuse of power by vittue of the their dominance in the market as prohibited
acts that shall be accorded penalties of a fine of aot less One million pesos (Php1,000,900.00)
aux not exceeding Ten million pesos (Pap10,000,000.00) if a natural person; by a fine of aot
less than ‘Ten million pesos (Php10,000,000.00) but nor exceeding One hundred million pesos
{Pp 100,000,000.00) if 2 Gem, and by imprisonment mor exceeding ten (10)) years, or both, at
the discretion of the court.

Further, it mandates the conduct of a preliminary inquiry by the Deparment of [ustice,
in coordination with the Department of rade and Industry and or any other appropriate
government agencies, notwithstandiog the incumbent powers of the different regulatory
agencies. Any person or firm, which cooperates and furnishes any information, document or
data that constitutes as material evidence to the DOJ before or during the preliminary inquiry
shall be immune from any suit ot change including (tom affected partics and third patties.

The Philippine economy is without a doubt characterized by a structure that lends a
few businessmen and their families substantial power in contcolling the market. This makes
entry mote difficult, pressing down the development of micro, small and medium enterprises
chat wish to participate in the field. “Iherefore, an effective competition policy will ensure a



regime that will spell efficiency and help the country move to a highcr growth path, ultimately
redounding to yencral public welfare - for businesses and consumers alike

In view of the foregoing, the immediate passage of this hill is carnestly sought

Reptesentative, 2


FIFTEENTH CONGRESS )
Ol THE REPUBLIC OF THE: PHILIPPINES )

Uae Regutar Session )

HOUSE OF REPRESENTATIVES

Howse MitlNo_ 913

lortoduced by Representative Susan A. Yap

AN ACT
PENALIZING UNFAIR TRADE AND ANTI-COMPEVITIVE PRACTICES IN
RESTRAINT OF TRADE, UNFAIR COMPETITION, ABUSE OF DOMINANT
PONLR. STRENGTHENING THE POWERS OF REGULATORY AUTHORITIES
AND APPROPRIATING FUNDS THEREFOR, AND FOR OTHER PURPOSES

Heu enacted by the Senate and the Huase ot Representarives of cae Phiippines in Congress

CU APTER |
TITLE AND DECLARATION OF POLICY

SECTION 1. Tide, - This Ace st

cuca

alll be Kuewn and cited as the “Coepariton Jer ap

SEG. 2 Dectartion of Pass. - Varsuan ter the vonstisuiinal mandate dat che State shall
or prohibit monopolies when she pubbe unterest se rexjuires
restraunt of trade of unfair competitiva shall be allowed, rhe Site sal:

4 promote and eohanee tive and full cumperiton au rrade, sndusery and all commercial
sconuinic acavines;

bi prevent the concentration of econcmuc power in a few persons whu threaten ro comtal
the production, wade, or industry, sntle compention, distort, manupulate or constrict che discipline of
fee markets, oF tamper with the free play of the meatkec forces aust evumeually destroy free and upen
markets; and,

© penalize all fotms of vafau wade, ano-competitive conduct and combinations in restraunt
steak with the objective of protecting aad aul anciny consumer welfare,

fed that au combinations in

CHAPTTR 2
SCOPE AND APPLICATION, DLEINIION OI TERMS.

SIA, 3. Scape and Apphvaion. - Vhs Act shall be enforceable wubin the temnroty of the
Republic of the Philippines and shall apply to alll areas of trade, industey and conmmerctal eeunomic
avcvity Tr shall likewise be applicable to internauemal ude havinyy substantial effects in the Republic
nt the Philippines including those that resulr trea acts June cutssle thy Republic ul the Phulyppuies

mts slefined hereunder and all chete comuezcial
Memos avhons oF trumactions involving oaks series or intellectual property, and, Qo) a
toil persuis who, acting in thus capactn as ywaer, Hunager ur emploree of w fim, shall
auiborice. cumige OF aid in the commission of restuctive practices prohibited ynder this Act

Who Aer shalk apply we salt



1
2
3
4
3
6
7
8
9
0

SEC. 4. Definition of Terms. -As used in this Act, the following terms shall be defined as:

{@) Cartel shall mean « combination of firms, providing goods in xelevant markets, acting ot
ioined together to obtain a shared monopoly to control production, sale and price, of to obtain
con] in any particular indusuy or commodity, or a group of firms that agree to restrict ttade to
their murual benefit, which may or may not be uf an international scale.

1 shall also refer to firms or secon of firms having common interest designed to prevent
extreme of unfair competition and allocate markets, and t0 promote the exchange of knowledge
resulting from scientific and technical research, exchange of patent rights and standardizason of
products;

() Competition shall mean the process by which cconoiic agents, acting independently in a
Market, limir each other's ability to control the prevailing conditions mm the market;

{6} Control refer to at least twenty percent (2) ownership. directly or indirectly, of a firm
of a group of firms by another fin,

(2) Vm: shall include any person, parmership, combinativa or association in any form,
engaged directly or indirectly in any economic activity: Provided, That, two firms, oue of which is
controlled by the other, shall be treated as one firm: Provided, further, That two ox more firms that are
controlled by 4 single firm shall be treated as one firm;

(©) Goods shall inchade all expes oF goods and services;

(8 Market shall refer to 2 place o¢ vemue for commercial activity, which may extend beyond
the borders of the Republic of the Philippines, where articles are bought ur sold. It shall tlso refer (o
the geographical or economic extent of commercial demand;

@ Monopoly shall meam a privilege of undue advantage of one of more fins, consisting in
the exclusive tight to catty on a particular business or trade, and/or manufacture 2 particular
product, article or object of trade, commerce or industry. It is a fortn of market structure in which
‘ne of only a few firms dotinate the total sales of a product or service;

(h) Monopoly Power shall refer to a situation where a firm, either by itself ur acting in
collusion with other firms, is in a position wo control a celevant market for the sale of a patticular
ood or service by xing its prices, excluding competitor figm, or controlling the market in & specific
geographical area; and,

@ Relevant Market shall eefer to che line of commerce in which competinon has been
restrained. {t shall also refer to the geographic area involved, including all reasonably substitutable
gods, and all nearby competitors, to which consumers could tum if the restraint ot abuse resules in
the significant increase in prices.

CHAPTER 3
PROHIBITED ACTS

SEC, 5, Cartels. Tt shall be unlawful for firms providing goods in relevant markets co join
together to monopolize, ot to control production in a particular industry ot commodity, the sale and
price of such good, and to agree to restrict trade for their mutual benefit, which may or may not be
oa an international scale. ‘/his shall also include an association by agreement of firms or sections of
firms having common intecests designed to promote the interchange of knowledge resulting from
scienoific and technical reseurches, exchange of patent riphts and standardization of products.

Restrictive agreements sesulting from cartel-like behavior of firms, in any form, are hereby
per se deemed illegal. These shall include, but not limited to, the following:

@) Agreements to fix selling price of goods or orhet terms of sale;

(©) Agteements to limit supply or output,

(©) Agreements to divide the matket, whether by volume of sales or purchase ar by ternitory,
by type of goods sold, by customers or sellers, or by any other means,

(@) Agteements exclude or limit dealings with particular suppliers or sellers from supplying,
or selling goods, or customers from acquiring or buying goods; and,

(©) Agreements to fix setting ptice at auchons of io any other form of bidding, There shall be
a pruma facie case for the existence of a cartel if and when the Department of Trade and Industry
(DTI or concemed regulatory agency finds chat two or more persons or firms competing for the


CeNauewie

samme relevant market perform uniform or complementary acts among themselves which tend to
bring about atificill and wurcasomable wnerease in the price ot any goods or when’ they
Simaltancously and unreasonably increase the peices of their competing yoods thereby lessening
competition among thetnselves.

SEC. 6. Monopolies, - It shall be unlawful for any firm to willfully monopolize, or kn
attempt to monopolize, the ade of goods ar any part of the trade or commerce within the Republic
of the Phibppines or with any foreygn county of territory. As prohibited in dus Act, the essential
elements of the crime of monopolization are the possession of monopoly power and xe willful
aeypisition, maintenance or abuse to exclude comperitors from any part of ade, commerce or
industry as distinguished ‘from natural growth or development of a firm 2s a consequence of a
superior product, business acumen or historic accideat: Promided, That, a firm that has at least fifty
percent (50%) of the televact marker as found aud certified by the Department of Trade and
Jndustry or the Concerned regulatory agency shall be deemed a monopoly or in dominant position

SEC. 7. Monopoly Power or Abuse of Marker Poser by One in Dominant Position — it shall be
unlawful for one or move firms with market power within relevant matkets to abuse their monopoly
power or dominant position, by engaying an uniair methods of competition, or engaging in unfair oF
decepnive trade practices, or entering into agreements, combmations m the form of trust or
otherwise, of conspitacy, with the purpose and effect to prevent, restrict, or distort competition.
Abusive agreements such as, but not limted to, any of the following, shall be deemed to fall under
the crime of abuse of monopoly power ot marker power by one in dominunt posiiua:

A. Price Fixing - Any agreement to fix the selling price of yuous or other terms of sale, with
the purpose and effect of creating a monopoly or cartel, of lessening competition

B. Bid Rigging - Any agreement to fix prive at auctions or in any other form of bidding, with
the purpose and effect of creating » monopoly or cattel, or lessening competition. In determining
‘whether there is price fixing or bid rigging, che following circumstances may be considered:

(1) generally, any considered evidence that two sellers of similar goods have agreed tw set the
pace of their goods, to sell only a certain ammount of their goods, or t0 sell only to a lunited number
nf busers of consumers;

© @) a drastic change in prices of goods and services involving more than one seller of simular
goods of different brands, particuladly if the changes 1n prices take place in equal amount and about
the same time;

(3) a seller refusing to sell based om an agreement with a competitor,

(A) the same firm bas repeatedly been the low bidder who has been awarded contracts fora
certain service ot a particular bidder seems to win bids on a fixed-rotation;

() there is an unusual and unexplainable difference between the winning bid and all other
bids; and,

(6) the same bidder bids substanually higher on some bids than on others, and there 1s 00
logical cost reason to explaia the difference.

C, Limitation and Control of Markets -Amy agreement co limit or control production,
markets, technical development, of investment with tike purpose and effect of ereating a monopoly
ot cartel, of lessening competition.

D. Market Allocation - Any agreement to divide the nwrker, whether by volume of sales or
purchase of by tertitory, by type of goods sold, br customers or sellers or by any other means, with
the purpose and effect of creating a monopoly or cartel, or lessening competition.

E. Arrangements to Share Markets or Sources of Supply - Any agreement to share markets
ot suurces of supply of raw materials, with the purpose and effect of creating a monopoly or cartel,
or lessening competition.

F. Price Discrimination . Any agreement prescerbing or charging, ditectly oF indirectly,
discriminatory pricing rerms or conditions in the supply or purchase of goods of like grade and
quality with the purpose and effect of creaung a monopuly or cartel, oF substantially lessening
competition: Provided, That nothing contained herein shall be consitued to prohibit permissible price
differentials unless the same shall have the effect of preventing, cestricling or distorting competition


EUGIOS cman

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Prerded fbe; That for the purpose of dus sectim, che following shall be considered permssible
price differentials:

(D Socialized Pacing - Socialized pricing for the less fortunate sector of the economy;

2) Volume Discounts - Price. differentals which reflect an allowance for differenees in the
cost of manufacture, sale, or delivery resulting from differiag methods or quantities in which the
goods are sold or delivered to the purchasers;

(S) Competitive Pricing - A price differential or other tems of sale m response to the
competitive price of payments, services ot facilities furnished by a competitor,

() Bona fide Selection of Customers - The selection of customers on bons fide tansacion;

@) Price Differentials Due to Changing Market Conditions or Markctability of Goods - Pace
changes from time to time in response to changmg conditions affecting the market or the
murketabiliy of the goods concerned such as, but out linited to, netual or invminent detedoranon of
Peashable goods, obsolescence uf seawunal gos, distress sides under court process, or sale on
good faith in discomtinusnce of business.

G. Baclusivity Arrangement - Any agreement imposing zestrictions on the lease of comeract
for sale or made of goods conceming where, to whom, or in what forms goods may be sold or
traded, such as, but not limited to fixing prices, oF giving preferential discounts, or rebate upon such
Price, oF imposing conditions not to deal with competing firms, where the purpose of such
agteement is to lessen competition: Pravided, hat nothing contained herein shall prohibit or tender
unlawful permissible franchising, licensing or exclusive distributorship agreements

H. Tie-In Aerungements - Any agreement malang the supply of pacticulat goods dependent
‘poo the purchase or lease of other goods ftom the supplier or his consignee, where the purpose
and effect of such sale of lease of such condition is to substantially lessen competition or to cteste 2
monopoly or cartel

1 Borcote - Any concerted refusal to sell or conspiracy not to sell ur to stop domg business
on the part of the suppliers of any goods, unless for a legitimate purpose, such as but aot limited to.

(1) Defaulting Borrowers - refusal by one or more credit institutions to extend loans 10
defaulting debtors;

@) Defaulting Buyers - refusal by one or more manufacruters or sellers to sell on credit co
defauleing customers; and,

3) Violators of Intellectual Property Rights -tefusal by manufacturers ot sellers to have any
commercial dealings with one or more firms who violate the intellectual property tights of the
owners of patents, copyrights, trademarks and other mtellectual property

CHAPTER 4
PENALTIES

SEC. 8. Penalties. - Without preyadice to the violation of other laws, any firm that shall be
found to have violated Sections 5, 6 and 7 of this Act, or any combination thereof, shall, for each
and every violation, be punished by a fine of not less One million pesos (Php1,000,000.00) and nut
exceeding Ten million pesos Phpi0,000,000.00) if a natural person; by a fine of not less than Ten
milion pesos (Php10,000,000.00) bur aot exceeding One hundred million pesos
(Php 100,000,000.00) if a firm, and by imprisonment not exceeding ten (10) years, or both, at the
discrenon of the court

CHAPTER 5
ENFORCEMENT,

SEC. 9. Prekiminury Inquiry - The Deparment of Justice (DOJ), in coordination with the
Department of Trade and Industry (DTD, other regulatory and/or appropriate goverment agency,
shall mote propia, upon the Gling of « verified complaint by an interested party or upon referral by the
concerned regulatory agency, initiate a preliminary inquuy for the enforcement of this Act based on
reasonable grounds



SEC. 10. Powers of Comerned Regulatory lgenacs. - Notwithstanding the provisions of the
preceding section, the exercise of regulatury powers by diflercat government agencies over an
industry oF a sub-sector of an industry shall be cumulative and sha nut be construed in any way as
derogating from the power and authority of the concerned agency. ‘The government agencies shall
cooperate and coordinate with one another in the exercise of their powers in order to prevent
‘overlap. lo share confidential informanon, or for orher effective memures.

SEC. 11. Power to Investigate, - The DOJ may, through its duly authorized inquiring otlicer, by
asriven notice, requite « firm or natural person in produce » specitied document, or to provide
specilied information which the 190) considers as relevant ity investigation. The inquizing officer,
upon the authority granted by the Secretary of Jusnce, shall engaye the services of consultants of
experts to aid in the inquiry. He shall also make use of any avuilable or analogous means under
existing Jaws and procedures to determine if any provision of this Act has been violated, For this
purpose, he shall have the power to punish for contempt any firm which does not comply with the
notice or order for document, information or such other relevunt matters and w impose a fine not
exceeding One hundted thousand pesos Phplt#,0000) for aun-compliance with each noace or
order

SEC. 12, Seffinerinination and Privileged Communication Eixulisin, - Pursuant c the preceding
section, a person subject of any investigation by the DOJ shall produce the specified document or
information when so required by written nouce: Promded, That no person shall be excused from
disclosing any document or infortation to the inquising officer on the ground that che disclosure of
the information or document may be incriminarion: Provided, Hower, ‘That such document or
infggmgtion produced by the person subject of investigation shall nut be admissible as evidence
y ‘hum in criminal proceedings: Pronided, finaly, ‘Thar such document or informaton shall he
adiissible in evidence in civil proceedings incluling those arising from or in connection t the
implementation of this Act,

Nothing, in this section shall compel the disclosure of puvileged communication: Provided,
That the person who refuses to disclose the informaton or produce the document of other material
required by the inqviting officer in relation wo the preliminary inquiy being conducted shall
nevertheless be obliged to give the name aud address of the firm to whom, or by whom, or on
whose behalf, such privileged communication was made.

SEC. 13. Inmanity from Suit. - Any person ot firm which cooperates or furnishes any
mformauon, document or data to the DO] before or during the conduct of the preliminary inquiry
thar constirutes material evidence as determined by the (Of onder this ec shall be immune from
y Suir of charge inchiding from affected puuties and third parties: Provide, farther, That any person
or firm which cooperates of furnishes information, document or dita to the DOJ in connection to
an investigation being conducted shall aoc be subjected to any form of reprisal or discrimination:
Proided, jurtbermore, That such reprisal or discrimination shall be consideted a violation of this Act
and subjected to the penalties provided for under Section 8: Prowiled, jinally, That, notwithstanding
the provisions of Section 17 hercof, the frm which cooperates with the DOJ in its investigation
shall be entitled co a reward equivalent to twenty percent (20%) of any monies paid by the firm
subject of the inquiry, or the monetary relief recovered from court action

SHC. 14. Termination of Preliminary Ingwity. ‘Vhe Department of Justice, after cousidering the
starements made, of documents or articles produced, «n the course of an inquiry conducted by it,
shall terminate the preliminary inquiry by issuing a resolution ordeting its closure if ne violanon oF
infringement of. this Act is found; or by issuing a mol contender resolution; or to, singly or
cumulatively, (a) endorse the findings (a the regulatory agency for the imposition of adininistrative
fines; (b) institute a civil case for damages; or {¢) file a criminal case for violation of this Act or ather
relevant laws: Provided. That, for purposes of this Act, the preliminary inquiry referred to in Section 9


wu eee

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Of dts Act shall fll the requirements wf 4 preliminary investigation: Promded, ferber ‘Vhat the
cesvluaon shall not be subjected to any petition for ceview.

SEC. 15, Nolo Contenders Resolution. - Nay firm under inquiry under the provisions of this Act
may subruit co a solo contendere xesolution at any time before the temnination of the preliminary
inquiry by: a) the payment of an amount within the range of peaualtics provided for under Section 8:
&) by entering into an undertaking to effectwely stop and rectify dhe acts complained agamnst, make
resurution to the affected parties, whether or nut the parties are complainants or witnesses: and, ¢)
by submitting regular compliance reports us may be directed: Prinided, That, five percent (52) of the
amounts paid under this section shall equitably accrue to the government agencies invulved in the
unquiry: Provided. firther, That a nalo contendere resolution shall not Lar any inquiry for the same or
similar acts if continued ot repeated,

SEC. 16. Count Action. - In addition to any enmminal action, che DO, when instiruning the civil
action, shall bring, it in the name of the Republic of the Philippines, as fuureas putnue, on behalf of
persons residing in the Philippines, to secure treble damages for any monetary injury sustained by
such narural persons by ceason of any violauon of this Act plus the cost of suit and a reasonable
atromey’s fee.

SRC. 17. Biff of Final Judgment. The final judgment in an action brought under the
preceding vection shall be res judivake a8 to any claim by any persou on whose behalt such action was
brought: Pronded, ‘Vhat such person notifies the court having jurisdiction of the case within che
penod yivea by the court: Prorded, farther, That such period shall not be less than ninety (90) days.

SEC, 18. Disnbasion of Monciary Relief Recovered. - The monetary relief recovered ia a civil
action under Section 15 of this Act shall be distributed in the following mannes: (1) as determined
and to be authorized by the Regional ‘Trial Court having jurisdiction of the case; (2) ten percent
(10s) of the total amount of monetary relief shall aceruc o the DO] te be used in the enforcement
of this Act: and, (3} the remainder of which total amount of monetary relief shall be deemed 2 civil
penalty by the Regional Trial Court and shall be deposited to dhe National ‘Treasury 2s parr of the
general fund of the government: Pruvaded, ‘Thar any distribution procedure adapted by the Regional
Trial Coust shall afford each person having an interest in the monctary elle a reasonable
opporunity to secure his approprinte portion of the net monetary rclicf abtaned.

SHC. 19. Bnidential Eft of « Final Judgment - Soy Ginal judgment rendered in any avi or
timinal action brought by the DOJ on behalf of the People of the Philippines under this Act to the
effect that a defendant has violated any of all of the provisions of this Act shall be prima fade
evidence against such defendant in any cwil action broughe by any other party against such
defendant under this Act as co all matters respectiug which said judgment would be an estoppel as
Letween the patties concerned.

'
CHAPTER &
OTHER PROVISIONS:

SEC. 20. Statute of imitations, - Any ceil or criminal action to enforce any cause of action
ansing from a violation of any provision of this .\ct shall he forever bared unless commenced
within ten yeats (10) years after the cause of action accrues. ‘The running of the statute of limitation
shall be suspended during the pendency of any proceeding.

SEC. 21. Imposition of Fines by Regulatory gency. ~ Notwithstanding any provisions of law,
regulatory agencies shall, in the conduct of their functions or duties, have the power to impose fines
in the amount not less than One hundred thousand pesos (Php!OU,000.00) and not exceeding
Fwe million pesos Php§,000,000.00), if « aatural person; and uot less than Hive million pesos



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23
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29
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32
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42
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(Php5,000,000.00) and’ not ‘exceeding Fifty million pesos (PhpS0,000,000 00) if a firm for cach
‘iolaton of or non-compliance with an order of notice of the regulatory agency.

Ten percent (10%) of such fines shall accrue to the budget of the regulatory agency for the
svchowve use in the enforcement uf this Act

SEC. 22. Prubibition on the Loswume of Femperury Restraining Orders, Prelioninary Injunctions and
Preiminary Mandatory jancions. Except for the Supreme Court, no other cout shall wen any
wear staining order, prelimunary injunction or preliminary mandatory injunction against the,
regulatory agency in the exercise of its duties or functions: Prowded, ‘That, this probibition shall apply
in all cases, disputes or controversies instruted by a privare party, inchuding, but not lisore] to, cases
Filed by regulated fins or those claiming to have dghts through such firms, Prnded. hecoae That,
this prohibition shall net apply when the matter 1s of extreme urgency involving a coustrutional
Dives Bh fiat the don-issuance of a temporary restraming order will result in grave mjuster and
treparable injury to the public: Proved, ber. That, the applicant yhall fle a bund. in 2a umercar on
be fised by the court, but in no case shail a be less than half of the imposabic fines provided for
under Section 21 of this Act: Provided. finaly That in the event thal the court finally deve that the
appheant was not entitled to the relic applied Gor, the biond shall accrue in favour of the regulatory
agency.

Any temporary restraining order, preliminary injunction ot 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 (J) year without pay in addition to othes
timing), civil or administrative penalties,

The Supreme Court may designate regional teial courts tn act as. comnussioners with the sole
funcuon of receiving facts of the case involeing the acts of the regulatory agency. The designated
Regional Teal Court shall, within thirwy (30) days frum the date of receipt of the relertal, forward ies
Sndungs of facts to the Supreine Court for approptiate acuon

SEC. 25. Intellectual Property Rights - The implementation of the provisions of this Act shall be
wnthout prejudice to the tights, Liabilities and remedies under Republic Act No. #293, otherwise
known as the Intellectual Property Code of the Philippines: Prvited. That, the exercise of mtellestaad
Property nights shall not in any way be used to justify violations of this Act

SEC. 24. Guidelines -- ‘The DOJ, in consultation with the D7, shall prepare the necessary
gerdckines for the implementation of this Act: Proaded, That, where the yuidelines would apply to an
tndusary or sub-sector of industry that is subject to the jurisdiction of a regulatory agency, the DOJ
shall, in preparing the guidelines, consule with the concerned regulatory agency: Provided, farther. That
the DO] may revise such guidelines it deems necescarv: Prisded, busever, That such revised gusdelines
shall only take effect following its publication in wo newspapers of general circulation

SEC. 25. Separatility Claws Uf any clause, sentence, section or part of this Act shall be
adiadged by # court of competent jurisdiction to be invalid, such judgment shall not affece, impate or
tvalidate the remainder of this Act, but shall be confined in its operation to the clause, sentence
pategraph, section, or part thereof dizectly snvalved m the controversy.

SEC. 26 Repeating Clansr. Al! provisions of law, arders, decrees, executive orders, includiog
tules and reyulations o¢ parts thereof, which arc contrary ro of inconsistent with the provisions of
this Act are hereby repealed or modified accordingly.

SEC. 27. Eiffectivity Clawse- This Act shall take cffect fifteeo (15) days following its
publication in the Official Gazette or in at least two (2) national newspapers of genecal
circulauon.

Approved



Republic of the Philippines
HOUSE OF REPRESENTATIV!
Quezon City

EXPLANATORY NOTE.

‘The proposed bill aims to encourage fair and free cconomic competition by
prohibiting the abusc of market-dominant positions and the excessive concentration of
economic power by regulating improper concerted acts and unfair business practices, thereby
stimulating creative business activities, protecting consumers and promoting the balanced
development of the national economy.

No less than the 1987 Constitution expressly provide that the State shall regulate or
prohibit monopolies when the public interest so require. {t also stipulates that no
combinations in restraint of trade or unfair competition shall be allowed. However, despite
the constitutional guarantees and the existence of laws that affect competition, such laws have
proven (0 be inadequate, The economy continues to be dominated by groups of businesses
with substantial market power and political influence. Also, competition in the domestic
market remains restricted in key sectors.

Doubtless, the lack of genuine competition in certain industries impairs public welfare
and undermines the countcy's credibility to provide a business climate conducive to
investment. Likewise, the absence of a comprehensive competition policy foregoes any
chance for the nation’s GDP to rise at par with our Asian counterparts, real wages to improve,
prices to drop and our country (o attain further economic growth.

The proposed bill aims tw level the playing field by strengthening the legal and
institutional framework that would combat unfair trade practices. Among the key features of
the bill are the creation of a Fair Trade Commission that shall investigate, gather evidence
and initiate prosccution of those engaged in unfair trade practices, the description of
monopoly and cartels and imposition of defined sanctions and penalties for violation of the
fair competition.

jt is our humble view that with this bill, unfair competition, monopolies and cartels
shall be properly regulated if not totally eradicated which will ultimately protect the
consumers from abuses of market powers.

With the foregoing premises, approval of this bill is highty-and earnestly sought.



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH (15) CONGRESS
First Regular Session

HOUSE BiLLNo._ L007

Introduced by HONORABLE ANTONIO C. ALVAREZ

AN ACT
PENALIZING UNFAIR TRADE AND ANTI-COMPETITIVE PRACTICES
IN RESTRAINT OF TRADE, UNFAIR COMPETITION, ABUSE OF
DOMINANT POWER, STRENGTHENING THE POWERS OF
REGULATORY AUTHORITIES, ESTABLISHING THE FAIR TRADE
COMMISSION AND APPROPRIATING FUNDS THEREFOR, AND FOR
OTHER PURPOSES

Be it enacted by the House of Representatives of the Philippines in
Congress assembled:

CHAPTER 1
TITLE AND DECLARATION OF POLICY

SECTION 1. Title. - This Act shall be known and cited as the
“Competition Act of 2010."

Sec. 2. Declaration of Policy. - Pursuant to the constitutional
mandate that the State shall regulate or prohibit monopolies when the
public interest so requires and that no combinations in restraint of trade
or unfair competition shall be allowed, the State shall:

{a} promote and enhance economic efficiency and free and full
competition in trade, industry and all commercial economic
activities;

{b) prevent the concentration of economic power in a few persons
who threaten to control the production, trade, or industry in
order to unduly stifle competition, distort, manipulate or
constrict the discipline of free markets, increase market prices
in the Philippines; and

(c) penalize all forms of unfair trade, anti-competitive conduct and
combinations in restraint of trade, with the objective of


protecting consumer welfare and advancing domestic and.
international trade and economic development.

CHAPTER 2
SCOPE AND APPLICATION, DEFINITION OF TERMS

SEC. 3. Scope and Application. - This Act shall be enforceable
within the territory of the Republic of the Philippines and shal! apply to
all areas of trade, industry and commercial economic activity. It shall
likewise be applicable to international trade having direct, substantial
and reasonably foreseeable effects in trade, industry or commerce in the
Republic of the Philippines including those that result from acts done
outside the Republic of the Philippines.

The Act shall apply to: (a} all firms as defined hereunder and all
their commercial agreements, actions or transactions involving goods,
services or intellectual property; and, (b) all natural persons who, acting
in their capacity as owner, manager or employee of a firm, shall
authorize, engage or aid in the commission of restrictive practices
prohibited under this Act.

This Act shall apply neither to the combinations or activities of
workers or employees nor to agreements or arrangements with their
employers when such combinations, activities, agreements, or
arrangements are designed solely to facilitate collective bargaining in
respect of conditions of employment.

Sec. 4, Definition of Terms. ~ As used in this Act, the following
terms shall be defined as:

(a) “Agreements” shall refer to any type or form of arrangement,
understanding, undertaking or concerted action, whether formal
or informal, written or oral;

(b) “Cartel” shall mean a combination of firms, providing goods in
relevant markets, acting or joined together to obtain a shared
monopoly to control production, sale and price, or to obtain
control in any particular industry or commodity, or a group of
firms that agree to restrict trade to their mutual benefit, which
may or may not be of an international scale. it shall also refer
to firms or section of firms having common interest designed to
promote the exchange of knowledge resulting from scientific and
technical research, exchange of patent rights and
standardization of products among themselves with the intent of
preventing, restricting or distorting competition;

(6) “Commission” shall mean the Fair Trade Commission created
under this Act;


(4) “Competition” shall mean the process by which economic
agents, acting independently in a market, limit each other's
ability to control the prevaiting conditions in the market;

(c) ‘Control” shall refer to at least twenty percent (20%) ownership,
irectly or indirectly, of a firm or a group of firms by another
firm;

(9 ‘Firms’ shall include any person, natural or juridical,
partnership, combination or association in any form, whether
incorporated or not, domestic or foreign, including those owned
or controlled by the government, engaged directly or indirectly
in any economic activity: Provided, That, two firms, one of which
is controlled by the other, shail be treated as one firm: Provided,
further, That two or more firms that are controlled by a single
firm shall be treated as one firm;

(g) “Goods” shall include all types of goods and property, tangible
and intangible, and services;

(h) “Market” shall refer to a place or venue for commercial activity,
which may extend beyond the borders of the Republic of the
Philippines, where articles are bought or sold, It shall also refer
to the geographical or economic extent of commercial demand;

() “Monopoly” shall mean a privilege or undue advantage of one or
more firms, consisting in the exclusive right to carry on a
particular business or trade, and/or manufacture a particular
product, article or object of trade, commerce or industry. It is a
form of market structure in which one or only a few firms
dominate the total sales of a product or service;

(j) “Monopoly Power” or “Dominant Position’ shalt refer to a
situation where a firm, either by itself or acting in collusion with
other firms, is in a position to control a relevant market for the
sale of a particular good or service by fixing its prices, excluding
competitor firm, or controlling the market in a specific
geographical area; and

(kj “Relevant Market” shall refer to the line of commerce in which
competition has been restrained. It shall also refer to the
geographic area involved, including all reasonably substitutable
goods, and all nearby competitors, to which consumers could
turn if the restraint or abuse results in the significant increase
in prices.

CHAPTER 3
PROHIBITED ACTS


Skc. 5. Cartelization. - it shall be unlawful for firms providing
goods in relevant markets to join together to monopolize, or to control
production in a particular industry or commodity, the sale and price of
such good, and to agree to restrict trade for their mutual benefit, which
may or may not be on an international scale. This shall also include an
association by agreement of firms or sections of firms having common
interests designed to promote the interchange of knowledge resulting
from scientific and technical researches, exchange of patent rights and
standardization of products among themselves with the intent of
preventing, restricting or distorting competition.

Restrictive agreements resulting from cartel-like behavior of firms,
in any form, are hereby per se deemed illegal. These shall include, but
not limited to, the following:

(a) Agreements to fix selling price of goods or other terms of sale;
(b) Agreements to limit supply or output;

{c) Agreements to divide the market, whether by volume of sales or
purchase or by territory, by type of goods sold, by customers or
sellers, or by any other means;

(d} Agreements to exclude or limit dealings with particular
suppliers or sellers from supplying or selling goods, or
customers from acquiring or buying goods;

(c) Agreements applying dissimilar conditions to equivalent
transactions with other parties, thereby placing them at a
competitive disadvantage; and

() Agreements making the transactions in particular goods
dependent upon other conditions which have no connection
with the subject of the transaction.

There shall be a prima facie case for the existence of a cartel if and
when the Department of Trade and Industry (DTI) or concerned
regulatory agency finds that two or more persons or firms that are
ostensibly competing for the same relevant market and actually perform
uniform or complementary acts among themselves which tend to bring
about artificial and unreasonable increase, decrease or fixing in the price
of any goods or when they simultaneously and unreasonably increase,
decrease or fix the prices of their seemingly competing goods thereby
lessening competition in the relevant market among themselves.

SEC. 6. Monopolization. — It shall be unlawful for any firm to
willfully or knowingly acquire and maintain its market power by
excluding competitors from any part of trade, industry or commerce as
distinguished from natural growth or development of a firm as a


consequence of a superior product, business acumen or historic
accident: Provided, That, a firm that has at least fifty percent (50%) of the
relevant market, or firms up to three (3) in number has at least seventy
percent (70%} of the relevant market, as found and certified by the DT! or
the concerned regulatory agency shall be deemed a monopoly or in a
dominant position.

Sec. 7. Abuse of Monopoly Power or Dominant Position. — It
shall be unlawful for one or more firms with monopoly power or in
dominant position within relevant markets to abuse their dominant
position, by engaging in unfair methods of competition, or in unfair or
deceptive trade practices, or entering into combinations in the form of
trust or otherwise, or conspiracy, with the purpose and effect to prevent,
restrict, or distort competition. Abusive agreements such as, but not
limited to, any of the following, shall be deemed to fall under the crime of
abuse of monopoly power or market power by one in dominant position:

(a) Predatory Behavior Towards Competitors - Any agreement,
including, but not limited to, selling goods at a very low price
with the intent of driving competitors out of the market, or
creating barriers to entry;

(b) Price Fixing - Any agreement among competitors to raise,
suppress, fix or otherwise maintain the price at which their
goods and services are sold such as, but not limited to,
establishing or adhering 10 price discounts, holding prices
firmly, eliminating or reducing discounts, adopting a standard
or formula for computing prices, maintaining certain price
differentials between different types, sizes or quantities of
products, adhering to a minimum fee or schedule and other
analogous schemes with the purpose and effect of creating a
monopoly or cartel or lessening competition.

{c) Bid Rigging - Any agreement to fix price at auctions or in any
other form of bidding, with the purpose and effect of creating a
monopoly or cartel, or lessening competition such as, but not
limited, to cover bidding, bid suppression, bid rotation and
market allocation and other analogous practices of bid
manipulation.

In determining whether there is price fixing or bid rigging, the
following circumstances may be considered:

(2) generally, any considered evidence that two sellers of similar
goods have agreed to set the price of their goods, to sell only
a certain amount of their goods, or to sell only to a limited
number of buyers or consumers;

(@)a drastic change in prices of goods and services involving
more than one seller of similar goods of different brands,


particularly if the changes in prices take place in equal
amount and about the same time;

@)a seller refusing to sell based on an agreement with a
competitor;

(4) the same firm has repeatedly been the low bidder who has
been awarded contracts for a certain service or a particular
bidder seems to win bids on a fixed-rotation;

(5) there is an unusual and unexplainabie difference between
the winning bid and all other bids; and

(6) the sume bidder bids substantially higher on some bids than
on others, and there is no logical cost reason to explain the
difference.

(d) Limitation and Controt of Markets — Any agreement to limit or
control production, markets, technical development, or
investment with the purpose and effect of creating a monopoly
or cartel, or lessening competition.

(e) Market Allocation — Any agreement to divide the market, whether
by volume of sales or purchase or by territory, by type of goods
sold, by customers or sellers or by any other means, with the
purpose and effect of creating a monopoly or cartel, or lessening,
competition.

() Arrangements to Share Markets or Sources of Supply - Any
agreement to share markets or sources of supply of raw
materials, with the purpose and effect of creating a monopoly or
cartel, or lessening competition.

(g) Price Discrimination - Any agreement prescribing or charging,
directly or indirectly, discriminatory pricing terms or conditions
in the supply or purchase of goods of like grade and quality with
the purpose and effect of creating a monopoly or cartel, or
substantially lessening competition: Provided, That nothing
contained herein shall be construed to prohibit permissible
price differentials unless the same shall have the effect of
preventing, restricting or distorting competition: Provided,
further, That for the purpose of this section, the following shall
be considered permissible price differentials:

(1) Socialized Pricing — Socialized pricing for the less fortunate
sector of the economy;

(2) Volume Discounts - Price differentials which reflect an
allowance for differences in the cost of manufacture, sale, or
delivery resulting from differing methods or quantities in
which the goods are sold or delivered to the purchasers;

(3) Competitive Pricing - A price differential or other terms of
sale in response to the competitive price of payments,
services or facilities furnished by a competitor;


(4) Bonafide Selection of Customers ~ The selection of customers
on bona fide transaction; and

{5) Price Differentials Due to Changing Market Conditions or
Marketability of Goods — Price changes from time to time in
response to changing conditions affecting the market or the
marketability of the goods concemed such as, but not limited
to, actual or imminent deterioration of perishable goods,
obsolescence of seasonal goods, distress sales under court
process, or sale on good faith in discontinuance of business.

(h) Exclusivity Arrangement — Any agreement imposing restrictions
on the lease or contract for sale or trade of goods concerning
where, to whom, or in what forms goods may be sold or traded,
such as, but not limited to, fixing prices, or giving preferential
discounts, or rebate upon such price, or imposing conditions
not to deal with competing firms, where the purpose of such
agreement is to lessen competition: Provided, That nothing
contained herein shall prohibit or render unlawful permissible
franchising, licensing or exclusive distributorship agreements.

(i) Tie-In Arrangements - Any agreement making the supply of
particular goods dependent upon the purchase or lease of other
goods from the supplier or his consignee, where the purpose
and effect of such sale or lease or such condition is to
substantially lessen competition or to create a monopoly or
cartel.

() Boycott — Any concerted refusal to sell or conspiracy not to sell or
to stop doing business on the part of the suppliers of any goods,
unless for a legitimate purpose, such as, but not limited to:

(1) Defaulting Borrowers — refusal by one or more credit
institutions to extend loans to defaulting debtors;

(2) Defaulting Buyers - refusal by one or more manufacturers or
seliers to sell on credit to defaulting customers; and

(3) Violators of Intellectual Property Rights - refusal by
manufacturers or sellers to have any commercial dealings
with one or more firms who violate the intellectual property
xights of the owners of patents, copyrights, trademarks and
other intellectual property.

Sc. 8. Other Unfair Competition Practices. - The following acts
shall be unlawful acts of unfair competition and shall be punishable
under this Act:

(a) Distribution of false or misleading information which is capable
of harming the business interests of another firm;

(b) Distribution of false or misleading information to consumers,
including the distribution of information lacking a reasonable



basis related to price, character, method or place of production,
properties, suitability for use, or of quality goods; and

(c) Unauthorized receipt, use, or dissemination of confidential
scientific, technical, production, business or trade information.

SEC. 9. Merger, Consolidation, or Asset Acquisition. — No firm

engaged in commerce or trade shall acquire, directly or indirectly, the
whole or any part of the stock or other share capital, or the whole or any
part of the assets, of one or more firms engaged in any line of commerce
or trade where the effect of such acquisition of such stocks, share capital,
or assets, or of the use of such stock by voting or granting of proxies or
otherwise maybe to substantially lessen competition, or tend to create a
monopoly.

{a) Permissible Stock or Asset Acquisition or Ownership. — Nothing
contained herein, however, shall be construed to prohibit:

(1) A firm from purchusing the stock or other share capital
of one or more corporations solely for investment and not
using the same by voting or otherwise to bring about, or
in attempting to bring about, the substantial lessening of
competition

(2) A corporation from causing the formation of subsidiary
corporations, or form owning and holding all or part of
the stock of such subsidiary corporations, for the actual
carrying on of their immediate lawful business, or the
natural and legitimate branches or extensions thercof;
and

(3) A firm from continuing to own and hold the stock or
other share capital or assets of another corporation
which its acquire prior to the approval of this Act.

(b) Notification Prior to Stock or Asset Acquisition. — No firm shall
acquire, directly or indirectly, the shares of stock or assets of
any other firm, if as a result of the acquisition, the acquiring
firm would own fifteen percent (15%) or more of the shares of
stock or assets of the acquired firm, unless, the acquiring and
selling firm notify, prior to the conclusion of the agreement for
such acquisition and in the prescribed form, the Commission of
such proposed acquisition. Only the acquiring firm is required
to make the notification in a tender offer. The contemplated
acquisition shail be deemed approved, unless the Commission,
within thirty (30} calendar days from receipt of the notification,
orders the acquiring firm to show cause why the proposed
acquisition shall not be declared as prohibited under this Act or
any other competition law. The show cause order shall set forth
the facts upon which it is based. The acquiring or selling firm
may contest the show cause order, in which case, the proposed


acquisition shall be considered enjoined until the Commission
shall have rendered a decision on the proposed acquisition after
due notice and hearing, in accordance with the procedure
prescribed herein for the disposition of a show cause order.

(©) Transactions Exempt from Prior Notice Requirement. — The
following classes of transactions are exempt from the prior
notice requirement under this Section:

(1) Acquisition of goods or realty transferred in the ordinary
course of business;

(2) Acquisitions of bonds, mortgages, deeds of trust, or other
obligations which are not voting securities;

(3) Acquisitions of voting securities of an issuer at least fifty
percent (50%) of the voting securities of which are owned
by the acquiring firm prior to such acquisition;

(4) Transfers to, or from, government agencies or
instrumentalities, including government-owned or
controlled corporations;

(5) Transactions exempted from the provisions of this Act
and other proper and applicable laws;

(6) Transactions which require the approval of a specialized
agency which regulates the particular industry;

(7) Acquisitions, solely for the purpose of investment, of
voting securities, if as a result of such acquisition the
securities acquired or held do not exceed ten percent
(10%) of the outstanding voting securities of the issuer,

(8) Acquisitions of voting securities pursuant to the
preemptive rights of the acquiring firm; or, if, as a result
of such acquisition, the voting securities acquired do not
increase, directly or indirectly, the acquiring firm’s per
centum share of outstanding voting securities of the
issuers; or

(9) Such other acquisitions, transfers, or transactions which
the Commission may declare as are not likely to violate
the provisions of this Act or any other proper and
applicable law.

(a) Mergers and Acquisitions in Regulated Industries. — Nothing
contained in this Section shall apply to mergers, consolidations,
and stock or asset acquisitions duly approved by the specialized
government: agency that, by law, is duly empowered to regulate
a specific sector of the economy such as, but not limited to, the
Bangko Sentral ng Pilipinas in respect of banks and other
financial institutions, the Insurance Commission in respect of
insurance companies, the National Telecommunications
Commission in respect of telecommunications companies, the
Land Transportation Franchising and Regulatory Board in
respect of public land transportation and the Civil Aeronautics


10

Board in respect of air transportation. The exemption herein
prescribed shall not apply to the approval of a merger or
consolidation by the Securities and Exchange Commission in
the exercise of its general regulatory powers over corporations.

CHAPTER 4
FINES AND PENALTIES

Sec. 10. Penalties. - Without prejudice to the violation of other
Jaws, any firm that shall be found to have violated Sections 5, 6, 7, 8 and
9 of this Act, or any combination thereof, shall, for each and every
violation, be punished by a fine of not less than Ten million pesos
{Php10,000,000.00) and not exceeding Fifty million _ pesos.
(PhpS0,000,000.00) if a natural person; by a fine of not less than Two
hundred fifty million pesos (Php250,000,000.00) but not exceeding Seven
hundred fifty million pesos (Php750,000,000.00) if a firm, and by
imprisonment not exceeding ten (10) years, or both, at the discretion of
the court. In the alternative, a fine shall be iraposed in the amount
double the gross proceeds gained by the violator or double the gross loss
suffered by the plaintiffs.

Sec. 11. Imposition of Fines by Regulatory Agency. —
Notwithstanding any provisions of law, regulatory agencies shall, in the
conduct of their functions or duties, have the power to impose fines in
the amount not jess than One hundred thousand pesos {Php 100,000.00)
and not exceeding Five million pesos (Php5,000,000.00), if a natural
person; and not less than Five million pesos (Php5,000,000.00) and not
exceeding Fifty million pesos (Php50,000,000.00) if a firm for each
violation of or non-compliance with an order or notice of the regulatory
agency. Ten percent (10%) of such fines shall accrue to the budget of the
regulatory agency for the exclusive use in the enforcement of this Act.

CHAPTER 5
FAIR TRADE COMMISSION

SEC. 12. Fair Trade Commission. - To implement the national
policy and attain the objectives and purposes of this Act, an independent
Commission is hereby created, which shail be known as the Fair Trade
Commission, and which shall be organized within sixty (60) days after
the approval of this Act.

For administrative purposes, the Commission shail be under the
Office of the President.

(2) Composition. ~ The Commission shail be composed of a
Chairman and four (4) Associate Commissioners. The
Commissioners shall be citizens and residents of the
Philippines, at least forty (40) years of age, of good moral
character and of recognized probity and independence. The


W

Chairman and two (2) of the Associate Commissioners shall be
members of the Philippine Bar and the remaining two (2) shall
be of recognized competence in the ficld of economics preferably
in industrial organization economics, or finance, commerce,
accounting or management. They must have been in the active
practice of their professions for at least ten (10) years, but must
not have been candidates for any elective national or local office
in the immediately preceding elections, whether regular or
special.

(b) Term of Office. - The Chairman and the Associate
Commissioners shall be appointed by the President of the
Philippines. The term of office of the Chairman and the
Associate Commissioners shall be six (6) years without
reappointment. The Chairman shall hold office for six years and
of the first four (4) Associate Commissioners, two (2) shall hold
office for a term of four (4) years and two (2) for a term of two (2)
years. In case a vacancy occurs before the expiration of the
term of office, the appointment to such vacancy shall be only for
the unexpired term of the predecessor.

() Statement of Assets and Liabilities. - The Chairman and the
Associate Commissioners shall, upon assumption of office and
within the month of January of every years thereafter, as well as
upon the expiration of their respective terms of office, or upon
their resignation or separation from office, file with the Office of
the President, the President of the Senate and the Speaker of
the House of Representatives a true, accurate, complete,
detailed and swom statement of assets and liabilities, including
a statement of amounts and sources of income, personal and
family expenses, and income taxes paid for the immediatety
preceding calendar year: Provided, That the first statement may
be filed within the month of January next following if the
Chairman or the Associate Commissioner concerned assumes
office at any time before the end of the calendar year.

{d} Prohibition and Disqualifications. - The Commissioners shall not,
during their tenure, hold any other office of employment. They
shall not, during their tenure, directly or indirectly practice any
profession, participate in any business, or be financially
interested in any contract with, or any franchise, or special
privileges granted by the government or any subdivision,
agency, or instrumentality thereof, including government-owned
and controiled corporations of their subsidiaries. They shall
strictly avoid conflict of interest in the conduct of their office,
they shall not be qualified to run for any office in the election
immediately succeeding their cessation from office. They shall
not be allowed to appear or practice before the Commission for
two (2) years following their cessation from office.



2

No spouse or relative by consanguinity or affinity within the
fourth civil degree and nor former law, business, or professional
partner or associate of any of the Commissioners, the Chairman
and the Secretary of the Commission may appear as counsel or
agent on any matter pending before the Commission or transact
business directly or indirectly therein during his/her
incumbency and within one (1) year from his/her cessation of
office.

(e} Compensation of Commissioners. — The Chairman of the
Commission shall hold the rank of and shall have the privileges
and compensation equivalent to that of a Department Secretary,
while the Associate Commissioners shall each hold the rank of
and shall have the privileges and compensation equivalent to
that of a Department Undersecretary.

() Quorum. - Three (3) members of the Commission shall
constitute a quorum and the affirmative vote of three members
(3) shall be necessary for the adoption of any rule, ruling, order,
resolution, decision or other acts of the Commission en banc.

(8) Principal Office, Branch and Venue. — The Commission shall
hold its principal office in Metro Manila but it may, conduct
hearings outside of Metro Manila upon prior notice for inquiries,
studies or any other proceedings required for the proper and
efficient exercise of its power and the discharge of its duties. It
may establish branch offices outside of Metro Manila as may be
necessary for the effective discharge of its functions.

(h) Staff. - The Commission shall appoint, fix the compensation in
cordance with the Revised Compensation and Position
Classification Law, determine the status, qualifications, and
duties of an adequate staff, which shall include an Executive
Director of the Commission. The Exccutive Director shall be a
member of the Philippine Bar with at least ten (10) years
experience in the active practice of law in the Philippines or in
the discharge of functions of an office requiring as an
indispensable requisite, admission to the practice of law in the
Philippines. The members of the technical staff, except those
performing purely clerical functions shail possess at least a
Bachelor Degree in the following lines of specialization:
economics, preferably in industrial organization; law; finance;
commerce; accounting; or management.

SEC. 13. Original and Exclusive Jurisdiction. - The
Commission shall have original and exclusive jurisdiction to enforce,
implement and administer the provisions of this Act, its implementing
rules and regulations, and all other competition laws, and in particular:


3

(a) Powers of the Commission Upon Prior Notice and Hearing. — The
Commission may exercise the following powers, only upon prior
notice and hearing:

(1) Binding Rules - To issue binding rulings;

@) Show Cause Order and Decision - To issue show cause
orders, and thereafter, render decision thereon;

(3) Consent Judgment — To approve, or disapprove, proposals for
consent judgment;

(@) Preliminary Investigation ~ To conduct the required
preliminary investigation of all criminal cases involving
violations of this Act and other competition laws in
accordance with the procedure prescribed by the Rules of
Court and other laws and rules on the conduct of
preliminary investigations; and thereafter, if appropriate, to
sign, file, and prosecute the proper criminal information
before the Regional Trial Court that has territorial
jurisdiction thereof: Provided, That a civil case filed by the
Commission based in whole or part, upon the same set of
facts and issues as that of a pending criminal proceeding,
whether in the judicial or preliminary investigation stage,
shall constitute a prejudicial question and suspend such
criminal proceeding;

(5) Administrative Fines and Penalties — To impose the
appropriate administrative fines or penalties herein
authorized to be imposed;

(6) Delegation of Power Which Require Notice and Hearing. — The
Commission sitting en banc may delegate, on a case to case
basis, its power to hear and decide any case or matter which
require prior notice and hearing, to a Division of one (1)
Commissioner. The resolution of the Commission sitting en
banc making such a delegation shall be made part of the
records of the case or matter and the assignment of a case of
matter to a particular Division shall be made by means of a
raffle conducted in public; and

(7) Appeal to the Commission En Banc. — Final orders,
resolutions, judgments, or decisions of a Division may be
appealed to the Commission sitting en banc, by any party
adversely affected thereby, within a period of fifteen (15) days
from receipt of such order, resolution, judgment, or decision
on all issues of fact and law. The Commissioner whose
order, resolution, judgment, or decision is the subject of the
appeal is disqualified from participating, nor shall he be
present, in the deliberations and decision of the Commission
en banc. In case of a tie, the appealed order, resolution,
judgment, or decision is deemed affirmed. The Commission,
on its own, or upon motion of a party wha has actively
participated in the proceedings, order the presentation of


4

additional material evidence as part of the appellate
proceedings.

(b) Powers of the Commission Without Hearing. — The Commission
shall have the power to do the following acts, without hearing:

(1) Motu Propio Investigation or Upon Complaint. - To
investigate, on its own initiative or upon the complaint of
any person, any and all violations of this Act and other
competition laws prior to the commencement of a
preliminary investigation, or the issuance of a show
cause order, or the institution of a civil or administrative
action;

(2) Civil Action. ~ To attest and fite on behalf of the State, all
civil complaints for damages to business or property of
the State, arising from a violation of this Act and other
competition laws;

(3) Administrative Action, — To attest and file all complaints
before the proper administrative bodies or agencies for
appropriate administrative relief from, or against,
violations of this Act or other trade competition laws;

(4) Request for Assistance, - To request any government
agency for assistance and information necessary in the
discharge of its responsibilities under this Act, and
examine if necessary, pertinent records and documents
in the possession of such government agency;

(5) Industry Studies and Company Profile. - To gather and
compile information and investigate from time to time,
the way a given industry is structured or organized
whether as a monopoly, oligopoly, or competitive; the
way the firms within that industry act, behave, or
conduct themselves in such matters as setting prices,
determining output, and the resulting performance of the
industry as a whole; the organization, business, conduct,
practices and management of any person, partnership,
or corporation engaged in. trade, commerce, or industry
and its relation to individuals, partnerships,
associations, corporations, firms and other business
enterprises;

(6) Issuance of Subpoena. - To issue subpoena, subpoena
duces tecum and subpoena ad testificandum in all
hearings, inquiries, and proceedings being conducted by
the Commission or any of its Division in the exercise of
its functions, powers and duties under this Act, subject
to the following standards:

i. No subpoena shall be issued to require the production
or disclosure of trade secrets as defined in sub-

paragraph (7) hereof,


6

ii, A subpoena may be quashed only by means of a
motion duly set for hearing and on the grounds
prescribed by the Rules of Court;

iii. A person appearing before the Commission, or any of
its Divisions, in obedience to a subpoena shall be
advised, before he is required to testify or produce any
documentary or real evidence, of his right to be
assisted or represented by a counsel of his choice, or
if he has none, the Commission shall appoint a de
officio counsel for him; and of his rights to avail of the
immunity from prosecution privilege herein
prescribed;

(7) Annual and Special Reports, etc. ~ To require, by general
or special orders, firms engaged in trade, commerce, or
industry to file with the Commission in such form as the
Commission may prescribe, annual or special reports, or
answers in writing to specific questions, furnishing the
Commission such information as it may require as to the
organization, business, conduct, practices, management
and relation to other persons of the respective natural or
juridical persons or entities filing such reports or
answers in writing except that the Commission shall not
require, either by a specific order or by a subpoena, the
disclosure or production of trade secrets such as a secret
formula, pattern, device or compilation of information,
including names of customers, which is used in one’s
business and which gives one an opportunity to obtain
advantage over competitors who do not know or use it.
‘Trade secrets shall include a plan or process, tool,
mechanism, or compound known only to the owner and
his employees to whom it is necessary to confide it;

(8) Public Disclosure of information. — To make public, from
time to time, such portions of the information obtained
by it under this Act, except trade secrets and names of
customers, as it shall deem expedient in the public
interest;

(9) Reports and Recommendations to Congress. - To submit
annual and special reports to Congress, including
proposed legislation for the regulation of trade,
commerce, or industry, and provide for the publication of
its reports and resolutions in such form and manner as
may be best adopted for public information and
transparency;

(10) Trade Conditions, Domestic and Foreign. -'To study, from
time to time, trade conditions in and with foreign
countries where associations, combinations, or practices
of manufacturers, merchants, or traders, or other
conditions, may affect the foreign trade of the



16

Philippines, and report to Congress its findings and
recommendations thereon as it may deem advisable; and

(11) Internat Rules and Regulations. — To promulgate rules
and regulations for its internal operation.

Sec. 14. Jurisdiction of Regional Trial Courts. - The Regional
Trial Court of the province of city, where the firm or any of the firms
whose business acts or conduct constitutes the subject matter of a case,
conducts its principal place of business, shall have original and exclusive
jurisdiction, regardless of the penalties and fines herein imposed, of all
criminal and civil cases involving violations of this Act and other trade
competition laws. If the defendant, or anyone of them is charged in his
capacity as an officer, employee, or agent of a corporation or other
juridical entity who knowingly authorize the commission of the offense
charged, the Regional Trial Court of the province or city where such
corporation or juridical entity conducts its principal place of business,
shall have jurisdiction.

CHAPTER 6
ENFORCEMENT

Sac. 15, Preliminary Inquiry. - The Commission, in coordination
with other regulatory and/or appropriate government agency, shall motu
propio, upon the filing of a verified complaint by an interested party or
upon referral by the concerned regulatory agency, initiate a preliminary
inquiry for the enforcement of this Act based on reasonable grounds.

Sec 16. Powers of Concerned Regulatory Agencies. —
Notwithstanding the provisions of the preceding section, the exercise of
regulatory powers by different government agencies over an industry or a
sub-sector of an industry shall be cumulative and shall not be construed
in any way as derogating from the power and authority of the concerned
agency. The government agencies shall cooperate and coordinate with
one another in the exercise of their powers in order to prevent overlap, to
share confidential information, or for other effective measures.

Sec. 17. Power to Investigate and to Enforce Orders and
Resolutions. ~ The Commission shall conduct preliminary inquiries by
administering oaths, issuing subpoena duces tecum and summoning
witnesses, and commissioning consultants or experts. It shall determine
if any provision of this Act has been violated, enforce its orders and carry
out its resolutions by making use of any available means, provisional or
otherwise, under existing laws and procedures including the power to
punish for contempt and to impose fines.

Sec. 18. Selfinerimination. Pursuant to the preceding section, a
person subject of any preliminary inquiry or investigation by the
Commission shall produce the specified document or information when
so required by written notice: Provided, That no person shall be excused


17

from disclosing any document or information to the inquiring officer on
the ground that the disclosure of the information or document may be
incriminating: Provided, further, That such document or information
produced by the person subject of investigation shall not be admissible
as evidence against him in criminal proceedings: Provided, finally, That
such document or information shall be admissible in evidence in civil
proceedings including those arising from or in connection to the
implementation of this Act.

Sec. 19. Privileged Communication Exclusion. Nothing in the
preceding section shall compel the disclosure of _ privileged
communication: Provided, That the person who refuses to disclose the
information or produce the document or other material required by the
inquiring officer in relation to the preliminary inquiry being conducted
shall nevertheless be obliged to give the name and address of the firm to
whom, or by whom, or on whose behalf, such privileged communication
was made.

Sec. 20. Confidentiality of Information. Any document or
information submitted by firms, as determined and marked confidential
by the Commission, relevant to any investigation being conducted
pursuant to this Act shall not, in any manner, be directly or indirectly
disclosed, published, transferred, copied, or disseminated.

Any violation of this provision shall be imposed the penalty of
imprisonment ranging from three (3) to six (6 years and a fine of not less
than One hundred thousand pesos (Php100,000.00) but not more than
Five hundred thousand pesos (Php500,000.00).

Sec, 21. Immunity from Suit. Any person or firm which
cooperates or furnishes any information, document or data to the
Commission before or during the conduct of the preliminary inquiry that
constitutes material evidence as determined by the under this Act shall
be immune from any suit or charge including from affected parties and
third parties: Provided, further, That any person or firm which cooperates
or furnishes information, document or data to the Commission in
connection to an investigation being conducted shall not be subjected to
any form of reprisal or discrimination: Provided, furthermore, That such
reprisal or discrimination shall be considered a violation of this Act and
subjected to the penalties provided for under Section 10: Provided,
finally, That, notwithstanding the provisions of Section 37 hereof, the
firm which cooperates with the Commission in its investigation shall be
entitled to a reward equivalent to twenty percent (20%) of any monies
paid by the firm subject of the inquiry, or the monetary relief recovered
from court action.

Nothing in this section shall preciude prosecution for persons and
firms who reported to the Commission with malicious information, data
and falsified documents which is damaging to the business and integrity


1B

of the persons and firms under inquiry. Such act shall likewise be
considered as an unfair trade practice punishable under this Act.

Sec. 22. Termination and Action on Preliminary Inquiry. —The
Commission, after considering the statements made, or documents or
articles produced, in the course of an inquiry conducted by it, shall
terminate the preliminary inquiry by issuing a resolution ordering its
closure if no violation or infringement of this Act is found; or by issuing a
nolo contendere resolution; or issuing a resolution to, singly or
cumulatively, {a} impose penalties in the range provided under Section 10
hereof; (b) order sanctions which may be imposed by the regulatory
and/or appropriate government agency; (c) order the rectification of
certain acts or omissions; or (d) order the restitution to the affected
parties,

When determined by the facts and circumstances, the Commission
shall institute a civil action by class suit in the name of the Republic of
the Philippines, as parens patriae, on behalf of persons residing in the
Philippines, to secure treble damages for any injury sustained by such
persons by reason of any violation of this Act, plus the cost of suit and
reasonable attorney's fee.

If the evidence so warrants, the Commission shall institute
criminal cases for violation of this Act or relevant laws: Provided, That, for
criminal prosecution of violations of this Act, no preliminary investigation
shall be required, neither shall a petition for review be made: Provided,
further, That any appeal shall be instituted to a division of the Court of
Appeals exclusively handling competition and consumer protection laws.

Sec. 23. Nolo Contendere Resotution. — Any firm under inquiry
under the provisions of this Act may submit to a nolo contendere
resolution at any time before the termination of the preliminary inquiry
by: a) the payment of an amount within the range of penalties provided
for under Section 10; b) by entering into an undertaking to effectively
stop and rectify the acts complained against, make restitution to the
affected parties, whether or not the parties are plaintiffs or witnesses;
and, c) by submitting regular compliance reports as may be directed:
Provided, That, ten percent (10%) of the amounts paid under this section
shall equitably accrue to the Commission and/or regulatory government
agencies involved in the inquiry: Provided, further, That a nolo contendere
resolution shall not bar any inquiry for the same or similar acts if
continued or repeated.

SEC. 24. Implementing Policy; Non-Adversariat
Administrative Remedies. - As an implementing and enforcement
policy, the Commission shall, under such rules and regulations it may
Prescribe, encourage voluntary compliance with this Act and other
competition laws by making available to the parties concemed the
following and other analogous non-adversarial and non-adjudicatory
administrative remedies, before the institution of civil or criminal action:


19

(a) Request for Binding Ruling. - Any person who is in doubt as to
whether his contemplated or existing act, course of conduct,
agreement, decision or practice is in compliance with, is exempt
from, or in violation of any of the provisions of this Act, other
trade competition laws, or implementing rules and regulations
thercof, may request the Commission, in writing, to render a
binding ruling thereon;

(b) Show Cause Order. - Upon preliminary findings motu propio or
on written complaint under oath by an interested party, that
any person is conducting his business, in whole or in part, that
any person is conducting his business, in whole or in part, in a
manner that may not be in accord with the provisions of this
Act or other trade competition laws, and it finds that the
issuance of a show cause order would be in the interest of the
public, the Commission shall issue and serve upon such person
or persons a written description of its business conduct
complained of, a statement of the facts, data, and information
together with a summary of the evidence thereof, with an order
requiring the said person or persons to show cause, within the
period therein fixed, why no order shall issue requiring such
person or persons to cease and desist from continuing with ties
identified business conduct, or pay the administrative fine
therein specified, or readjust its business conduct or practices;

(c} Proposal for Consent Judgment. - At any time prior to the
issuance of a binding ruling, the promulgation of a cease and
desist judgment under a show cause order or the promulgation
of a decision of judgment in any administrative, civil, or criminal
case, the person or persons, whose business conduct is under
inquiry in the particular proceedings may, without in any
manner admitting a violation of this Act or any other trade
competition laws, submit to the Commission a written proposal
for the entry of a consent judgment, specifying therein the terms
and conditions of the proposed consent judgment.

(d) Consuitations. — Prior to the fitting of a request for a binding
ruling or the submission of a proposal for consent judgment, the
person or persons concerned may communicate, in writing, with
the Commission on matters that should be included or excluded
in such request or proposal, which the Commission may
consider necessary for the effective enforcement of this Act or
other trade competition laws.

(c] Binding Ruling, Cease and Desist Order, and Consent Judgment.
— Based upon the facts, data, and information disclosed or
supplied by the persons concerned, or established by
substantial evidence during the hearing, the Commission shail


20

issue a binding ruling, a cease and desist order or an approval
of the proposal for a consent judgment, as the case may be, with
or without conditions, to the effect that the particular act,
course of conduct, agreement, decision or practice is in accord
with this Act or other trade competition laws, or is exempt
therefrom, or is constitutive of a violation thereof. If the
Commission finds that there is substantial evidence tending to
show that the act, course of conduct, agreement, decision or
practice of the person or persons concerned is prohibited, it
shall include in its decision an order requiring the person or
persons concerned:

(1) Cease and Desist Order. — To cease and desist from
continuing with the identified act, course or conduct,
agreement, decision, or practice found to be violative of
the provisions of this Act;

(2) Administrative Penalty or Fine. ~ To pay the fine therein
fixed; and

(3) Readjustment of Business Methods. - To readjust, within
a reasonable period therein fixed, its method of doing
business, including a corporate reorganization or
divestment in the manner and under the terms and
conditions prescribed by the Commission, as it may
deem proper for the protection of the public interest.

{| Suspension of Administrative, Civil or Criminal Proceedings. ~ No
pending administrative, civil or criminal proceedings or those
filed thereafter, against any person, corporation or any other
juridical entity or its officers and employees, shall be
suspended, except upon order of the Commission on proper
motion, on the ground of the filing of a request for binding
ruling, the issuance of a show cause order or the filing of a
proposal for a consent judgment based, in whole or in part, on
the same set of facts and issues as that of the proceedings
sought to be suspended.

(g) Monitoring of Compliance. ~ The Commission shall monitor the
compliance by the person or persons concerned, their officers,
and employees, with the final and executory binding ruling,
cease and desist order, or approval of a consent judgment.
Upon motion of an interested party, the Commission shall issue
a certification to the effect that the person or persons concerned
have, or have not, as the case may be, complied with a final
and executory ruling, order, or approval.

(h) Inadmissibitity in Evidence. - The request for a binding ruling,
the show cause order, or the proposal for consent judgment; the
facts, data, and information therein contained or subsequently
supplied by the person or persons concerned; admissions, oral
or written, made by them against their interest; all other


21

documents filed by them including their evidence presented in
the proceedings before the Commission; and the judgment
rendered thereon, shall not be admissible as evidence in any
administrative, civil or criminal proceedings against such
Person or persons, their officers, employees, and agents nor
constitute a basis for the introduction of the binding ruling, the
cease and desist order, or the consent judgment as prima facie
evidence against such persons in any such action of proceeding.

{i} Modification or Reversal of Ruling, Order or Approval. — The
Commission may motu propio or upon petition of an interested
party, after notice and hearing, reopen and alter, modify, or set
aside, in whole or in part, a binding ruling, a cease and desist
order, or an approved consent judgment:

(1) Whenever conditions of material fact or law have so
changed as to require such action;

(2) When the concerned person or persons fail or refuse,
without justifiable cause therefore, to comply with any
condition attached to such ruling, order, or approval,
including an order to readjust their method of doing
business; or

(3) When the ruling, order, or approval was based on
deliberately falsified material fact, data, or
information supplied by an interested party benefited
by such ruling, order, or approval.

The modification or reversal of a binding ruling, a cease and desist
order, or an approved consent judgment shall have no retroactive
effect and shail not affect or impair any right legally acquired prior
to the modification or reversal thereof, except, that the party who is
guilty of unjustified failure or refusal to comply as specified in
paragraph (2) hereof, or have deliberately supplied such falsified
material fact, data or information as specified in paragraph (3)
above, is barred from claiming any vested right therein.

SEC. 25. Contempt. - The Commission, or any of its Divisions,
may summarily punish for contempt, or by a fine not exceeding thirty
(30) days, or both, any person guilty of such misconduct in the presence
of the Commission or any of its Divisions in its vicinity as to seriously
interrupt any hearing, session or any proceedings before it, including
cases in which a person willfully fails or refuses, without just cause, to
comply with a summons, subpoena or subpoena duces tecum legally
issued by the Commission or any of its Division, being present at a
hearing, proceeding, session or investigation, refused to be sworn as a
witness or to answer questions or to furnish information when lawfully
required to do so.


22

SEC. 26. Decisions of the Commission. - Decisions of the
Commission en banc shall be appealable to the Court of Appeals as
hereinafter provided. The appeal shall not stay the order, ruling or
decision sought to be reviewed, unless the Court of Appeals shall direct
otherwise upon suck terms and conditions it may deem just.

SEC. 27. Appeal to the Court of Appeats, — Any party who has
actively participated in the proceedings before the Commission and is
adversely affected by a binding ruling, order, or resolution, decision,
judgment, rule or regulation promulgation after notice and hearing by the
Commission sitting en bane, may appeal, by means of a notice of appeal
and a verified petition for review served upon the Commission and other
parties who actively participated in the proceedings, to the Court of
Appeals within thirty (30) days from receipt thereof, on the ground that
the appealed action of the Commission:

(a)is arbitrary to constitutional rights, power, privilege, or
immunity;

{b)is contrary to constitutional rights, power, privilege, or
immunity;

(c) is in excess of statutory jurisdiction, authority, or limitations, or
is contrary to law;

(4) is without observance of the procedure required by law; and
(c) is not supported by substantial evidence,

‘The Commission shall be included as a party respondent to the
case and shall be represented by its own legal staff.

SEC. 28. Appeat to the Supreme Court. - A decision of the Court
of Appeals may be appealed to the Supreme Court in the manner and on
the grounds prescribed by the Rules of Court.

SEC. 29. Special Courts. - To ensure the effective adjudication of
controversies under this Act and other trade competition laws, the
Supreme Court shall designate such Regional Trial Courts that will have
exchusive jurisdiction over unfair competition cases. ‘The uniform trial
procedures to be prescribed for such cases shall bo strictly observed and
postponements shall be discouraged. Decisions in such cases shall be
rendered within sixty (60) days from the termination of the case.

SEC. 30. Reception of Additional Evidence. - Any party in the
appellate proceedings may apply for leave to the Court of Appeals or the
Supreme Court, to adduce additional evidence before the Commission.
The Court may, under such terms and conditions as it may prescribe,
order the Commission to receive such additional evidence upon showing


23

that it is material and there are reasonable grounds for the failure to
Present said evidence in the proceedings before the Commission. The
Commission, sitting en banc, may modify its findings as to the facts, or
make new findings, by teason of the additional evidence taken, and it
shall file with the appellate court such modified or new findings and its
recommendations for the alfirmance, modification, or setting aside of the
appealed binding ruling, order, resolution, decision, judgment, rule or
regulation,

SEC. 31. Administrative Fines or Penalties. - Any person who
fails or neglects to comply with any term or condition of a binding ruling,
a cease and desist order or an order for readjustment issued by the
Commission, shall pay a fine of not less than Fifty Thousand Pesos
(Php50,000.00) for each violation. Each violation shall be deemed a
separate offense: Provided, That in the case of a violation through a
continuing failure or neglect to comply, cach day of continuance of such
failure or neglect shall be deemed a separate offense.

The Commission may likewise impose upon persons or entities
fines of not less than Five Thousand Pesos (Php5,000.00) to not more
than One Hundred Thousand Pesos (Php 100,000.00) where, intentionally
or negligently, they supply incorrect or misleading information in any
document, application or other paper filed with or submitted to the
Commission or supply incorrect or misleading information in an
application or other paper filed with or submitted to the Commission or
supply incorrect or misleading information in an application for a binding,
ruling, a proposal for a consent judgment, proceedings relating to a show
cause order, or application for modification of the Commission's ruling,
order or approval, as the case may be.

SEC. 32. Writ of Execution. - Upon the finality of its binding
ruling, order, resolution, decision, judgment, or rule or regulation,
(collectively, “Decision”, the Commission may issue a writ of execution
to enforce its decision and the payment of the administrative fines
provided in the preceding sections,

SEC. 33. Violation by Corporation, Partnership, Association,
and Other Entity. - Whenever a corporation, partnership, association,
firm or other entity, whether domestic or foreign, shall commit any of the
acts declared to be unlawful under this Act, the Chairman of the Board of
Directors, the President, the General Manager of the corporation, the
general partners of a partnership, and the officers and employees directly
responsible therefore, shall be imposed the penalty of imprisonment
provided in Section 21 hereof, with such juridical entity being jointly and
severally liable with the offended for the fine imposed therein.

Should the offense be committed by a foreign corporation licensed
to do business in the Philippines, the person or persons directly
responsible in the Philippines for the management and operation thereof,


24

Shall be liable. {n addition, its license to do business in the Philippines
‘shall be cancelled.

It shall not be a defense for the Chairman of the Board of Directors,
the President or the General Manager of the corporation or the general
partners of a partnership, or the persons responsible for the
management and operation of a foreign corporation licensed to do
business in the Philippines, that he was unaware of the violation, unless,
he shall have established to the satisfaction of the court that even with
the exercise of due diligence and proper supervision, he could not have
avoided or prevented the violation.

Any agreement between an officer, partner or any other officer and
@ corporation or partnership whereby the latter directly or indirectly
agrees to assume, satisfy or indemnify, in whole or in part, the fine of
civil obligation imposed under this Act of such corporate officer, partner,
manager or other officer found guilty of violating this Act, shall be void.

SEC. 34. Alien Violators.— If the person violating any provision
of this Act is a foreigner, he shall, in addition to the other penalties
imposed herein, be deported after service of sentence without need of any
further proceedings.

SEC. 35. Essential Commodities. ~ If the violation involves the
trade or movement of prime commodities such as rice, com, sugar,
chicken, pork, beef, fish, vegetables, and other articles or commodities of
prime or basic necessity as declared by the appropriate government
agency, through publication, the fine imposed by the Commission or the
courts, as the case may be, shall automatically be tripled and the
offender shall pay such threefold fine.

Szc. 36. Private Action. — Regardless of the status or pendency of
any proceedings, any firm that suffers injury by reason of any violation of
this Act may institute a separate and independent civil action,
irrespective of the amount involved in the controversy against the
defendant or defendants and shall recover treble damages sustained, the
costs of suit and reasonable attorney's fees: Provided, however, That no
filing fees shall be collected: Provided, further, That filing fees shall
constitute a first lien in the award of damages.

Sec. 37, Effect of Final Judgment. - Any final judgment in a
civil or criminal action brought by the Commission on behaif of the
people of the Philippines under this Act to the effect that a defendant has
violated any or all of the provisions of this Act shall be res judicata as to
any claim by any person on whose behalf such action was brought:
Provided, That such person notifies the court having jurisdiction of the
case within the period given by the court: Provided, further, That such
period shall not be less than ninety (90} days.


25

it shall be prima facie evidence against such defendant in any civil
action brought by any other party against such defendant under this Act
as to all matters respecting which said judgment would be an estoppel as
between the parties concerned.

Sec. 38. Distritrution of Damages Recovered. ~ The damages
recovered in a civil action under Section 23 of this Act shall be
distributed in the following manner: {1} as determined and to be
authorized by the Court having jurisdiction of the case; (2) ten percent
(10%) of the total amount of damages shall accruc to the Commission
and/or regulatory agency to be used exclusively in the enforcement of
this Act; and, (3) the remainder of which total amount of damages shall
be deemed a civil penalty by the Court and shall be deposited to the
National Treasury as part of the general fund of the government:
Provided, That any distribution procedure adopted by the Court shall
give preference to individual consumers and afford each person having
an interest a reasonable opportunity to secure his appropriate portion of
the net damages obtained.

Sec. 39. Measurement of Damages. - Damages may be proved
and assessed in the aggregate by statistical or sampling methods, by the
computation of illegal overcharges, or by such other reasonable system of
estimating aggregate damages as the court in its discretion may permit
without the necessity of separately proving the individual claim, of, or
amount of damage to, persons on whose behalf the suit was brought.

CHAPTER 7
OTHER PROVISIONS

Sec. 40. Statute of Limitations, - Any civil or criminal action to
enforce any cause of action arising from a violation of any provision of
this Act shall be forever barred unless commenced within five (5) years
after the cause of action accrues. The running of the statute of limitation
shall be suspended during the pendency of any proceeding.

The cause of action begins to run when the plaintiff suffers injury
to its business or property: Provided, That when the damage suffered by
the plaintiff is too speculative to prove, the cause of action does not
accrue until the damage becomes probable: Provided, however, That if
the plaintiff's injury is the result of the continuing violations of this Act,
each independent anti-competitive act may restart the limitation period
or when a plaintiff reasonably fails to uncover a cause or action that was
fraudulently concealed by a defendant,

Sec. 41. Prohibition on the Issuance of Temporary Restraining
Orders, Preliminary Injunctions and Preliminary Mandatory
Injunctions. — Except for the Supreme Court, no other court shall issue
any temporary restraining order, preliminary injunction or preliminary
mandatory injunction against the regulatory agency in the exercise of its


26

duties or functions: Provided, That, this prohibition shall apply in all
cases, disputes or controversies instituted by a private party, including,
but not limited to, cases filed by regulated firms or those claiming to have
rights through such firms: Provided, however, That, this prohibition shal!
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 be less than half
of the imposable fines provided for under Section 11 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 favour
of the regulatory agency.

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.

The Supreme Court may designate regional trial courts to act as
commissioners with the sole function of receiving facts of the case
involving the acts of the regulatory agency. The designated Regional Trial
Court shall, within thirty (30) days from the date of receipt of the referral,
forward its findings of facts to the Supreme Court for appropriate action.

Sec. 42. Intellectual Property Rights, - ‘The implementation of
the provisions of this Act shall be without prejudice to the rights,
liabilities and remedies under Republic Act No. 8293, otherwise known as
the Intellectual Property Code of the Philippines: Provided, That, the
exercise of intellectual property rights shall not in any way be used to
justify violations of this Act.

Sec. 43, Trade Associations. - Nothing contained in this Act shall
be construed to prohibit the existence and operation of trade associations
organized to promote quality standards and safety issues: Provided, That,
these associations shall not in any way be used to justify any violation of
this Act.

Sec. 44, Guidelines. - The Commission shall prepare the
necessary guidelines for the implementation of this Act: Provided, That,
where the guidelines would apply to an industry or a sub-sector of
industry that is subject to the jurisdiction of a regulatory agency, the
Commission shall, in preparing the guidelines, consult with the
concerned regulatory agency: Provided, further, That the Commission.
may revise such guidelines it deems necessary: Provided, however, That
such revised guidelines shall only take effect following its publication in
two newspapers of general circulation.


27

SEC. 45. Appropriations. - The amount necessary to implement
the provisions of this Act shall be included in the annual General

Appropriations Act.

Sec. 46. Separability Clause. - If any clause, sentence, section
or part of this Act shall be adjudged by a court of competent jurisdiction
to be invalid, such judgment shall not affect, impair or invalidate the
remainder of this Act, but shall be confined in its operation to the clause,
sentence, paragraph, section, or part thereof directly involved in the
controversy.

Sec. 47. Supptetory Application. — For purposes of this Act, the
Revised Penal Code, as amended, and other applicable laws shall be
applied in a suppletory character.

Sec. 48, Repealing Clause. - All provisions of law, orders,
decrees, executive orders, including rules and regulations or parts
thereof, which are contrary to or inconsistent with the provisions of this
Act are hereby repealed or modified accordingly: Provided, however,
That all existing competition laws and regulations shall remain in full
force and in effect: Provided, further, That in case of conflict between this
Act and such provisions of existing competition laws and regulations, the
provisions of this Act shall prevail.

Sec. 49. Effectivity Ciause. - This Act shall take effect fifteen

(15) days following its publication in the Official Gazette or in at least two
(2) national newspapers of general circulation.

Approved,


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

House Bill No. 1583

*

Introduced by Representatives
DIOSDADO MACAPAGAL ARROYO and GLORIA MACAPAGAL ARROYO

AN ACT
PENALIZING UNFAIR TRADE AND ANTI-COMPETITIVE
PRACTICES IN RESTRAINT OF TRADE, UNFAIR
COMPETITION, ABUSE OF DOMINANT POWER,
STRENGTHENING THE POWERS OF REGULATORY
AUTHORITIES AND APPROPRIATING FUNDS THEREFOR,
AND FOR OTHER PURPOSES

EXPLANATORY NOTE

For far too tong, our people have stood at the mercy of huge industries.
Due to lack of regulation and safeguards, unscrupulous businessmen have found
ingenious ways to artificially control prices and manipulate the free market
system. It thus behooves both Houses of Congress to estabtish a system that
can adequately provide protection to our people against price manipulators.

Article XH, Section 19, of the Constitution provides:

“Section 19. 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.”

As proof of the importance of this Constitutional mandate, Section 22 of
the same article encourages the promulgation of legislation that would impose
civil and criminal sanctions against those who circumvent or negate this principle.
Hence, Section 22 of the Constitution states:


“Section 22. Acis which circumvent or negate any of the
provisions of this Article shail be considered inimical to the national
interest and subject to criminal and civil sanctions, as may be
provided by law.”

Although previous legislations have been passed pursuant to this
Constitutional mandate, the pressing demands of our time require us to introduce
new legislation that can effectively address these pressing concems.

We are therefore encouraging our colleagues to support the passage of
this bill that aims to provide stricter penaities against combinations or
conspiracies in restraint of trade and all forms of attificial machinations that will
injure, destroy or prevent free market competition.

For these reasons, the passage of this bill is eamestly recommended.

DIOSDADO APAGAL ARROYO GLO} Lo bitte ovo
C0

Second District, Gémarines Sur nd District, Pantpanga


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

House Bill No, 1983

Introduced by Representatives
OlLOSDADO MACAPAGAL ARROYO and GLORIA MACAPAGAL ARROYO

7

AN ACT
PENALIZING UNFAIR TRADE AND ANTI-COMPETITIVE
PRACTICES IN RESTRAINT OF TRADE, UNFAIR
COMPETITION, ABUSE OF DOMINANT POWER,
STRENGTHENING THE POWERS OF REGULATORY
AUTHORITIES AND APPROPRIATING FUNDS THEREFOR,
AND FOR OTHER PURPOSES:

Be it enacted by the Senate and the House of Representatives of the
Philippines in Congress assembled:

ARTICLE |
TITLE AND DECLARATION OF POLICY

SECTION 1, Title. — This Act shail be known and cited as the "Competition
Act of 2010." .

SECTION 2. Declaration of Policy. - In line with the constitutional mandate
to regulate or prohibit monopolies when the public interest so requires and
Prevent combinations in restraint of trade or unfair competition, the State
endeavors to:

a. Promote and enhance free and full competition in
trade, industry and all commercial economic activities;


b. Prevent the concentration of economic power in a few
persons who threaten to control the production, trade, or industry,
stifle competition, distort, manipulate or constrict the discipline of
free markets, or tamper with the free play of the market forces and
eventually déstroy free and open markets; and

c. Penalize all forms of unfair trade, anti-competitive
conduct and combinations in restraint of trade, with the objective of
protecting and advancing consumer welfare.

ARTICLE It
SCOPE AND APPLICATION, DEFINITION OF TERMS

SECTION 3. Scope and Application. — This Act shalt be enforceable within
the territory of the Republic of the Philippines and shall apply to all areas of trade,
industry and commercial economic. activity. It shall likewise be applicable to
international trade having substantial effects in the Republic of the Philippines
including those that result from acts done outside the Republic of the Phitippines.

The Act shall apply to: (a) all firms as defined hereunder and all their
commercial agreements, actions or transactions involving goods, services or
intellectual property; and, (b) all natural persons who, acting in their capacity as
owner, manager or employee of a firm, shall authorize, engage or aid in the
commission of restrictive practices prohibited under this Act.

SECTION 4. Definition of Terms. — As used in this Act, the following terms
shail be construed to mean as follows:

a. Cartel shall mean a combination of firms, providing
goods in relevant markets, acting or joined together to obtain a
shared monopoly to control production, sale and price, or to obtain
control in any particular industry or commodity, or a group of firms
that agree to restrict trade to their mutual benefit, which may or may
not be of an international scale. It shall also refer to firms or section
of firms having common interest designed to prevent extreme or
unfair competition and allocate markets, and to promote the
exchange of knowledge resulting from scientific and technical
research, exchange of patent rights and standardization of
products;

b. Competition shall mean the process by which
economic agents, acting independently in a market, limit each
other's ability to control the prevailing conditions in the market;


¢. Control refers to at least twenty percent (20%)
ownership, directly or indirectly, of a firm or a group of firms by
another firm;

d. Firm shall include any person, partnership,
combination or association in any form, engaged directly or
indirectly in any economic activity: Provided that, two firms, one of
which is controlled by the other, shall be treated as one firm:
Provided, further, That two or more firms that are controlled by a
single firm shall be treated as one firm;

e. Goods shall include alt types of goods and services;

f Market shall refer to a place or venue for commercial
activity, which may extend beyond the borders of the Republic of
the Philippines, where articles are bought or soid. tt shaif also refer
to the geographical or eecnomic extent of commercial demand;

Monopoly shail mean a privilege or undue advantage
of one or more firms, consisting in the exclusive right to carry on a
particular business or trade, and/or manufacture a particular
product, article or object of trade, commerce or industry. It is a
form of market structure in which one or only a few firms dominate
the total sales of a product, commodity or service;

bh. Monopoly Power shall refer to a situation where a
firm, either by itself or acting in collusion with other firms, is in a
position to controt a relevant market for the sale of a particular good
or service by fixing its prices, excluding competitor firm, or
controlling the market in a specific geographical area; and,

i, Relevant Market shall refer to the line of commerce
in which competition has been restrained. It shall also refer to the
geographic area involved, including all reasonably substitutable
goods, and all nearby competitors, to which consumers could turn if
the restraint or abuse results in the significant increase in prices.

ARTICLE itl
PROHIBITED ACTS

SECTION 5. Cartels — It shall be unlawful for firms providing goods in
relevant markets to join together to monopolize, or to control production in a
particular industry or commodity, the sale and price of such good, and to agree to
restrict trade for their mutual benefit, which may or may not be on an internationat


scale. This shall also include an association by agreement of firms or sections of
finns having common interests designed to promote the interchange of
knowledge resulting from scientific and technical researches, exchange of patent
Fights and standardization of products.

Restrictive agreements resulting from cartel-like behavior of firms, in any
form, are hereby per se deemed ifiegal. These shall include, but not limited to,
the following:

a. Agreements to fix selling price of goods or other terms
of sale;

b. Agreements to limit supply or output;

©. Agreements to divide the market, whether by volume
of sales or purchase or by tetitory, by type of goods sold, by
customers or sellers, or by any other means;

d. Agreements to exclude or limit dealings with particular
suppliers or sellers from supplying or'selling goods, or customers
from acquiring or buying goods; and.

e. —_ Agreements to fix setting price at auctions or in any
other form of bidding.

‘There shall be a prima facie case for the existence of a cartel if and when
the Department of Trade and Industry (DTI) or concerned regulatory agency finds
that two or more persons of firms competing for the same relevant market
perform uniform or complementary acts among themselves which tend to bring
about artificial and unreasonable increase in the price of any goods or when they
simultaneously and unreasonably increase the prices of their competing goods
thereby lessening competition among themselves.

SECTION 6. Monopolies. ~ It shall be unlawful for any firm to willfully
monopolize, or knowingly attempt to monopolize, the trade of goods or any part
of the trade or commerce within the Republic of the Philippines or with any
foreign country or territory. As prohibited in this Act, the essential elements of
the crime of monopolization are the possession of monopoly power and its willful
acquisition, maintenance or abuse fo exclude competitors from any part of trade,
commerce or industry as distinguished from the natural growth or development of
a firm as a consequence of a superior product, business acumen or historic
accident: Provided that, a firm that has at least fifty percent (50%) of the relevant
market as found and certified by the Department of Trade and Industry or the
concerned regulatory agency shall be deemed prima facie a monopoly or in
dominant position.



SECTION 7. Monopoly Power or Abusa of Market Power by One in
Dominant Position. — It shall be unlawful for one or more firms with market power
within relevant markets to abuse their monopoly power or dominant position by
engaging in unfair methods of competition or engaging in unfair or deceptive
trade practices, or entering into agreements, combinations in the form of trust or
otherwise, or conspiracy, with the purpose and effect to prevent, restrict, or
distort competition. Abusive agreements such as, but not limited to, any of the
following, shall be deemed to fall under the crime of abuse of monopoly power or
market power by one in dominant position:

a. Price Fixing — Any agreement to fix the selling price
of goods or other terms of sale, with the purpose and effect of
creating a monopoly or cartel, or lessening competition;

b. Bid Rigging — Any agreement to fix price at auctions
‘or in any other form of bidding, with the purpose and effect of
creating a monopoly or cartel, or lessening competition, Provided
that, nothing herein shall bar another prosecution against the ering
party for violation of applicable laws on procurement and public
biddings;

in determining whether there is price fixing or bid rigging, the
following circumstances may be considered:

i. generally, any considered evidence that two sellers of
similar goods have agreed to set the price of their goods, to sell
only a certain amount of their goods, of to self only to a limited
number of buyers or consumers;

ii. a drastic change in prices of goods and services
involving more than one seller of similar goods of different brands,
particularly if the changes in prices take place in equal amount and
about the same time;

ii, a seller refusing to sell based on an agreement with a
competitor,

- iv. the same firm has repeatedly been the low bidder
who has been awarded contracts for a certain service or a
particular bidder seems to win bids on a fixed-rotation;

v. there is an unusual and unexplainable difference
between the winning bid and all other bids; and


vi. the same bidder bids substantially higher on some
bids than on others, and there is no fogica! cost reason to explain
the difference.

c. Limitation and Control of Markets — Any agreement
to limit or controt production, markets, technical development, or
investment with the purpose and effect of creating a monopoly or
cartel, or lessening competition;

d. Market Allocation — Any agreement to divide the
market, whether by volume of sales or purchase or by territory, by
type of goods sold, by customers or sellers or by any other means,
with the purpose and effect of creating a monopoly or cartel, or
lessening competition;

€. Arrangements to Share Markets or Sources of
Suppiy — Any agreement to share markets or sources of supply of
raw materials, with the purpose and effect of creating a monopoly
or cartel, ar lessening competition;

f. Price Discrimination - Any agreement prescribing or
charging, directly or indirectly, discriminatory pricing terms or
condifions in the supply or purchase of goods of fike grade and
quality with the purpose and effect of creating a monopoly or cartel,
or substantially lessening competition: Provided that, nothing
contained herein shall be construed to prohibit permissible price
differentials unless the same shall have the effect of preventing,
restricting or distorting competition: Provided, further, That for the
purpose of this section, the following shall be considered
permissible price differentials:

i Socialized Pricing - Socialized pricing for the less
fortunate sector of the economy;

fi. Volume Discounts — Price differentials which reflect
an allowance for differences in the cost of manufacture, sale, or
delivery resulting from differing methods or quantities in which the
goods are sold or delivered to the purchasers;

ii, Competitive Pricing — A price differential or other
terms of sale in response to the competitive price of payments,
services or facilities fumished by a competitor,

iv. Bona fide Selection of Customers - The selection
of customers on bona fide transaction, and,


v. Price Differentials Due to Changing Market
Conditions or Marketability of Goods — Price changes from time
to time in response to changing conditions affecting the market or
the marketability of the goods concemed such as, but not limited to,
actual or imminent deterioration of perishable goods, obsolescence
of seasonal goods, distress sides under court process, or sale on
good faith in discontinuance of business.

Exclusivity Arrangement — Any agreement imposing
restnctions on the lease or contract for sale or trade of goods
concerning where, to whom, or in what forms goods may be sold or
traded, such as, but not limited to fixing prices, or giving preferential
discounts, or rebate upon such price, or imposing conditions not to
deal with competing firms, where the purpose of such agreement is
to lessen competition: Provided that, nothing contained herein shall
prohibit or render unlawful permissible franchising, licensing or
exclusive distributorship agreements.

h. Tie-In Arrangements — Any agreement making the
supply of particular goods dependent upon the purchase or lease of
other goods from the supplier or his consignee, where the purpose
and effect of such sale or lease or such condition is to substantially
lessen competition or to create a monopoly or cartel.

i. Boycott — Any concerted refusal to sell or conspiracy
not to sell or to stop doing business on the part of the suppliers of
any goods, unless for a legitimate purpose, such as but not limited
to:

i Defaulting Borrowers — refusal by one or more
credit institutions to extend loans to defaulting debtors;

ii Defaulting Buyers — refusal by one or more
manufacturers or sellers to sell on credit to defaulting customers;
and,

ii, Violators of Intellectual Property Rights — refusal
by manufacturers or sellers to have any commercial dealings with
fone or more fims who viglate the intelectual property rights of the
owners of patents, copyrights, trademarks and other intellectual
Property.


ARTICLE IV
PENALTIES

SECTION 8. Penaities. ~ Without prejudice to the violation of other laws,
any firm that shall be found to have violated Sections 5, 6 and 7 of this Act, or
any combination thereof, shall, for each and every violation, be punished by a
fine of not less One Million Pesos (Php1,000,000.00) and not exceeding Ten
Million Pesos (Php10,000,000.00) if a natural person; by a fine of not less than
Ten Million Pesos (Php10,000,000.00) but not exceeding One Hundred Million
Pesos (Php100,000,000.00) if a firm, and by imprisonment not exceeding ten
(10) years, or both, at the discretion of the court.

ARTICLE V
ENFORCEMENT

SECTION 9. Preliminary inquiry. — The Department of Justice (DOJ), in
coordination with the Department of Trade and Industry (DTN), other regulatory
and/or appropriate government agency, shall motu propio, upon the filing of a
verified complaint by an interested party or upon referral by the concemed
regulatory agency, intiate a preliminary inquiy for the enforcement of this Act
based on reasonable grounds. .

Secnon 10. Powers of Concemed Regulatory Agencies. —
Notwithstanding the provisions of the preceding section, the exercise of
regulatory powers by different govemment agencies over an industry or a sub-
sector of an industry shall be cumulative and shall not be construed in any way
as derogating from the power and authority of the concerned agency. The
goverment agencies shall cooperate and coordinate with one another in the
exercise. of their powers in order to prevent overlap, to share confidential
information, or for other effective measures.

SECTION 11. Power to investigate. - The DOJ may, through its duly
authorized inquiring officer, by written notice, require a firm or natural person to
produce a specified document, or to provide specified information which the DOJ
considers as relevant its investigation. The inquiring officer, upon the authority
granted by the Secretary of Justice, may engage the services of consultants or
experts to aid in the inquiry. He may also make use of any available or
analogous means under existing laws and procedures to determine if any
provision of this Act has been violated. For this purpose, he shall have the power
fo punish for contempt any firm which does not comply with the notice or order
for document, information or such other relevant matters and to impose a fine not
exceeding One Hundred Thousand Pesos (Php100,000.00) for non-compliance
with each notice or order.


SECTION 12. Seftincrimination and Privileged Communication Exclusion.
~ Pursuant to the preceding section, a person subject of any investigation by the
DOJ shail produce the specified document or information when so required by
writien notice: Provided that, no person shall be excused from disclosing any
document or information to the inquiring officer on the ground that the disclosure
of the information or document may be incrimination: Provided, however, That
such document or information produced by the person subject of investigation
shall not be admissible as evidence against him in criminal proceedings:
Provided, finally, That such document or information shall he admissible in
evidence in civil proceedings including those arising from or in connection to the
implementation of this Act.

Nothing in this section shall compel the disclosure of privileged
communication or trade secrets: Provided, That the person who refuses to
disclose the information or produce the document or other material required by
the inquiring officer in relation to the prefiminary inquiry being conducted shail
nevertheless be obliged to give the name and address of the firm to whom, or by
whom, or on whdse behalf, such privikeged communication was made.

SECTION 13. immunity from Suit. — Any person or firm which cooperates or
fumishes any information, document or data to the DOJ before or during the
conduct of the preliminary inquiry that constitutes material evidence as
determined by the DOJ under this Act shail be immune from any suit or charge
including from affected parties and third parties: Provided, further, That any
person or firm which cooperates or furnishes information, document or data to
the DOJ in connection to an investigation being conducted shall net be subjected
to any form of reprisal or discrimination: Provided, furthermore, That such reprisal
or discrimination shall be considered a violation of this Act and subjected to the
penalties provided for under Section 8: Provided, finally, That, notwithstanding
the provisions of Section 17 hereof, the firm which cooperates with the DOJ in its
investigation shall be entitled to a reward equivalent to twenty percent (20%) of
any monies paid by the firm subject of the inquiry, or the monetary relief
recovered from court action.

SECTION 14. Termination of Preliminary Inquiry. - The DOJ, after
considering the statements made, or documents or articles produced, in the
course of an inquiry conducted by it, shail terminate the preliminary inquiry by
issuing a resolution ordering its closure if no violation or infringement of this Act
is found: or by issuing a nolo contendere resolution; or to, singly or cumulatively:
(2) endorse the findings to the regulatory agency for the imposition of
administrative fines; (b) institute a civil case for damages; or (c) file a criminal
case for violation of this Act or other refevant laws: Provided that, for purposes of
this Act, the preliminary inquiry referred to in Section 9 of this Act shall fulfil the
requirements of a preliminary investigation: Provided, further, That no appeal can
be taken from the said resolution unless issued with grave abuse of discretion.


SECTION 15. Nolo Contendere Resolution, — Any firm under inquiry under
the provisions of this Act may submit to a nolo contendere resolution at any ime
before the termination of the preliminary inquiry by: a) the payment of an amount
within the range of penalties provided for under Section 8; b) by entering into an
undertaking to effectively stop and rectify the acts complained against, make
restitution to the affected parties, whether or not the parties are complainants or
witnesses; and, c) by submitting regular compliance reports as may be directed:
Provided that, five percent (5%) of the amounts paid under this section shall
equitably accrue to the government agencies involved in the inquiry: Provided,
further, That a nolo contendere resolution shall not bar any inquiry for the same
or similar acts if continued or repeated

SECTION 16. Court Action. — In addition to any criminal action, the DOJ,
when instituting the civil action, shall bring it in the name of the Republic of the
Philippines, as parens patriae, on behalf of persons residing in the Philippines, to
secure treble damages for any monetary injury sustained -by such natural
persons by reason of any violation of this Act plus the cost of suit and a
reasonable attorney's fee.

SECTION 17. Effect of Final Judgment. —The final judgment in an action
brought under the preceding section shall be res judicata as to any claim by any
person on whose behalf such action was brought: Provided that, such person
notifies the court having jurisdiction of the case within the period given. by the
court: Provided, further, That such period shail not be less than ninety (90) days.

SECTION 18. Distribution of Monetary Relief Recovered. — The monetary
relief recovered in a civil action under Section 15 of this Act shall be distributed in
the following manner: (1) as determined and to be authorized by the Regional
Trial Court having jurisdiction of the case; (2) ten percent (10%) of the total
amount of monetary relief shall accrue to the DOJ to be used in the enforcement
of this Act; and, (3) the remainder of which total amount of monetary relief shall
be deemed a civil penalty by the Regional Trial Court and shall be deposited to
the National Treasury as part of the general fund of the government: Provided
that, any distribution procedure adapted by the Regional Trial Court shall afford
each person having an interest in the monetary relief a reasonable opportunity to
secure his appropriate portion of the nat monetary relief obtained

SECTION 19. Evidential Effect of a Final Judgment. — Any finat judgment
rendered in any civil or criminal action brought by the DOJ on behalf of the
People of the Philippines under this Act to the effect that a defendant has
violated any or all of the provisions of this Act shall be prima facie evidence
against such defendant in any civil action brought by any other party against
such defendant under this Act as to all matters respecting which said judgment
would he an estoppel as between the parties concerned.


ARTICLE VI
OTHER PROVISIONS

SECTION 20. Statute of limitations. - Any civit or criminal action to enforce
any cause of action arising from a violation of any provision of this Act shall he
forever barred unless commenced within ten years (10) years after the cause of
action accrues. The running of the statute of limitation shall be suspended during
the pendency of any proceeding

SECTION 21. Imposition of Fines by Regulatory Agency. — Notwithstanding
any provisions of law, regulatory agencies shall, in the conduct of their functions
or duties, have the power to impose fines in the amount not less than One
Hundred Thousand Pesos (Php100,000.00) and not exceeding Five
Pesos (Php5,000,000.00), if a natural person; and not less than Five Million
Pesos (Php5,000,000.00) and not exceeding Fifty Million Pesos
{Php50,000,000.00) if a firm for each violation of or non-compliance with an order
oF notice of the regulatory agency. Ten percent (10%) of such fines shall accrue

, to the budget of the regulatory agency for the exclusive use in the enforcement of
this Act.

SECTION 22. Prohibition on the Issuance of Temporary Restraining Orders,
Preliminary injunctions and Preliminary Mandatory Injunctions. — Except for the
Supreme Court, no other court shall issue any temporary restraining order,
preliminary injunction or preliminary mandatory injunction against the regulatory
agency in the exercise of its duties or functions: Provided that, this prohibition
shall apply in all cases, disputes or controversies instituted by a private party,
including, but not limited to, cases filed by regulated firms or those claiming to
have rights through such firms: 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 ar amount to be fixed by the court, but in no case shall it be
less than half of the imposable fines provided for under Section 21 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
regulatory agency.

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 {I} year without pay in addition to other criminal, civil or administrative
penalties.

The Supreme Court may designate regional trial courts to act as
commissioners with the sole function of receiving facts of the case involving the


acts of the regulatory agency. The designated Regional Trial Court shalt, within
thirty (30) days from the date of receipt of the referral, forward its findings of facts
to the Supreme Court for appropriate action.

SECTION 23. Intellectual Property Rights. - The implementation of the
provisions of this Act shall be without prejudice to the rights, labilities and
remedies under Republic Act No. 8293, otherwise known as the Intellectual
Property Code of the Philippines: Provided that, the exercise of intellectual
property rights shall not in any way be used to justify violations of this Act.

SECTION 24. Guidelines. - The DOJ, in consultation with the DTI, shail
Prepare the necessary guidelines for the implementation of this Act: Provided
that, where the guidelines would apply to an industry or a sub-sector of industry
that is subject to the jurisdiction of a regulatory agency, the DOJ shall, in
preparing the guidelines, consuft with the concerned regulatory agency:
Provided, further, That the DOJ may revise such guidelines it deems necessary:
Provided, however, That such revised guidelines shall only take effect following
its publication in two newspapers of general circulation.

SECTION 25. Separability Clause.- tf any clause, sentence, section or part
of this Act shall be adjudged by a court of competent jurisdiction to be invalid,
such judgment shall not affect, impair or invafidate the remainder of this Act, but
shall be confined in its operation to the clause, sentence paragraph, section, or
part thereof directly involved in the controversy.

SECTION 26. Repealing Clause. — All provisions of law, orders, decrees,
executive orders, including rules and regulations or part¥ thereof, which are
contrary to or inconsistent with the provisions of this Act are*hereby repealed or
modified accordingly.

SECTION 27. Effectivity Clause. — This Act shall take effect fifteen (15) days
following its publication in the Official Gazette or in at least two (2) national
newspapers of general circulation.

Approved,


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

FIFTEENTH CONGRESS
First Regular Session

House BiliNo,__ 1733

INTRODUCED BY HON, MARCELINO “MARCY” R. TEODORO.

EXPLANATORY NOTE
The Constitution, Article Xli, Section 1, provides that:

"Section 19. 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.”

This constitutional provision not only recognizes the danger that
monopolies pose on the public interest, but also contemplates that monopolies
emerging, through restraint of trade or unfair competition, must be struck down in
the incipiency.

This bill is a reaction to observation of industries being cartelized when
few suppliers of a vital product conspire to fix prices to the detriment of the public.
In very sensitive public utilities, small operators, who collectively may be able to
provide better and geographically farther-reaching service, are unable to do so
because of undue retraints imposed by the giants of the sector. In protecting
their turf, the giants and the virtual monopolies place public interest below the
objective of protecting market share and profitability,

The bill provides for treble-damage action. The fear of treble-damage
actions is one of the potent influences in securing compliance with antitrust.
Private suits are one of the important supplementary enforcement device.
Beyond the scope of the bill, it must also be recognized that there is an urgent
need to strengthen the administrative machinery to be tasked with implementing
this Anti-Trust Law: the Department of Trade and Industry, through possibly a
Trade Commission to monitor the business sactor, and the Department of Justice,
for the prosecution of antitrust violators.

In view of the foregong, approval of this bill is eamestly sought.

MARCELINO “MARCY” R. TEQDORO
Representative, 1st District
City of Marikina


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

FIFTEENTH CONGRESS
First Regular Session

House Bill No.__ 1733

INTRODUCED BY HON. MARCELINO “MARCY” R. TEODORO

AN ACT
AMENDING ACT NO.3815, ALSO KNOWN AS THE REVISED PENAL CODE,
AS AMENDED, ARTICLE 186 ON MONOPOLIES AND COMBINATIONS IN
RESTRAINT OF TRADE

Be it enacted by the Senate and the House of Representatives of the
Philippines in Congress assembled:

SECTION 1. Republic Act No.3815, also known as the “Revised Penal
Gade’, Article 186 on Monopolies and Combinations in Restraint of Trade is
hereby amended to read as follows:

Article 186. Monopolies and Combinations in Restraint of Trade. - The
penalty of PRISION MAYOR or a fine not exceeding ONE MILLION pesos
{PhP1,000,000,00) if a corporation, of, if any person, FIVE HUNDRED
THOUSAND pesos (PRPS00,000.00), or both shall be imposed upon:

(1) Any person who shall enter into any contract or agreement or shall take
part in any conspiracy or combination in the form of a trust or otherwise, in
restraint of trade or commerce or to prevent by artificial means free
competition in the market;

{2) Any person who shall monopolize any merchandise or abject of trade or
commerce, or shall combine with any other or persons to monopolize and
merchandise or object in order to alter the price thereof by spreading,
false rumors or making use of any other article to restrain free competition
in the market;

Any person who, being a manufacturer, producer, or processor of any
merchandise or object of commerce or object of commerce or an importer
of any merchandise or abject of commerce from any foreign country,
elther as principal or agent, wholesaler or retailer, shall combine, conspire
or agrae in any manner with any merchandise or object of commerce from
any foreign county, either a principal or agent, wholesaler or retailer,


shail combine, conspire or agree in any manner with any person likewise
engaged in the manufacture, production, processing, assembling or
Importation of such merchandise or object of commerce or with any ather
persons net so similarly engaged for the purpose of making transactions
prejudicial to Jawful commerce, or of increasing the market price in any
part of the Philippines, of any such merchandise or object of commerce
manufactured, produced, processed, assembled in or imported into the
Philippines, or of any article in the manufacture of which such
manufactures, produced, or imported merchandise or abject of commerce
is used.

SECTION 2. Repealing Clause. - Any law, presidential decree or

issuance, executive order, letter of instruction, administrative order, rule or

regulation contrary to or inconsistent with the provisions of this Act is hereby
repealed, modified or amended accordingly.

SECTION 3. Effectivity Clause. - This Act shall take effect fifteen (15) days

after its publication in at least two(2) newspapers of general circulation.

Approved,


FIFTEENTH CONGRESS })
REPUBLIC OF THE PHILIPPINES y
FIRST REGULAR SESSION }

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

' 1980

House Bill No.,

EXPLANATORY NOTE

This bill seeks to penalize monopolies and unfair competition and

establish the Fair Trade Commission, defining its powers and functions.

"The 1987 Constitution expressly provides that the State shall regulate
or prohibit monopolies when the public interest so requires. It also stipulates
that no combinations in restraint of trade or unfair competition shall be
allowed, However, despite the constitutional guarantees and the existence of
laws that affect competition, such laws are inadequate. The economy
continues to be dominated by groups of businesses with substantial market
power and political influence. Also, competifion in the domestic market
remains restricted in key sectors.

The lack of genuine competition in certain industries impairs public
welfare and undermines the country's credibility to provide a business climate
conductive to investment.

‘The proposed bill aims to encourage fair and free economic
competition by prohibiting the abuse of market-dominant positions and the
excessive concentration of economic power by regulating improper concerted
acts and unfair business practices, thereby stimulating creative business
activities, protecting consumers and promoting the balanced development of
the national economy. Among the key features of the bill are the creation of a
Fair Trade Commission that shall investigate, gather evidence and initiate
prosecution of those engaged in unfair trade practices, the description of
monopoly and cartels ad the imposition of defined sanctions and penalties for
violation of the fair competition.


Sec. 49. Effectivity Clause. — This Act shall take effect fifteen (15)
days following its publication in the Official Gazeffe or in at least two (2)
national newspapers of general circulation.

Approved,


The Supreme Court may designate regional trial courts to act as
commissioners with the sole function of receiving facts of the case involving
the acts of the regulatory agency. The designated Regional Trial Court shall,
within thirty (30) days from the date of receipt of the referral, forward its
findings of facts to the Supreme Court for appropriate action.

SEC. 42. intellectual Property Rights. — The implementation of the
provisions of this Act shall be without prejudice to the rights, liabilities and
remedies under Republic Act No. 8293, otherwise known as the Intellectual
Property Code of the Philippines: Provided, That, the exercise of intellectual
property rights shall not in any way be used to justify violations of this Act.

SEC. 43. Trade Associations. — Nothing contained in this Act shall be
construed to prohibit the existence and operation of trade associations
organized to promote quality standards and safety issues: Provided, That,
these associations shall not in any way be used to justify any violation of this
Act

Sec. 44, Guidefines. - The Commission shall prepara the necessary
guidelines for the implementation of this Act: Provided, That, where the
guidelines would apply to an industry or a sub-sector of industry that is subject
to the jurisdiction of a regulatory agency, the Commission shail, in preparing
the guidelines, consuit with the concerned regulatory agency: Provided,
further, That the Commission may revise such guidalines it deems necessary:
Provided, however, That such revised guidelines shall only take effect
following its publication in two newspapers of general circulation.

Sec. 45, Appropriations. — The amount necassary to implement the
Provisions of this Act shall be included in the annual General Appropriations
Act.

SEC. 46. Separability Clause. — If any clause, sentence, section or
part of this Act shall be adjudged by a court of competent jurisdiction to be
invalid, such judgment shall not affect, impair or invalidate the remainder of
this Act, but shall be confined in its operation ta the clause, sentence,
paragraph, section, or part thereof directly involved in the controversy.

SEC. 47, Suppletory Application. — For purposes of this Act, the
Revised Penal Code, as amended, and other applicable laws shall be applied
in a suppletory character.

Sec. 48. Repealing Clause. - All provisions of law, orders, decrees,
executive orders, including rules and regulations or pasts thereof, which are
contrary to or inconsistent with the provisions of this Act are hereby repealed
‘of modified accordingly: Provided, however, That all existing competition laws
and regulations shail remain in full force and in effect: Provided, further, That
in case of conflict between this Act and such provisions of existing competition
Jaws and regulations, the provisions of this Act shall prevail,


Sec, 39. Measurement of Damages. - Damages may be proved and
assessed in the aggregate by statistical or sampling methods, by the
computation of illegal overcharges, or by such other reasonable system of
estimating aggregate damages as the court in its discretion may permit
without the necessity of separately proving the individual claim, of, or amount
of damage to, persons on whose behalf the suit was brought.

CHAPTER 7
OTHER PROVISIONS

Sec. 40. Statute of Limitations. — Any civil or criminal action to
enforce any cause of action arising from a violation of any provision of this Act
shall be forever barred unless. commenced within five (5) years after the
cause of action accrues. The running of the statute of limitation shall be
suspended during the pendency of any proceeding.

The cause of action begins to run when the plaintiff suffers injury to its
business or property: Provided, That when the damage suffered by the
plaintiff is too speculative to prove, the cause of action does not accrue until
the damage becomes probable: Provided, however, That if the plaintiff's injury
is the result of the continuing violations of this Act, each independent anti-
‘competitive act may resiart the limitation period or when a plaintiff reasonably
fails to uncover a cause or action that was fraudulently concealed by a
defendant.

Sec. 41. Prohibition on the Issuance of Temporary Restraining
Orders, Preliminary injunctions and Preliminary Mandatory Injunctions.
— Except for the Supreme Court, no other court shall issue any temporary
Festraining order, preliminary injunction or preliminary mandatory injunction
against the regulatory agency in the exercise of ils duties or functions:
Provided, That, this prohibition shall apply in all cases, disputes or
controversies instituted by a private party, including, but not limited to, cases
filed by regulated firms or those claiming to have rights through such firms:
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 shail it be less than half of
the imposable fines provided for under Section 11 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 favour of the
regulatory agency.

Any temporary restraining order, prefiminary injunction or preliminary
mandatory injunction issued in violation of this saction 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. 34. Alien Violators.- _If the person violating any provision
of this Act is a foreigner, he shall, in addition to the other penalties imposed
herein, be deported after service of sentence without need of any further
proceedings.

SEC. 35. Essential Commodities. - If the violation involves the trade
‘or movement of prime commodities such as rice, com, sugar, chicken, pork,
beef, fish, vegetables, and other articles or commodities of prime or basic
Necessity as declared by the appropriate government agency, through
publication, the fine imposed by the Commission or the courts, as the case
Tray be, shall automatically be tripled and the offender shall pay such
threefold fine.

SEC. 36. Private Action. — Regardless of the status or pendency of
any proceedings, any firm that suffers injury by reason of any violation of this
‘Act may institute a separate and independent civil action, irrespective of the
amount involved in the controversy against the defendant or defendants and
shall recover treble damages sustained, the costs of suit and reasonable
atiomey's fees: Provided, however, That no filing fees shall be collected:
Provided, further, That filing fees shall constitute a first len in the award of
damages.

Sec. 37. Effect of Final Judgment. — Any final judgment in a civil or
criminal action brought by the Commission on behalf of the people of the
Philippines under this Act to the effect that a defendant has violated any or all
of the provisions of this Act shall be res judicata as to any claim by any
person on whose behalf such action was brought: Provided, That such
person notifies the court having jurisdiction of the case within the period given
by the court: Provided, further, That such period shail not be less than ninety
(90) days.

It shall be prima facie evidence against such defendant in any civil
action brought by any other party against such defendant under this Act as fo”
all matters respecting which said judgment would be an estoppel as between
the parties concemed.

Sec, 38, Distribution of Damages Recovered. - The damages
recovered in a civil action under Section 23 of this Act shall be distributed in
the following manner, (1) as determined and to be authorized by the Court
having jurisdiction of the case, (2) ten percent (10%) of the total amount of
damages shall accrue to the Commission and/or regulatory agency to be used
exclusively in the enforcement of this Act; and, (3) the remainder of which
total amount of damages shail be deemed a civil penalty by the Court and
shall be deposited to the National Treasury as part of the general fund of the
government: Provided, That any distribution procedure adopted by the Court
shall_giva preference to individual consumers and afford each person having
an interest a reasonable opportunity to secure his appropriate portion of the
net damages obtained.


each day of continuance of such failure or neglect shall be deamed a
‘separate offense.

The Commission may likewise impose upon persons or entities fines of
not less than Five Thousand Pesos (Php5,000.00) to not more than One
Hundred Thousand Pesos (Phpt00,000.00) where, intentionally or
negligently, they supply incorrect or misleading information in any document,
application or other paper filed with or submitted to the Commission or supply
incorrect or misleading information in an application or other paper filed with
oF submitted to the Commission or supply incorrect or misleading information
in an application for a binding ruling, a proposal for a consent judgment,
proceedings relating to a show cause order, or application for modification of
the Commission's ruting, order or approval, as the case may be.

SEC. 32. Writ of Execution. — Upon the finality of its binding ruling,
order, resolution, decision, judgment, or rule or regulation, (collectively,
“Decision”), the Commission may issue a writ of execution to enforce its
decision and the payment of the administrative fines provided in the preceding
‘sections.

SEC. 33, Violation by Corporation, Partnership, Association, and
‘Other Entity. - Whenever a corporation, partnership, association, firm or
other entity, whether domestic or foreign, shall commit any of the acts
declared to be unlawful under this Act, the Chairman of the Board of
Directors, the President, the General Manager of the corporation, the general
partners of a partnership, and the officers and employees directly responsible
therefore, shall be imposed the penalty of imprisonment provided in Section
21 hereof, with such juridical entity being jointly and severally fiable with the
offended for the fine imposed therein.

Should the offense be committed by a foreign corporation licensed to
do business in the Philippines, the person or persons directly responsible in
the Philippines for the management and operation thereof, shalt be liable. In
addition, its license to do business in the Philippines shall be cancelled.

It shall not be a defense for the Chairman of the Board of Directors, the
President or the General Manager of the corporation or the general partners
of a partnership, or the persons responsible for the management and
Operation of a foreign corporation licensed to de business in the Philippines,
that he was unaware of the violation, unless, he shail have established to the
Safisfaction of the court that even with the exercise of due diligence and
Proper supervision, he could not have avoided or prevented the violation.

Any agreement between an officer, partner or any other officer and a
corporation or partnership whereby the latter directly or indirectly agrees to
assume, satisfy or indemnify, in whole or in part, the fine of civil obligation
imposed under this Act of such corporate officer, partner, manager or other
officer found guilty of violating this Act, shall be void.


who actively participated in the proceedings, to the Court of Appeals within
thirty (30) days from receipt thereof, on the ground that the appealed action of
the Commission:

{a)is arbitrary to constitutional rights, power, privilege, or immunity,
(b)is contrary to constitutional rights, power, privilege, or immunity,

(©)is in excess of statutory jurisdiction, authority, or limitations, or is
contrary to law,

(d) is without observance of the procedure required by faw, and
{e} is not supported by substantial evidence.

‘The Commission shall be included as a party respondent to the case
and shal be represented by its own legal staff.

SEC. 28. Appeal to the Supreme Court. - A decision of the Court of
Appeals may be appealed to the Supreme Court in the manner and on the
grounds prescribed by the Rules of Court.

SEC. 29. Special Courts. - To ensure the effective adjudication of
controversies under this Act and other trade competition laws, the Supreme
Court shall designate such Regional Trial Courts that will have exclusive
jurisdiction over unfair competition cases. The uniform trial procedures to be
prescribed for such cases shall be strictly observed and postponements shall
be discouraged. Decisions in such cases shall be rendered within sixty (60)
days from the termination of the case,

SEC. 30. Reception of Additional Evidence. - Any party in the
appellate proceedings may apply for leave to the Court of Appeals or the
Supreme Court, to adduce additional evidence before the Commission, The
Court may, under such terms and conditions as it may prescribe, order the
Commission to receive such additional evidence upon showing that it is
material and there are reasonable grounds for the failure to present said
evidence in the proceedings before the Commission. The Commission, sitting
en banc, may modify its findings as to the facts, or make new findings, by
reason of tha additional evidence taken, and it shall file with the appellate
court such modified or new findings and its recommendations for the
affirmance, modification, or setting aside of the appealed binding ruling, order,
resolution, decision, judgment, rule or regulation.

SEC. 31. Administrative Fines or Penaities. - Any person who fails
or neglects to comply with any term or condition of a binding ruling, a cease
and desist order or an order for readjustment issued by the Commission, shall
pay a fine of not less than Fifty Thousand Pesos (Php50,000.00) for each
violation. Each violation shalt be deemed a separate offense: Provided, That
in the case of a violation through a continuing failure or neglect to comply,


(i) Modification or Reversal of Ruling, Order or Approval. - The
Commission may motu propio or upon petition of an interested
party, after notice and hearing, reopen and alter, modify, or set
aside, in whole or in part, a binding ruling, a cease and desist order,
‘of an approved consent judgment

(+) Whenever conditions of material fact or taw have so
changed as to require such action;

(2) When the concarmed person or persons fail or refuse,
without justifiable cause therefore, to comply with any
condition attached to such ruling, order, or approval,
including an order to readjust their methad of doing
business; or

(3) When the ruling, order, or approval was based on
deliberately falsified material fact, data, or information
supplied by an interested party benefited by such suling,
order, or approval.

‘The modification or reversal of a binding ruling, a cease and desist
order, or an approved consent judgment shall have no retroactive
effect and shall not affect or impair any right legally acquired prior to
the modification or raversal thereof, except, that the party who is guilty
of unjustfied failure or refusal to comply as specified in paragraph (2)
hereof, or have deliberately supplied such falsified material fact, data or
information as specified in paragraph (3) above, is barred from claiming
any vested right therein.

SEC, 25. Contempt. - The Commission, or any of its Divisions, may
‘summarily punish for contempt, or by a fine not exceeding thirty (30) days, or
both, any person guilty of such misconduct in the presence of the Commission
or any of its Divisions in its vicinity as to seriously interrupt any hearing,
session or any proceedings before it, including cases in which a person
willfully fails or refuses, without just cause, to comply with a summons,
subpoena of subpoena duces tecum legally issued by the Commission or any
‘of its Division, being present at a hearing, proceeding, session or
investigation, refused to be swom as a witness or to answer questions or to
furnish information when lawfully required to do so.

SEC. 26. Decisions of the Commission. ~ Decisions of the
Commission en banc shail be appealable to the Court of Appeals as
hereinafter provided. The appeal shall not stay the order, ruling or decision
sought to be reviewed, unless the Court of Appeals shall direct otherwise
upon such terms and conditions it may deem just.

SEC. 27. Appeal to the Court of Appeals. — Any party who has
actively participated in the proceedings before the Commission and is
adversely affected by a binding muling, order, or resolution, decision,
Judgment, rule or regulation promulgation after notice, and hearing by the
Commission sitting er banc, may appeal, by means of a notice of appeal and
Verified petition for review served upon the Commission and other parties


Commission finds that there is substantial evidence tending to show
that the act, course of conduct, agreement, decision or practice of
the person or persons concemed is prohibited, it shall include in its
decision an order requiring the person or persons concemed:

(1) Cease and Desist Order. — To cease and desist from
continuing with the identified act, course or conduct,
agreement, decision, or practice found to be violative of the
provisions of this Act,

(2) Administrative Penalty or Fine. - To pay the fine therein
fixed, and

(3) Readjustment of Business Methods. - To readjust, within a
reasonable period therein fixed, its mathod of doing
business, including a corporate reorganization or
divestment in the manner and under the terms and
‘conditions prescribed by the Commission, as it may deem
proper for the protection of the public interest.

(f) Suspension of Administrative, Civil or Criminal Proceedings. - No
pending administrative, civil or criminal proceedings or those filed
thereafter, against any person, corporation or any other juridical
entity or its officers and employees, shall be suspended, except
upon order of the Cammission on proper motion, on the ground of
the filing of a request for binding ruling, the issuance of a show
cause order or the filing of a proposal for a consent judgment
based, in whole or in part, on the same set of facts and issues as
that of the proceedings sought to be suspended.

(g) Monitoring of Compliance. - The Commission shall monitor the
compliance by the person or persons concemed, their officers, and
employees, with the final and executory binding ruling, cease and
desist order, or approval of a consent judgment. Upon motion of an
interested party, the Commission shall issue a certification to the
effect that the person or persons concemed have, or have not, as
the case may be, complied with a final and executory ruling, order,
or approval,

(h) inadmissibility in Evidence. — The request for a binding ruling, the
. show cause order, or the proposal for consent judgment; the facts,
data, and information therein contained or subsequently supplied by
the person or persons concemed,; admissions, oral or written, made
by them against their interest; all other documents filed by them
including their evidence presented in the proceedings before the
Commission; and the judgment rendered thereon, shail not be
admissible as evidence in any administrative, civil or criminal
proceedings against such person or persons, their officers,
‘employees, and agents nor constitute a basis for the introduction of
the binding ruling, the cease and desist order, or the consent
judgment as prima facie evidence against such persons in any such
action of proceeding


agreement, decision of practice is in compliance with, is exempt
from, or in violation of any of the provisions of this Act, other trade
competition laws, or implementing rules and regulations thereof,
may request the Gommission, in writing, to render a binding ruling
thereon; :

(b) Show Cause Order. — Upon preliminary findings motu propio or on
written complaint under oath by an interested party, that any person
is conducting his business, in whole or in part, that any person is
conducting his business, in whole or in part, in a manner that may
not be in accord with the provisions of this Act or other trade
competition laws, and it finds that the issuance of a show cause
order would be in the interest of the public, the Commission shall
issue and serve upon such person or persons a written description
of its business conduct complained of, a statement of the facts,
data, and information together with a summary of the evidence
thereof, with an order requiring the said person or persons to show
cause, within the period therein fixed, why no order shall issue
requiring such person or persons to cease and desist from
continuing with ties identified business conduct, or pay the
administrative fine therein specified, or readjust its business
conduct or practices;

(c) Proposal for Consent Judgment. — At any time prior to the issuance
of a binding ruting, the promulgation of a cease and desist judgment
under a show cause order or the promulgation of a decision of
judgment in any administrative, civil, or criminal case, the person or
Persons, whose business conduct is under inquiry in the particular
proceedings may, without in any manner admitting a violation of this
Act or any other trade competition laws, submit to the Commission
@ written proposal for the entry of a consent judgment, specifying
therein the terms and conditions of the proposed consent judgment.

{d) Consuttations, — Prior to the fitting of a request for a binding ruling
or the submission of a proposal for consent judgment, the person or
Persons concemed may communicate, in writing, with the
Commission on matters that should be included or excluded in such
request or proposal, which the Commission may consider
necessary for the effective enforcement of this Act or other trade
competition laws.

(@) Binding Ruling, Cease and Desist Order, and Consent Judgment. -
Based upon the facts, data, and information disclosed or supplied
by the persons concemed, or established by substantial evidence
during the hearing, the Commission shall issue a binding ruling, a
cease and desist order of an approval of the proposal for a consent
judgment, as the case may be, with or without conditions, to the
effect that the particular act, course of conduct, agreement, decision
‘OF practice is in accord with this Act of other trade competition laws,
or is.exempt therefrom, or is constitutive of a violation thereot. If the



‘and firms under inquiry. Such act shall likewise be considered as an unfair
trade practice punishable under this Act.

Sec. 22. Termination and Action on Preliminary inquiry. —The
Commission, after considering the statements made, or documents or articles
produced, in the course of an inquiry conducted by it, shall terminate the
preliminary inquiry by issuing a resolution ordering its closure if no violation or
infringement of this Act is found; or by issuing a nofo contendere resolution; or
issuing a resolution to, singly or cumulatively, (a) impose penalties in the
range provided under Section 10 hereof, (b) order sanctions which may be
imposed by the regulatory and/or appropriate government agency, (c) order
the rectification of cartain acts of omissions; or (d) order the restitution to the
affected parties.

‘When determined by the facts and circumstances, the Commission
‘shail institute a civil action by class suit in the name of the Republic of the
Philippines, as parens patriae, on behalf of persons residing in the
Philippines, to secure treble damages for any injury sustained by such
persons by reason of any violation of this Act, plus the cost of suit and
reasonable attorney's fee.

If the evidence so warrants, the Commission shall institute criminal
cases for violation of this Act or relevant laws: Provided, That, for criminal
prosecution of violations of this Act, no preliminary investigation shail be
required, neither shalt a petition for review be made: Provided, further, That
‘any appeal shall be instituted to a division of the Court of Appeals exclusively
handling competition and consumer protection laws,

SEC. 23. Nofo Contendere Resolution, — Any firm under inquiry under
the provisions of this Act may submit to a nofo contendere resolution at any
time before the termination of the preliminary inquiry by: a) the payment of an
amount within the range of penalties provided for under Section 10; b) by
entering into an undertaking to effectively stop and rectify the acts complained
against, make restitution to the affected parties, whether or not the parties are
plaintiffs or witnesses; and, c) by submitting regular compliance reports as
may be directed: Provided, That, ten percent (10%) of the amounts paid under
this section shall equitably accrue to the Commission and/or regulatory
government agencies involved in the inquiry: Provided, further, That a nolo
contendere resolution shall not bar any inquiry for the same or similar acts if
continued or repeated.

SEC. 24. {mplementing Policy; Non-Adversarial Administrative
Remedies, — As an implementing and enforcement policy, the Commission
shall, under such rulas and regulations it may prescribe, encourage voluntary
compliance with this Act and other competition laws by making available to
the parties concemed the foltowing and ather anatogous non-adversarial and
Non-adjudicatory administrative remedies, before the institution of civil or
criminal action: .

{a) Request for Binding Ruling. — Any person who is in doubt as to
whether his contemplated or existing act, course of conduct,


Sec. 18. Seffsincrimination. Pursuant to the preceding section, a
person subject of any preliminary inquiry or investigation by the Commission
shall produce the specified document or information when so required by
written notice: Provided, That no person shall be excused from disclosing any
document or information to the inquiring officer on the ground that the
disclosure of the information or document may be incriminating: Provided,
further, That such document or information produced by the person subject of
investigation shall not be admissible as evidence against him in criminal
proceedings: Provided, finally, That such document or information shall be
admissible in evidence in civil proceedings including those arising from or in
connection to the implementation of this Act.

Sec. 19. Privileged Communication Exclusion. Nothing in the
preceding section shall compel the disclosure of privileged communication:
Provided, That the person who refuses to disclose the information or produce
the document or other material required by the inquiring officer in relation to
the preliminary inquiry being conducted shall nevertheless be obliged to give
the name and address of the firm to whom, or by whom, or on whose behalf,
such privileged communication was made.

Sec. 20. Confidentiality of Information. Any document or information
submitted by firms, as determined and marked confidential by the
Commission, relevant to any investigation being conducted pursuant to this
Act shail not, in any manner, be directly or indirectly disclosed, published,
transferred, copied, or disseminated.

Any violation of this provision shail be imposed the penalty of
imprisonment ranging from three (3) to six (6) years and a fine of not less than
One hundred thousand pesos (Php100,000.00) but not more than Five
hundred thousand pesos (Php500,000.00).

Sec. 21. Immunity from Suit Any person or firm which cooperates or
furnishes any information, document or data ta the Commission before or
during the conduct of the preliminary inquiry that constitutes material evidence
as determined by the under this Act shall be immune from any suit or charge
including from affected parties and third parties: Provided, further, That any
person or firm which cooperates or furnishes information, document or data to
the Commission in connection to an investigation being conducted shall not
be subjected to any form of reprisal or discrimination: Provided, furthenmore,
That such reprisal or discrimination shail be considered a violation of this Act
‘and subjected to the penalties provided for under Section 10: Provided, finally,
‘That, notwithstanding the provisions of Section 37 hereof, the firm which
cooperates with the Commission in its investigation shall be entitled to a
reward equivalent to twenty percent (20%) of any monies paid by the fim
subject of the inquiry, or the monetary relief recovered from court action.

Nothing in this section shall preclude prosecution for persons and firms
who reported to the Commission with malicious information, data and falsified
documents which is damaging to the business and integrity of the persons


resolutions in such form and manner as may be best
adopted for public information and transparency,

(10) Trade Conditions, Domestic and Foreign. — To study, from
time to time, trade conditions in and with foreign counties
where associations, combinations, or practices of
manufacturers, merchants, or traders, or other conditions,
may affect the foreign trade of the Philippines, and report to
Congress its findings and recommendations thereon as it
may deem advisable; and

(11) Infemal Rules and Regulations. - To promulgate rules and
regulations for its internal operation.

Sec. 14. Jurisdiction of Regional Trial Courts, — The Regional Trial
Court of the province of city, where the fim or any of the fims whose
business acts or conduct constitutes the subject matter of a case, conducts its
principal place of business, shall have original and exclusive jurisdiction,
regardless of the penalties and fines herein imposed, of all criminal and civil
cases involving violations of this Act and other trade competition laws. If the
defendant, or anyone of them is charged in his capacity as an officer,
employee, or agent of a corporation or other juridical entity who knowingly
authorize the commission of the offense charged, the Regional Triat Court of
the province or city where such corporation or juridical entity conducts its
principal place of business, shall have jurisdiction.

CHAPTER 6
ENFORCEMENT

Sec. 15. Preliminary Inquiry. — The Commission, in coordination with
other regulatory and/or appropriate government agency, shall motu propio,
upon the filing of a Verified complaint by an interasted party or upon referral by
the concemed regulatory agency, initiate a preliminary inquiry for the
enforcement of this Act based on reasonable grounds.

Sec 16. Powers of Concemed Regulstory Agencies. —
Notwithstanding the provisions of the preceding section, the exercise of
regulatory powers by different govemment agencies over an industry or a
‘sub-sector of an industry shail be cumulative and shall not be construed in
any way as derogating from the power and authority af the concemed agency.
The government agencies shall cooperate and coordinate with one another in
the exercise of their powers in order fo prevent overlap, to share confidential
information, or for other effective measures.

Sec. 17. Power to investigate and to Enforce Orders and
Resolutions. - The Commission shall conduct preliminary inquiries by
administering oaths, issuing subpoena duces fecum and summoning
witnesses, and commissioning consultants or experts. It shall determine if
any provision of this Act has been violated, enforce its orders and carry out its
resolutions by making use of any available means, provisional or otherwise,
under existing laws and procedures inchxding the power to punish for
‘contempt and to impose fines.


individuals, partnerships, associations, corporations, firms
and other business enterprises;

(© issuance of Subpoena. — To issue subpoena, subpoena
duces tecum and subpoena ad testificandum in all hearings,
inquiries, and proceedings being conducted by the
Commission of any of its Division in the exercise of its
functions, powers and duties under this Act, subject to the
following standards:

i, No subpoena shall be issued to require the production or
disclosure of trade secrets as defined in sub-paragraph
(7) hereof,
ji. A subpoena may be quashed only by means of a motion

duly set for hearing and on the grounds prescribed by
the Rules of Court,
A person appearing before the Commission, or any af its
Divisions, in obedience to a subpoena shall be advised,
before he is required to testify or produce any
documentary or real evidence, of his right to be assisted
or represented by a counsel of his choice, or if he has
none, the Commission shall appoint a de officio counsel
for him; and af his rights to avail of the immunity from
prosecution privilage herein prescribed;

(7) Annual and Special Reports, etc. — To require, by general
or special orders, firms engaged in trade, commerce, or
industry to file with the Commission in such form as the
Commission may prescribe, annual or special reports, or
answers in writing to specific questions, furnishing the
Commission such information as it may require as to the
organization, business, conduct, practices, management
and relation to other persons of the respective natural or
juridical persons or entities filing such reports or answers in
writing except that the Commission shall not require, either
by a specific order or by a subpoena, the disclosure or
Production of trada secrets such as a secret formula,
pattem, device or compilation of information, including
names of customers, which is used in one’s business and
which gives one an opportunity to obtain advantage over
Competitors who do not know or use it. Trade secrets shall
include a plan or process, tool, mechanism, or compound
known only to the owner and his employees to whom it is
necessary to confide it;

(8) Public Disclosure of Information. - To make public, from
time to time, such portions of the information obtained by it
under this Act, except trade secrets and names of
Customers, as it shall deem expedient in the public interest;

(9) Reports and Recommendations to Congress. - To submit
annual and special reports to Congress, including proposed
legislation for the regulation of trade, commerce, or
industry, and provide for the publication of its reports and



matter to a particular Division shall be made by means of a raffle
conducted in public; and

(7) Appea! to the Commission En Banc. - Final orders, resolutions,
judgments, or decisions of a Division may be appealed to the
Commission sitting en banc, by any party adversely affected
thereby, within a period of fifleen (15) days from receipt of such
‘order, resolution, judgment, or decision on all issues of fact and
law. “The Commissioner whose order, resolution, judgment, or
decision is the subject of the appeal is disqualified from
participating, nor shail he be present, in the deliberations and
decision of the Commission en banc. In case of a tie, the
appealed order, resolution, judgment, or decision is deemed
affirmed. The Commission, on its own, or upon mation of a
party who has actively participated in the proceedings, order the
presentation of additional material evidence as part of the
appellate proceedings.

(b) Powers of the Commission Without Hearing. — The Commission
shall have the power to do the following acts, without hearing:

(1) Motu Propio investigation or Upon Complaint. ~ To
investigate, on its own initiative or upon the complaint of
any parson, any and all violations of this Act and other
competition taws prior to the commencement of a
preliminary investigation, or the issuance of a show cause
order, or the institution of a civil or administrative action;

(2) Givit Action. - To attest and file on behalf of the State, all
civil complaints for damages to business or property of the
State, arising from a violation of this Act and other
competition laws;

(3) Administrative Action. - To attest and file all complaints
before the proper administrative bodies or agencies for
appropriate administrative relief from, or against, violations
of this Act or other trade competition laws;

(4) Request for Assistance. — To request any government
agency for assistance and information necessary in the
discharge of its responsibilities under this Act, and examine
if necessary, pertinent records and documents in the
possession of such government agency;

(5) Industry Studies and Company Profie. — To gather and
compile information and investigate from time to time, the
way @ given industry is structured or organized whether as
a monopoly, oligopoly, or competitive; the way the firms
within that industry act, behave, or conduct themselves in
such matters as setting prices, determining output, and the
fesulting performance of the industry as a whole; the
organization, business, conduct, practices and
management of any person, partnership, or corporation
engaged in trade, commerce, or industry and its relation to


{h) Staff. -— The Commission shall appoint, fix the compensation in
accordance with the Revised Compensation and Position
Classification Law, determine the status, qualifications, and duties
of an adequate staff, which shall include an Executive Director of
the Commission. The Executive Director shall be a member of the
Phitippine Bar with at teast ten (10) years experience in the active
practice of law in the Philippines or in the discharge of functions of
an office requiring as an indispensable requisite, admission to the
practice of law in the Philippines, The members of the technical
staff, except those performing purely clerical functions shail
possess at least a Bachelor Degree in the following tines of
specialization: economics, preferably in industrial organization; law,
finance; commerce; accounting; or management.

SEC. 13. Original and Exclusive Jurisdiction. — The Commission
shall have original and exclusive jurisdiction to enforce, implement and
administer the provisions of this Act, its implementing rules and regulations,
and all other competition laws, and in particular:

(a) Powers of the Commission Upon Prior Notice and Hearing. ~ The
Commission may exercise the following powers, only upon prior
notice and hearing:

(Q) Binding Rules - To issue binding rulings;

(2) Show Cause Order and Decision — To issue show cause orders,
and thereafter, render decision thereon; .

(3) Consent Judgment ~ To approve, or
consent judgment,

(4) Preliminary Investigation — To conduct the required preliminary
investigation of all criminal cases involving violations of this Act
and other competition laws in accordance with the procedure
prescribed by the Rules of Court and other laws and rules on the
conduct of preliminary investigations; and thereafter, if
approptiate, to sign, file, and prosecute the proper criminal
information before the Regional Trial Court that has territorial
jurisdiction thereof: Provided, That a civil case filed by the
Commission based in whole of part, upon the same set of facts
and issues as that of a pending criminal proceeding, whether in
the judicial or preliminary investigation stage, shall constitute a
prejudicial question and suspend such criminal proceeding;

(S) Administrative Fines and Penaities — To impose the appropriate
administrative fines or penalties herein authorized to be
imposed;

(6) Delegation of Power Which Require Notice and Hearing. — The
Commission sitting en banc may delegate, on a case to case
basis, its power to hear and decide any case or matter which
require prior notice and hearing, to a Division of one (1)
Commissioner. The resolution of the Commission sitting en
banc making such a delegation shall be made part of the
Tecords of the case of matter and the assignment of a case of

approve, proposals for



House of Representatives a true, accurate, complete, detailed and
swom statement of assets and liabilities, including a statement of
amounts and sources of income, personal and family expenses,
and income taxes paid for the immediately preceding calendar year:
Provided, That the first statement may be filed within the manth of
January next following if the Chairman or the Associate
Commissioner concemed assumes office al any time before the
end of the calendar year.

(d) Prohibition and Disquaifications. - The Commissioners shalt not,
during their tenure, hold any other office of employment. They shall
not, during their tenure, directfy or indirectly practice any profession,
participate in any business, or be financislly interested in any
contract with, or any franchise, or special privileges granted by the
govemment or any subdivision, agency, or instrumentality thereof,
including government-owned and controlled corporations of their
subsidiaries. They shall strictly avoid conflict of interest in the
conduct of their office, they shall not be qualified to run for any
office in the election immediately succeeding their cessation from
office. They shall not be allowed to appear or practice before the
‘Commission for two (2) years following their cessation from office.

No spouse or relative by consanguinity or affinity within the fourth
civil degree and nor former law, business, or professional partner or
associate of any of the Commissioners, the Chairman and the
Secretary of the Commission may appear as counsel or agent on
any matter pending before the Commission or transact business
directly or indirectly therein during his Mer incumbency and within
one (1) year from hisher cessation of office.

(e) Compensation of Commissioners. — The Chairman of the
Commission shall hold the rank of and shall have the privileges and
compensation equivalent to that of a Department Secretary, while
the Associate Commissioners shall each hold the rank of and shall
have the privileges and compensation equivalent to that of a
Department Undersecretary.

(f) Quorum. - Three (3) members of the Commission shall constitute
@ quorum and the affinnative vote of three members (3) shall be
Necessary for the adoption of any rule, ruling, order, resolution,
decision or other acts of the Commission en banc.

(Q) Principat Office, Branch and Venue. — The Commission shall hold
its principal office in Metro Mania but it may, conduct hearings
outside of Metro Manila upon prior notice for inquiries, studies or
any other proceedings required for the proper and efficient exercise
of its power and the discharge of its duties. It may establish branch
offices outside of Metro Manila as may be necessary for the
effective discharge of its functions.



‘amount not less than One hundred thousand pesos (Php 100,000.00) and not
‘exceeding Five million pesos (Php5,000,000.00), if a natural person; and not
less than Five miltion pesos (Php5,000,000.00) and not exceeding Fifty million
pesos (PhpS0,000,000.00) if a firm for each violation of or non-compliance
with an order or notice of the regulatory agency. Ten percent (10%) of such
fines shall accrue to the budget of the regulatory agency for the exclusive use
im the enforcement of this Act.

CHAPTER §
FAIR TRADE COMMISSION

SEC. 12. Fair Trade Commission. — To implement the national policy
and attain the objectives and purposes of this Act, an independent
Commission is hereby creatad, which shall be known as the Fair Trade
Commission, and which shall be organized within sixty (60) days after the
approval of this Act.

For administrative purposes, the Commission shail be under the Office
of the President.

(a) Composition. - The Commission shall be composed of a Chairman
and four {4) Associate Commissioners. The Commissioners shall
be citizens and residents of the Philippines, at least forty (40) years
of age, of good moral character and of recognized probity and
independence. The Chairman and two (2) of the Associate
Commissioners shall be members of the Philippine Bar and the
remaining two (2) shall be of recognized competence in the field of
economics preferably in industial organization economics, or
finance, commerce, accounting or management. They must have
been in the active practice of their professions for at least ten (10)
years, but must not have been candidates for any elective national
or local office in the immediately preceding elections, whether
regular or special.

(b) Term of Office. - The Chairman and the Associate Commissioners
shail be appointed by the President of the Philippines. The term of
office af the Chairman and the Associate Commissioners shall be
‘six (6} years without reappointment. The Chairman shall hold office
for six years and of the first four (4) Associate Commissioners, two
(2) shail hold office for a term of four (4) years and two (2) for a
term of two (2) years, In case a vacancy occurs before the
expiration of the term of office, the appointment to such vacancy
‘shail be only for the unexpired term of the predecessor.

() Statement of Assets and Liabilities. - The Chairman and the
Associate Commissioners shall, upon assumption of office and
~ within the month of January of every years thereafter, as well as
upon the expiration of their respective terms of office, or upon their
resignation or separation from office, file with the Office of the
President, the President of the Senate and the Speaker of the


(©) Transactions which require the approval of a specialized
agency which regulates the particular industry,

(7) Acquisitions, solely for the purpose of investment, of voting
secutities, if as a result of such acquisition the securities
acquired oF held do not exceed ten parcent (10%) of the
outstanding voting sacurities of the issuer,

(8) Acquisitions of voting securities pursuant to the preemptive
Tights of the acquiring fim; or, if, as a result of such
acquisition, the voting securities acquired do not increase,
directly or indirectly, the acquiring finn’s per centum share
of outstanding voting securities of the issuers; or

(9) Such other acquisitions, transfers, of transactions which the
Commission may declare as are not likely to violate the
provisions of this Act of any other proper and applicable
law.

(d) Mergers and Acquisitions in Regulated Industries. ~ Nothing
contained in this Section shall apply to mergers, consolidations, and
stock or asset acquisitions duly approved by the specialized
government agency that, by law, is duly empowered to regulate a
Specific sector of the economy such as, but not limited to, the
Bangko Sentral ng Pilipinas in respect of banks and other financial
institutions, the Insurance Commission in respect of insurance
companies, the National Telecommunications. Commission in
fespect of telecommunications companies, the Land Transportation
Franchising and Regulatory Board in respect of public land
transportation and the Civil Aeronautics Board in respect of air
transportation. The exemption herein prescribed shall not apply to
the approval of a merger or consolidation by the Securities and
Exchange Commission in the exercise of its general regulatory
Powers over corporations.

CHAPTER 4
FINES AND PENALTIES

SEC. 10. Penalties. — Without prejudice to the violation of other laws,
any firm that ehail be found to have violated Sections 5, 6, 7, 8 and 9 of this
Act, or any combination’ thereof, shall, for each and every violation, be
Punished by a fine of not less than Ten milion pesos (Php10,000,000.00) and
Not exceeding Fifty million pesos (Php50,000,000.00) if a natural person; by a
fine of not tess than Two hundred fifty million pesos (Php250,000,000.00) but
not exceeding Seven hundred fifty million pesos {Php750,000,000.00) if a
firm, and by imprisonment not exceeding ten (10) years, or both, at the
discretion of the court. In the altamative, a fine shall be imposed in the

amount double the gross proceeds gained by the violator or double the gross
loss suffered by the plaintiffs.

SEC. 11. {Imposition of Fines by Rogulatory Agency. —
Notwithstanding any provisions of law, regulatory agencies shall, in the
Conduct of their functions or duties, have the power to impose fines in the


using the same by voting or otherwise to bring about, or in
attempting to bring about, the substantial lessening of
competition;

(2) A corporation from causing the formation of subsidiary
corporations, or form owning and holding all or part of the
stock of such subsidiary corporations, for the actual carrying
on of their immediate lawful business, or the natural and
legitimate branches or extensions thereof, and

(3) A firm from continuing to own and hold the stock or other
share capital or assets of another corporation which its
acquire prior to the approval of this Act.

(b) Notification Prior to Stock or Asset Acquisition. - No firm shall
acquire, directly or indirectly, the shares of stock or assets of any
other firm, if as a result of the acquisition, the acquiring firm would
own fifteen percent (15%) or more of the shares of stock or assets
of the acquired firm, unless, the acquiring and selling firm notify,
prior to the conclusion of the agreement for such acquisition and in
the prescribed form, the Commission of such proposed acquisition.
Only the acquiring firm is raquired to make the notification in a
tender offer. The contemplated acquisition shall be deemed
approved, unless the Commission, within thirty (30) calendar days
from receipt of the notification, orders the acquiring firm to show
cause why the proposed acquisition shail not be declared as
prohibited under this Act or any other competition law. The show
cause order shall set forth the facts upon which it is based. The
acquiring or selling firm may contest the show cause order, in which
case, the proposed acquisition shall be considered enjoined until
the Commission shall have rendered a decision on the proposed
acquisition after due notice and hearing, in accordance with the
procedure prescribed herein for the disposition of a show cause
order.

(c) Transactions Exempt from Prior Notice Requirement, — The
following classes of transactions are exempt from the prior notice
requirement under this Section:

(1) Acquisition of goods or realty transferred in the ordinary
course of business;

(2) Acquisitions of bonds, mortgages, deeds of trust, or other
obligations which are not voting securities;

(3) Acquisitions of voting securities of an issuer at least fifty
percent (50%) of the voting securities of which are owned
by the acquiring firm prior to such acquisition;

(4) Transfers to, of from, government agencies or
instrumentalites, including goverment-owned or controlled
corporations:

(5) Transactions exempted from the provisions of this Act and
other proper and applicable laws;


or render unlawful permissible franchising, licensing or exclusive
distributorship agreements.

{) Tie-in Arrangements — Any agreement making the supply of
particular goods dependent upon the purchase or tease of other
goods from the supplier or his consignee, where the purpose and
effect of such sale or lease or such condition is to substantially
lessen competition or to create a monopoly or cartel.

) Boycott - Any concerted refusal to sell or conspiracy not to sell or to
stop doing business on the part of the suppliers of any goods,
unless for a lagitimate purpose, such as, but not limited to:

(1), Defaulting Borrowers — refusal by one of more credit institutions
to extend loans to defaulting debtors;

(2) Defaulting Buyers — refusal by one or more manufacturers or
sellers to sell on credit to defaulting customers; and

(3) Violators of intellectual Property Rights — refusal by
manufacturers or sellers to have any commercial dealings with
one or more firms who violate the intellectual property rights of
the owners of patents, copyrights, trademarks and other
intellectual property,

Sec. 8. Other Unfair Competition Practices. — The following acts
‘shall be unlawful acts of unfair competition and shall be punishable under this
Act:

(a) Distribution of false or misleading information which is capable of
harming the business interests of another firm;

(b) Distribution . of false or misleading information to consumers,
including the distribution of information lacking a reasonable basis
related to price, character, method or place of production,
proparties, suitability for use, or af quality goods; and

(c) Unauthorized receipt, use, or dissemination of confidential scientific,
technical, production, business or trade information,

SEC. 9. Merger, Consotidation, or Asset Acquisition. ~ No firm
engaged in commerce or trade shall acquire, directly or indirectly, the whole
or any part of the stock or other share capital, or the whole or any part of the
assets, of one or more firms engaged in any line af commerce or trade where
‘the effect of such acquisition of such stocks, share capital, or assets, or of the
use of such stock by voting or granting of proxies or otherwise maybe to
substantially lessen competition, o tand to create a monopoly,

(a) Permissible Stock or Asset Acquisition or Ownership. - Nothing
contained herein, however, shall be construed to prohibit:

(1) A firm from purchasing the stock or ather share capital of
one or more Corporations solely for investment and not


agreements such as, but nat limited to, any of the following, shall be deemed
to fall under the crime of abuse of monopoly power or market power by one in
dominant position:

(a) Predatory Behavior Towards Competitors - Any agreement,
including, but not limited to, seling goods at a vary low price with
the intent of driving competitors out of the market, or creating
barriers to entry;

(b) Price Fixing — Any agreement among competitors to raise,
suppress, fix or otherwise maintain the price at which their goods
and services are sold such as, but not limited to, establishing or
adhering to price discounts, holding prices firmly, eliminating or
reducing discounts, adopting a standard or formula for computing
prices, maintaining certain price differentials between different
types, sizes or quantities of products, adhering ta a minimum fee or
schedule and other analogous schemes with the purpose and effect
of creating a monopoly or cartet or lessening competition.

(c) Bid Rigging - Any agreament to fix price at auctions of in any other
form of bidding, with the purpose and effect of creating a monopoly
or cartel, or lessening competition such as, but not limited, to cover
bidding, bid suppression, bid rotation and market allocation and
other analogous practices of bid manipulation.

in determining whether there is price fixing or bid rigging, the following
circumstances may be considered:

+ (1) generally, any considered evidence that two seliers of similar
goods have agreed to set the price of their goods, to séll only a
certain amount of their goods, or to sell only to a timited number
of buyers or consumers;

(2) a drastic change in prices of goods and services involving more
than one seller of similar goods of different brands, particularty if
the changes in prices take place in equal amount and about the
same time;

(3)a seller refusing to sell based on an agreement with a
competitor;

(@) the same firm has repeatedly been the low bidder who has been
awarded contracts for a certain service or a particular bidder
seems to win bids on a fixed-rotation;

(6) there is an unusual and unexplainable difference between the
winning bid and all other bids; and

(6) the same bidder bids substantially higher on some bids than on

others, and there is no logical cost reason to explain the
differance.

(a) Limitation and Control of Markets — Any agreement to limit or
control production, markets, technical development, or investment


Restrictive agreements resulting from carteltike behavior of firms, in
any form, are hereby per se deemed illegal. These shall include, but not
limited to, the following:

(a) Agreements to fix selling price of goods ar other terms of sale;
(b) Agreements to limit supply or output,

{c} Agreements to divide the market, whether by volume of sales or
purchase or by territory, by type of goods sold, by customers or
sellers, or by any other means;

(d) Agreements to exclude or limit dealings with particular suppliers or
sellers from supplying or selling goods, or customers from acquiring
or buying goods;

(@) Agreements applying dissimilar conditions to equivalent
transactions with other parties, thereby placing them at a
competitive disadvantage; and

(f) Agreements making the transactions in particular goads dependent
upon other conditions which have no connection with the subject of
the transaction.

There shall be a prima facie case for the existence of a cartel if and
when the Department of Trade and Industry (DTI) or concemed regulatory
agency finds that two or more persons or firms that are ostensibly competing
for the same relevant market and actually perform uniform or complementary
acts among themselves which tend to bring about artificial and unreasonable
increase, decrease or fixing in the price of any goods or when they
‘simultaneously and unreasonably increase, decrease or fix the prices of their
seemingly competing goods thereby lessening competition in the relevant
market among themselves.

SEC. 6. Monopolization. — It shall be unlawful for any firm to wilffully or
knowingly acquire and maintain its market power by exciuding competitors
from any part of trade, industry or commerce as distinguished from natural
growth or development of a firm as a consequence of a superior product,
business acumen or historic accident Provided, That, a firm that has at least
fifty percent (50%) of the relevant market, or firms up to three (3) in number
has at least seventy percent (70%) of the refevant market, as found and
certified by the DTI or the concemed regulatory agency shall be deemed a
monopoly or in a dominant position.

Sec. 7. Abuse of Monopoly Power or Dominant Position. ~ It shall
be unlawful for ons or more firms with monopoly power or in dominant
position within relevant markets to abuse their dominant position, by engaging
in unfair methods of competition, or in unfair or deceptive trade practices, or
entering into combinations in the form of trust or otherwise, or conspiracy, with
the purpose and effect to prevent, restrict, or distort competition. Abusive


(f “Firms” shall include any person, natural or juridical, partnership,
combination or association in any form, whether incorporated or
not, domestic or foreign, including those owned or controlled by the
government, engaged directly or indirectly in any economic activity:
Provided, That, two fims, one of which is controlled by the other,
shall be treated as one firm: Provided, further, That two or more
firms that are controlled by a single firm shail be treated as one firm;

(g) “Goods” shall inctude all types of goods and property, tangible and
intangible, and services;

(h) "Market" shall refer to a place or venue for commercial activity,
which may extend beyond the borders of the Republic of the
Philippines, where articles are bought or sold, It shall also refer to
the geographical or economic extent of commercial demand;

@

“Monopoly” shall mean a privilege or undue advantage of one or
more firms, consisting in the exclusive right to carry on a particular
business or trade, and/or manufacture a particular product, article
‘of object of trade, commerce or industry. It is a form of market
structure in which one or only a few firms dominate the total sales of
a product or service;

0

“Monopoly Power" or “Dominant Position” shall refer to a situation
where a firm, either by itsef or acting in collusion with other firms, is
in a position to contro! a relevant market for the sale of a particular
good or service by fixing its prices, excluding competitor firm, or
controlling the market in a specific geographical are:

{k) "Relevant Market’ shall refer to the line of commerce in which
competition has been restrained. It shall also refer to the
geographic area involved, including all reasonably substitutable
goods, and all nearby competitors, to which consumers could tum if
the restraint or abuse results in the significant increase in prices,

CHAPTER 3.
PROHIBITED ACTS

SEC. 5. Carfelization, - tt shall be unlawful for firms providing goods in
relevant markets to join together to monopolize, or to control production in a
particular industry or commodity, the sale and price of such good, and to
agree fo restrict trade for their mutual benefit, which may or may not be on an
intemational scale. This shall also include an association by agreement of
firms or sections of firms having common interests designed to promote the
interchange of knowledge resulting from scientific and technical researches,
exchange of patent rights and standardization of products among themselves
with the intent of preventing, restricting or distorting competition.


SCOPE AND APPLICATION, DEFINITION OF TERMS

SEc. 3. Scope and Application. — This Act shall be enforceable within
the tertitory of the Republic of the Philippines and shall apply to all areas of
trade, industry and commercial economic activity. It shall likewise be
applicable to Intemational trade having direct, substantial and reasonably
foreseeable effects in trade, industry or commerce in the Republic of the
Philippinas including those that result from acts done outside the Republic of
the Philippines.

‘The Act shall apply to: (a) all firms as defined hereunder and all their
commercial agreements, actions or transactions involving goods, services or
intelectual property; and, (b) all natural persons who, acting in their capacity
a8 owner, manager or employee of a firm, shall authorize, engage or aid in
the commission of restrictive practices prohibited under this Act.

This Act shall apply neither to the combinations or activities of workers
or employaes nor to agreements or arrangements with their employers when
such combinations, activities, agreaments, or arrangements are designed
solely to facilitate collective bargaining in respect of conditions of
employment.

Sec. 4. Definition of Terms. — As used in this Act, the following terms
shall be defined as:

(a) “Agreements” shall refer to any type or form of arrangement,
understanding, undertaking or concerted action, whether formal or
informal, written or oral;

(b) “Cartel” shall mean a combination of firms, providing goods in
felevant markets, acting or joined together to obtain a shared
monopoly to controt production, sale and price, or to obtain controt
in any particular industry or commodity, or a group of firms that
agree to restrict trade to their mutual benefit, which may or may not
be of an intemational scale. It shall also refer to firms or section of
firms having common interest designed to promote the exchange of
knowledge resulting from scientific and technical research,
exchange of patent rights and standardization of products among
themselves with the intent of preventing, restricting or distorting
competition;

(c) “Commission* shall mean the Fair Trade Commission created under
this Act;

(d) ‘Competition’ shall mean the process by which economic agents,
acting independenty in a market, limit each other's ability to controt
the prevailing conditions in the market;

{e) Control” shail refer to at least twenty percent (20%) ownership,
Girectty or indirectly, of a firm or a group of finns by another firm;


fy

FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES —}
FIRST REGULAR SESSION )

HOUSE OF REPRESENTATIVES

introduced by Representative Rufus 8. Rodriguez and
Representative Maximo B, Rodriquez, Jr.

1980

House Bill No._

AN ACT
PENALIZING UNFAIR TRADE AND ANTI-COMPETITIVE PRACTICES IN
RESTRAINT OF TRADE, UNFAIR COMPETITION, ABUSE OF DOMINANT
STRENGTHENING THE POWERS OF REGULATORY
AUTHORITIES, ESTABLISHING THE FAIR TRADE COMMISSION AND
APPROPRIATING FUNDS THEREFOR, AND FOR OTHER PURPOSES

Be it enacted by the Senate and the House of Representatives of the
Philippines in Congress assembled:

CHAPTER 1
TITLE AND DECLARATION OF POLICY

SECTION 1. Title, - This Act shall be known and cited
“Competition Act of 2010.

the

Sec. 2. Declaration of Policy. - Pursuant to the constitutional
mandate that the State shall regulate or prohibit monopolies when the public
interest so requires and that no combinations in restraint of trade or unfair
competition shall be allowed, the State shall:

(a) promote and enhance economic efficiency and free and full
competition in trade, industry and all commercial economic
activities;

{b) prevent the concentration of economic power in a few persons who
threaten to control the production, trade, or industry in order to
unduly stifle competition, distort, manipulate or constrict the
discipline of free markets, increase market prices in the Philippines;
and

{c) penalize all forms of unfair trade, anti-competitive conduct and
combinations in restraint of trade, with the objective of protecting
consumer welfare and advancing domestic and intemational trade
and economic development.

CHAPTER 2


With this bill, it is believed that unfair competitions, monopolies and
carlels shall be properly regulated if not totally eradicated which will uttimately
protect the consumers from abuses of market powers.

In view of the foregoing, approval of this bill is highly and eamestly
recommended.

RUFUS B. Ri EZ

Ul

MAXIMO B. RODRIGUEZ, JR.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
‘Quezon City

FIFTEENTH CONGRESS
First Regalar Session

House BillNo. 3100

Introduced by Rep. Albert S. Garci

x

EXPLANATORY NOTE

The Constitution, Article XII, Section 19, provides:

“Section 19. The State shall regulate or prohibit monopolies when the public interest so
‘requires. No combinations im restraint of trade or unfair competition shall be allowed.”

‘The Constitution provides further:

"Section 22. Acts which circumvent or negate any of the provisions of this Article shall
be considered inimical to the national intrest and subject to criminal and civil sanctions, as may
bbe provided by law,"

No less than the Constitution itself mandates the government to cegulate or prohibit
monopolies. Protection against price manipulators is an effective way by which the government
can provide people better access to various goods and commodities in the market. By providing
am equal playing field in the business sector, consumers will have an improved access to
affordable and at the same time quality goods.

The Philippine business sector bas time and again witnessed how artificial prices in one
or two commodities resulted in the increased prices of primary goods,

This bill aims to regulate trade manipulations and other forms of activities which restrain
free market competition,
_—

2

S/GARCIA


Republic of the Philippines»
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

House Bill N 3100

Introduced by Rep. Albert S. Garcia

AN ACT
PENALIZING UNFAIR TRADE AND ANTI-COMPETITIVE PRACTICES IN
RESTRAINT OF TRADE, UNFAIR COMPETITION, ABUSE OF DOMINANT POWER,
STRENGTHENING THE POWERS OF REGULATORY AUTHORITIES AND
APPROPRIATING FUNDS THEREFOR, AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

CHAPTER 1
TITLE AND DECLARATION OF POLICY

SECTION 1. Title. - This Act shall be known and called the "Competition Act of 2010."

SECTION 2. Declaration of Policy. - Pursuant to the constitutional mandate that the
State shall regulate or prohibit monopolies when the public interest so requires and that no
combinations in restraint of trade or unfair competition shall be allowed, the State shall:

{@) promote and enhance economic efficiency and free and full competition in trade,
industry and all commereial economic activities;

(®) preyent the concentration of economic power in pérsons who threaten to control the
production, trade, or industry in order to stifle competition, distort, manipulate or constrict the
discipline of free markets, increase market prices in the Philippines; and

{©} penalize all forms of unfair trade, anti-competitive conduct and combinations in
Testraint of trade, with the objective of protecting and advancing consumer welfare.

CHAPTER 2
SCOPE AND APPLICATION, DEFINITION OF TERMS

SECTION 3. Scope and Application - This Act shall be enforceable within the territory
of the Republic of the Philippines and shall apply to all areas of trade, industry and commercial
‘economic activity. It shall likewise be applicable to international trade having direct, substantial
and reasonably forseeable effects in trade, industry or commerce in the Republic of the
Philippines including those that result from acts done outside the Republic of the Philippines.



CHAPTER 2
SCOPE AND APPLICATION, DEFINITION OF TERMS

SECTION 3. Scope and Application, - This Act shall be enforceable within the territory
of the Republic of the Philippines and shall apply to all areas of trade, industry and commercial
economic activity. It shall likewise be applicable to international trade having direct, substantial
and reasonably forseeable effects in trade, industry or commerce in the Republic of the
Philippines including those that result from acts done outside the Republic of the Philippines.

x

‘The Act shall apply to:

(@) all firms as defined in this Act and all their commercial agreements, actions or
transactions involving goods, services or intellectual property; and,

(b) all natural persons who, acting in their capacity as owner, manager or employee of a
firm, shall authorize, engage or aid in the commission of restrictive practices prohibited under
this Act,

SECTION. 4. Definition of Terms. - As used in this Act, the following terms shall be
defined as:

(8) AGREEMENTS shall cefer to aay type or form of arrangement, understandiag,
undertaking ot concerted action, whether formal or informal, written or oral;

(b) CARTEL shall mean combination of fiers, providing goods in relevant markets,
acting or joined together to obtain a shared monopoly to control production, sale and price, or to
obtain control jn any particular industry or commodity, or a gtoup of firms that agree to restrict
trade to their mutual benefit, which may or may not be of an international scale. It shall also refer
to firms or sections of firms having common interest designed to promote the exchange of
knowledge resulting from scientific and technical research, exchange of patent rights and
standardization of products among themselves with the intent of preventing, restricting or
distorting competition;

(©) COMPETITION shal! mean the process by which economic agents, acting
independently in a market, limit each other's ability to control the prevailing conditions in the
market;

(4) CONTROL shall refer to at least twenty percent (20%) ownership, directly or
indirectly, of a firm or a group of firms by another firm;


(©) FIRMS shall include any person, aatural or juridical, parmership, combination or
association in any form, whether incorporated or not, domestis or foreign, including those owned
Gr contol by the govemment, engaged directly or indinctly in any economic activity:
Pravided, That, two firms, one of which is controlled by the other, shail be treated as one firm:
Provided. further, Toat two or wore firms that are controlled by a single fim shall be treated ne
one firm;

(© GOODS shall include all types of goods and services;
.
(® MARKET shall refer to a place or venue for commercial activity, which may extend
beyond the borders of the Republic of the Philippines, where articles are bought or sold. It shall
‘lso refer to the geographical or economic extent of commercial demand;

© MONOPOLY shall mean a privilege or undue advantage of one or more finns,
‘Sonsisting in the exclusive right to carty on a particular business or trade, and/or manufacture «
Particular product, article or object of ade, commerce or industry. It is a foam of market
structure in which one or only a few firms dominate the total sales of a product or service:

() MONOPOLY POWER OR DOMINANT POSITION shall refer to a situation where
2 firm, either by itself or acting in cotlusion with other finms, is in a position to control a relevane
market for the sale of a particular good or service by fixing its prices, excluding competitor firm,
or controllitg the market in a specific geographical area; and

@ RELEVANT MARKET shall refer to the tine of commerce in which competition has
been restrained. It shall also refer to the geographic area involved, including all reasonably
substitutable goods, and all nearby competitors, to which consumers could tum ifthe restraint ot
abuse results in the significant increase in prices, :

CHAPTER 3
PROHIBITED ACTS

SECTION 5. Cartel - It shall be unlawful for firms providing goods in relevant markets
to join together to monopolize, or to control production in a particular industry or commodity,
the sale and price of such good, and to agree to restrict trade for their mutual benefit, which may
oF may not be on an international scale. This shall also includé an association by agreement of
firms or sections of firms having common interests designed to promote the interchange of
Knowledge resulting from scientific and technical researches, exchange of patent rights and
Standardization of products among themselves with the intent of preventing, restricting or
distorting competition.


1 Activities constituting cartel — Activities considered as constituting cartel include,
‘but are not Limited to the following:

(a) Agreements to fix selling price of goods or other terms of sale;
() Agreements to limit supply or output;

(©) Agreements to divide the market, whether by volume of sales or purchase or by
territory, by type of goods sold, by customers of sellers, or by any other means;

(d) Agreements to exciade or limit dealings with particular suppliers or sellers Gom
supplying or selling goods, or customers from acquiring or buying goods;

(©) Agreements applying dissimilar conditions to equivalent transactions with other
parties, thereby placing them at a competitive disadvantage; and

(© Agreements making the wansactions in particular goods dependent upon other
conditions which have no connection with the subject of the transaction,

I. Prima facie evidence of cartel - There shall be a Prima facie case for the
existence of a cartel if and when the Department of Trade and Industry (DTI) or
concemed regulatory agency finds that two or more persons of firms that are
‘estensibly competing for the same relevant market and actually perform uniform
or complementary acts among themselves which tend to bring about artificial and

» Unreasonable increase, decrease or fixing in the price of any goods or when they
simultaneously and unreasonably increase, decrease or fix the prices of their
seemingly competing goods thereby lessening competition in the relevant market
among themselves.

SECTION 6. Monopolization. - tt shall be unlawful for any firm to willfully or
knowingly acquire and maintain its market power by excluding competitors from any part of
‘wade, industry or commerce as distinguished from natural growth or development of a firm as a
‘consequence of a superior product, business acumen or historit accident: Provided, That, a firm
‘that has at least fifty percent (50%) of the relevant market, or firms up to three (3) in qumber has
at least seventy percent (70%) of the relevant market, as found and certified by the Department
of Trade and Industry or the concemed regulatory agency shall be deemed a monopoly or in a
dominant position.


SECTION 7. Abuse of Monopoly Power or Dominant Position. -It shall be unlawful for
one or more firms with monopoty power or in dominant position within relevant markets to
abuse their dominant position, by engaging in unfair methods of competition, or in unfair or
deceptive trade practices, or entering into combinations in the form of trust or otherwise, or
conspiracy, with the purpose and effect to prevent, restrict, or distort competition.

Abusive agreements such as, but not limited to, any of the following, shalt be deemed to
fall under the crise of abuse of monopoly power or market power by one in dominant position:

(a) Predatory Behavior Towards Competitors - Any agroement, including, but not limited
to, selling goods at @ very low price with the intent of dri ing competitors out of the market, or
creating barriers to entry;

(b) Price Fixing - Any agreement among competitors to raise, suppress, fix or otherwise
‘maintain the price at which their goods and services are sold such as, but not limited to,
tstablishing or adhering to price discomuts, holding prices firmly, eliminating or reducing
discounts, adopting a standard or formula for computing prices, maintaining certain Price
differentials between different types, sizes or quantities of products, adhering to @ minimum fee
or schedule and other analogous schemes with the purpose and effect of creating a monopoly or
cartel or lessening competition.

(©) Bid Rigging - Any agreement to fix price at auctions or in any otber form of bidding,
with the purpose and effect of creating a monopoly or cartel, o¢ lessening competition such as,
bur not limited, to cover bidding, bid suppression, bid rotation and market allocation and other
analogous practices of bid manipulation.

In determining whether there is price fixing or bid cigging, the following circumstances
may be considered:

(1) generally, any considered evidence that two sellers of similar goods have
agreed to set the price of their goods, 10 sell only a certain amount of their goods, or to
sell only to a limited number of buyers or consumers;

(2) a drastic change in prices of goods and services involving more than one seller
of similar goods of differeat brands, particularly if the changes in prices take place in
‘equal amount and about the same time; .

(3) a seiler refusing to sell based on an agreement with a competitor,


(4) the same firm has repeatedly been the low bidder who has been awarded
contracts for a certain service or a particular bidder seems to win bids on a fixed-rotation;

GS) there is an unusual and unexpiainable difference between the winning bid and
all other bids; and

(6) the same bidder bids substantially higher on some bids than on others, and

‘there is no logical cost reason to explain the difference,
s

(2) Limitation and Control of Markets - Any agreement to limit or control production,
markets, technical development, or investment with the purpose and effect of creating a
monopoly or cartel, or lessening competition

(€) Market Allocation - Any agreement to divide the market, whether by volume of sales
or purchase or by territory, by type of goods sold, by customers or sellers or by any other means,
with the purpose and effect of creating a monopoly or cartel, or lessening competition.

* @ Arrangements to Share Markets or Sources of Supply - Any agreement to share
markets or sources of supply of raw materials, with the purpose and effect of creating a
monopoly or cartel, or lessening competition.

(8) Prive Discrimination - Any agreement prescribing or charging, directly or indirectly,
discriminatory pricing terms or conditions in the supply or purchase of goods of like grade and
uulity with the purpose and effect of creating a monopoly or cartel, or substantially lessening
‘competition; Provided, That nothing contained herein shall be, construed to prohibit permissible
ptice differentials unless the same shall have the effect of preventing, restricting or distorting
competition: Provided further, That for the Purpose of this section, the following shall be
considered permissible price differentials:

(1) Socialized Pricing - Socialized pricing for the iess fortunate sector of the
economy;

(2) Volume Discounts - Price differentials which reflect an allowance for
differences in the cost of manufacture, sale, or delivery resulting from differing methods
‘or quantities in which the goods are sold or delivered to the purchasers;

3) Competitive Pricing - A price differential or other terms of sale in response to
the competitive price of payments, services or facilities furnished by a competitor,


(4) Bonafide Selection of Customers - The selection of customers on bona fide
transaction; and .

(5) Price Differentials Due to Changing Market Conditions or Marketability of

Goods ~ Price changes from time to time in response to changing conditions affecting the

market or the marketability of the goods concemed such as, but not limited to, actual or

imminent deterioration of perishable goods, obsolescence of seasonal goods, distress
sales under court process, or sale on good faith in discontinuance of business.
‘

() Exclusivity Arrangement - Any agreement imposing restrictions on the lease or
contract for sale or trade of goods conceming where, to whom, or in what forms goods may be
sold or traded, such as, but not limited to, fixing prices, or giving preferential discounts, or rebate
‘upon such price, or imposing conditions not to deal with competing firms, where the purpose of
such agreement is to lessen competition: Provided, That nothing contained herein shall prohibit
‘or render unlawful permissible franchising, licensing or exclusive distributorship agreements.

i) Tie-In Arrangements - Any agreement making the supply of particular goods
dependent upon the purchase or lease of other goods fiom thé supplier or his consignee, where
the purpose and effect of such sale or lease or such condition is to substantially lessen
competition or to create 1 monopoly or cartel.

@ Boycott - Any concerted refusal to sell or conspiracy not to sell or to stop doing
business onthe part of the suppliers of any goods, unless for a legitimate purpose, such as, but
not limited to:

(0 Defaulting Borrowers - refusal by one or more credit institutions to extend
toans to defaulting debtors;

(2) Defaulting Buyers - refusal by one or more manufacturers or sellers to sell on
credit to defaulting customers; and

(3) Violators of Intellectual Property Rights - refusal by manufacturers or sellers
to have any commercial dealings with one or more firms who violate the intellectual
Property tights of the owners of patents, copyrights, trademarks and other intellectual
Property.

SECTION 8. Other Unfair Competition Activities. - The following acts shall be unlawful
‘acts of unfair competition and shall be punishable under this Act:


() Distribution of false or misleading information which is capable of harming the
business interests of another firm;

©) Distribution of false or misleading information to consumers, including the
distribution of information Jacking a reasonable basis related to price, character, method or place
of production, properties, suitability for use, or of quality goods; and

(©) Unauthorized receipt, use, or dissemination of confidential scientific, technical,
cy
production, business or wade information.

CHAPTER 4
FINES AND PENALTIES

SECTION 9. Penalties. - Without Prejudice to the violation of other laws, any firm that
shall be food to have violated Sections 5, 6, 7 and 8 of this Act, or aay combination thereof,
shall, for each and every violation, be punished by a fine of not less than Five Million pesos (Php
$.000,000.00) and not exceeding Twenty-Five Million pesos (Php25,000,000.00) if a natural
person; by a fine of not less than One Hundred Million pesos (Php100,000,000.00) but not
exceeding Two Hundred Fifty Million pesos (Php250,000,000.00) if a firm, and by
‘imprisonment not exceeding ten (10) years, or both, at the discretion of the court

CHAPTER 5
ENFORCEMENT

SECTION 10. Preliminary Inquiry. - The Department of Justice (DOD), in coordination
with the Departirent of Trade and industry (DTI), other regulatory and/or appropriate
government agency, shall motu propio, upon the filing of a verified complaint by an interested
Party or upon teferral by the concerned regulatory agency, initiate a preliminary inquiry for the
enforcement of this Act based on reasonable grounds

SECTION 11. Power to Investigate and Enforce Orders and Resolutions. - The DOJ
shall conduct preliminary inquiries by administering oaths, issuing subpoena duces tecum and
summoning witnesses, and commissioning consultants or experts, It shall determine if any
Provision of this Act has boen violated, enforce its orders and carry out its resolutions by making
use of any available means, provisional or otherwise, under existing laws and procedures
including the power to punish for contempt and to impose fines.


SECTION 12. Seif-incrimination and Exclusionary Rules, - Pursuant to the preceding
section, a person subject of any pretiminary inquiry or investigation by the DOJ shalt produce the
specified document or information when so required by written notice: Provided, That no person
shall be excused from disclosing any document or information (o the inquiring officer on the
ground that the disclosure of the information or document may be incriminating: Provided,
further, That such document or information produced by the person subject of investigation shall
not be admissible as evidence against him in criminal proceedings: Provided, finally, That such
document or information shall be admissible in evidence in civil proceedings including those
arising from or in connection to the implementation of this Act.

Nothing in this section shall compel the disclosure of privileged communication:
Provided, That the person who refuses to disclose the information or produce the document or
other material required by the inquiring officer in relation to the preliminary inquiry being
conducted shall nevertheless be obliged to give the name and address of the firm to whom, or by
‘whom, or on whose behalf, such privileged communication was made.

Any document or information submitted by firms, as determined and marked confidential
by the DOJ, relevant to any investigation being conducted pursuant to this Act shall not, in any
manner, be directly or indirectly disclosed, published, transferred, copied, or disseminated.

SECTION 13. Jmmmity From Suit. - Any person or firm which cooperates or furnishes
any information, document or data to the DOS before ot during the conduct of the preliminary
inquiry that constitutes material evidence as determined by the DOJ under this Act shall be
immune from ‘any suit or charge including from affected parties and thied parties: Provided,
further, That any person ot firm which cooperates or furnishes information, document or data to
the DOJ in connection to an investigation being conducted shal} not be subjected to any form of
reprisat or discrimination: Provided, furthermore, That such reprisal or discrimination shall be
considered a violation of this Act.

Nothing in this section shall preclude prosecution for persons and firms who reported to
the DOJ with malicions information, data and falsified documents which is damaging to the
business and integrity of the persons and firms under inquiry. Such act shal! likewise be
considered as an unfair trade practice punishable under this Act.

SECTION 14. Termination of Preliminary inquiry. - The DOJ, after considering the
statements made, or documents or articles produced, in the course of an inquiry conducted by it,
shall termninate the preliminary inquiry by issuing a resolution ordering its closure if ao violation
or infringement of this Act is found; or by issuing a nolo contendere resolution; or issuing a
resolution to, singly or cumulatively, (a) impose penalties in the range provided under Section 9


hereof, (b) order sanctions which may be imposed by the regulatory and/or appropriate
government agency; (c) order the rectification of certain acis or omissions; or (4) order the
restitution to the affected panties.

When determined by the facts and circumstances, the I)OJ shall institute a civil action by
class suit in the name of the Republic of the Phitippines, as parens patriae, on behalf of persons
residing in the Philippines, to secure treble damages for any injury sustained by such persons by
reason of any violation ofthis Act, pls the cost of sit and reasonabie attomey's fee.

If the evidence so warrants, the DOS shall institute criminal cases for violation of this Act
or relevant laws: Provided, That, for criminal prosecution of violations of this Act, 00
preliminary investigation shall be required, neither shall a petition for review be made: Provided,
further. That any appeal shall be instituted to a division of the Court of Appeats exclusively
handling competition and consumer protection laws.

SECTION 15. Nolo Contendere Resolution. - Any fitm under inquiry under the
provisions of this Act may submit to a nolo contendere resolution at any time before the
termination of the preliminary inquiry by: a) the payment of an amount within the range of
penalties provided for under Section 9; b) by entering inlo an undertaking to effectively stop and
rectify the acts complained against, make restitution to the affected parties, whether or not the
parties are plaintiffs or witnesses; and, c) by submitting regular compliance reports as may be
directed: Provided, That a nolo contendere resolution shall not bat any inquiry for the same or
similar acts if continued or repeated.

SECTION 16. Independent Civil Action - Regardless of the status or pendency of any
proceedings, any firm that suffers injury by reason of any violation of this Act may institute a
separate and independent civil action, irrespective of the amount involved in the controversy
against the defendant or defendants and shall recover treble damages sustained, the costs of suit
and reasonable attomey's fies: Provided however, That no filing fees shall be collected:
Provided, further, That filing fees shall constitute a first lien in the award of damages.

SECTION 17. Effect of Final Judgement. - Any final judgment in a civil or criminal
‘action brought by the DOJ on behalf of the people of the Philippines under this Act to the effect
that a defendant has vioiated any or all of the provisions of this Act shall be res judicata as to
‘any claim by any person on whose behalf such action was brought: Provided, That such person
Aotifies the court having jurisdiction of the case within the period given by the court: Provided,
further, That such period shall not be less than ninety (90) days.


Ut shall be prima facie evidence against such defendant in any civil action brought by any
other party against such defendant under this Act as to all matters respecting which said
judgment would be an estoppel as between the pasties concemed.

SECTION 18. Distrioution of Damages Recovered. - The damages recovered in a civil
action under Section 15 of this Act shall be distributed in the following manner: (1) as
determined and to be authorized by the Court having jurisdiction of the case; (2) ten percent
(10%) of the total amount of damages shall accrue to the DOJ and/ot regulatory agency to be
used exclusively in the enforcement of this Act; and, (3) the remailder of which total amount of
damages shall be deemed a civil penalty by the Court and shall be deposited to the National
Treasury as part of the general fimd of the government: Provided, That any distribution
Procedure adopted by the Court shall give preference to individual consumers and afford each
person having an interest a reasonable opportunity to secure his appropriate portion of the net
damages obtained.

SECTION 19. Proof and Assessment of Damages. - Damages may be proved and
assessed in the aggregate by statistical or sampling methods, by the computation of illegal
overcharges, or by such other reasonable system of estimating aggregate damages as the court in
its discretion may permit without the necessity of separately proving the individual claim, of, or
amount of damage to, persons on whose bebalf the suit was brought.

CHAPTER 6
OTHER PROVISIONS

‘SECTION 20. Statute of Limitations. - Any civil or criminal action to enforce any cause
of action “arising from 4 violation of any provision of this. Act shall be forever barred unless
commenced within five (5) years after the cause of action accrues. The running of the statute of
limitation shalt be suspended curing the pendency of any proceeding.

The cause of action begins to run when the plaintiff suffers injury to its business or
property: Provided, That when the damage suffered by the plaintiff is too speculative to prove,
the cause of action does not accrue until the damage becomes probable: Provided, however, That
if the plaintiff's injury is the result of the continuing violations of this Act, cach independent
anti-competitive act may restart the limitation period or when a plaintiff reasonably fails to
uncover a cause or action that was fraudulently concealed by a defendant.

SECTION 21. Prohibition in the Issuance of Temporary Restraining Orders,
Preliminary Injunctions and Other Preliminary Mandatory Injunctions. - Except for the Supreme
Court, no other court shall issue any temporary restraining order, preliminary injunction or


Preliminary mandatory injunction against the regulatory agency in the exercise of its duties or
functions: Provided That, this prohibition shall apply in all cases, disputes or controversies
instituted by a private party, including, but not limited to, cases filed by regulated firms or those
claiming to have rights through such firms: Provided, however, That, this prohibition shalt 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 be Jess than half of the imposgble fines provided for under
Section 9 of this Act: Provided, finally, That in the event thatthe court finally decides thatthe
applicant was not entitled to the relief applied for, the bond shall accrue in favour of the
regulatoty agency.

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.

The Supreme Court may designate regional trial courts to act as commissioners with the
sole function of receiving facts of the case involving the acts of the regulatory agency. The
designated Regional Trial Cour shalt, within thirty (30) days from the date of receipt of the
referral, forward its findings of facts to the Supreme Court for appropriate action,

SECTION 22. Intellectual Property Rights. - The impicmentation of the provisions of
this Act shall be without prejudice to the rights, liabilities and remedies under Republic Act No.
8293, otherwige known as the Intellectual Property Code of the Philippines: Provided, That, the
exercise of intellectual property rights shall not in any way be used to justify violations of this
Act.

SECTION 23. Trade Associations, - Nothing contained in this Act shall be construed to
prohibit the existence and operation of trade associations organized to promote quality standards
and safety issues: Provided, That, these associations shall not in any way be used to justify any
violation of this Act.

SECTION 24. Guidelines. - The DOJ, in consultation with the DTT, shall prepare the
necessary guidelines for the implementation of this Act: Provided, That, where the guidelines
would apply to an industry or a sub-sector of industry that is subject to the jurisdiction of a
regulatory agency, the DOJ shail, in Preparing the guidelines, consult with the concemed
regulatory agency: Provided, further, That the DO) may revise such guidelines it decms
necessary: Provided, however, That such revised guidelines shall only take effect following its
publication in two newspapers of general circulation.


SECTION 25. Appropriations. ~ The funding necessary for the implerbentation of this
‘Act shall be included in the Annual General Appropriations Act (GAA).

SECTION 26, Separability Clause. - If any clause, sentence, section or part of this Act
Shall be adjudged by a court of competent jutisdiction to be invalid, such judgment shall not
affect, impair or invalidate the remainder ofthis Act, but shall be confined ia its operation to the
slanse, Sentence, paragraph, section, or part thereof directly involved in the controversy.
x
SECTION 27. Suppletory Application. - For purposes of this Act, the Revised Penal
Code, as amended, and other applicable laws shall be applied in a suppletory character,

SECTION 28. Repealing Clause, - All provisions of law, orders, decrees, executive
orders, including rules and regulations or Parts thereof, which are contrary to or inconsistent with
{he provisions of this Act are hereby repealed or modified accordingly: Provided, however, That
all existing competition laws and regulations shall remain in full force and in effect: Provided,
father, That in case of conflict between this Act and such provisions of existing competition
awa and regulations, the provisions of this Act shall prevail.

SECTION 29. Effectiviy Clause. - This Act shall take effect fifteen (15) days following
¥t8 publication in the Official Gazette or in at least two (2) national newspapers of general
circulation,

Approved,


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Iills, Quezon City

FIYTRENTH CONGRESS
First Regular Session

HOUSE BILL NO, 3134

Introduced by REP. ALFREDO “ALBEE” B, BENITEZ

EXPLANATORY NOTE,

The adoption of the GAT in mid-90°s and the entry of the Philippines to the World
Trade Organization raised the need to scrutinize the dynamism between corporations on one
side and the government on the other. With the coming of age of corporations having a
profound influence on market forces and on government action, the issue of fair trade vis-a-
vis fair competition has taken on a fife of its own, As il stands, the country’s current laws on
competition ure antiquated at the least and inadequate at best. There is therefore a need not
only to revisit such laws but to put in place a statute that addresses not only the dynamism
between corporate action and government regulation but also to cnsure that start-up
enterprises and other small corporate entities have a level playing field in the Philippine
market environment.

This representation is thus fortunate to be given the opportunity to file the counterpart
bill to an anti-trust measure filed in the Senate - The Competition Law of 2010 - by the
Honorable Senate President, Juan Ponce Enrile. The proposed legislative measure aims to put
in place a law that, in the words of Senator President’s Explanatory Note - “penalizes
combinations or conspiracies in restraint of trade and all forms of artificial machinations that
will injure, destroy or prevent free market competition.

It is this Representation’s singular honor and privilege to file this counterpart bill in
the House of Representatives with the end in view of facilitating the speedy deliberation of
this piece of proposed legislation and its eventual passage into law that will benefit every
consumer and protect them from unscrupulous practices of big business in the country.

For these reasons, the passage of this measure is earnestly sought.

eB. BENITEZ
legros Occidental


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

FIFTEENTH CONGRESS
First Regular §

House sino, 8134

Introduced by REP. ALFREDO “ALBEE” B. BENITEZ

AN ACT PENALIZING UNFAIR TRADE AND ANTI-COMPETITIVE,
PRACHICES IN RESTRAINT OF TRADE, UNFAIR COMPETITION, ABUSE OF
DOMINANT POWER, STRENGTHENING THE POWERS OF REGULATORY
AUTHORITIES AND APPROPRIATING FUNDS THEREFOR, AND FOR OTHER
PURPOSES

Be it enacted by the Senate and the Howse of Representatives of the Philippines in Congress
assembled:

CHAPTER 1
‘TITLE AND DECLARATION OF POLICY

SECTION 1. Tile. » This Act shatl be known and cited as the "Competition Act of
2010."

SEC. 2. Declaration of Policy. - Pursuant to the constitutional mandate that the State
shall regulate or prohibit monopolies when the public interest so requires and that no
combinations in restraint of trade or unfair competition shall be allowed, the State shall-

(a) promote and enhance economic efficiency and free and full
competition in trade, industry and all commercial economic activities:

{b) prevent the concentration of economic power in a few persons who
threaten to control the production, trade. or industry in order to stifle competition,
distort, manipulate or constrict the discipline of free markets, increase market
prices in the Philippines; and

(C) penalize all forms of unfair trade, anti-competitive conduct and
combinations in restraint of trade, with the objective of protecting and advancing
consumer welfare.

CHAPTER 2

SCOPE AND APPLICATION. DEFINITION OF TERMS

SEC. 3. Scope and Application. - This Act shall be enforceable wi in the territory
of the Republic of the Philippines and shall apply to all areas of trade, industry and


commercial econor activity. It shall likewise be applicable to international trade having
direct, substantial and reasonably foreseeable effects in trade, industry or commerce in the
Republic of the Philippines including those that result from acts done outside the Republic
of the Philippines.

The Act shall apply to: (a) all firms as defined hereunder and all their commercial
agreements, actions or transactions involving goods. services or intellectual property: and.
(b) all natural persons who, acting in their capacity as owner, manager or employee of a
firm, shall authorize, engage or aid in the commission of restrictive practices prohibited
under this Act.

SEC. 4. Definition uf Terms, - As used in this Act, the following terms shall be
defined as:

(a) Agreements shall refer to any type or form of arrangement,
understanding, undertaking or concerted action. whether formal or informal,
written or oral;

(b) Cartel shail mean a combination of firms, providing guods in relevant
markets, acting or joined together (o obtain a shared monopoly to control
production, sale and price, or to obtain control in any particular industry or
commodity, or a group of firms that agree to restrict trade to their mutual benefit,
which may or may not be of an international scale. It shall also refer to firms or
section of firms having common interest designed to promote the exchange of
knowledge resulting from scientific and technical research, exchange of patent
rights and standardization of products among themselves with the intent of
preventing, restricting or distorting competition:

(©) Competition shail mean the process by which economic agents, acting
independently in a market, limil each other's ability to control the prev:
conditions in the market;

(4) Control shall refer to at least twenty percent (20%) ownership. directly
or indircetly, of a firm or a group of firms by another fitin;

(e) Firms shall include any person, natural or juridical, partnersi
combination of association in any form, whether incorporated or not, domestic or
foreign, including those owned or controlled by the government, engaged directly
or indirectly in any economic activity: Provided, That, two firms, one of which is
controlled by the other, shall be treated as one firm: Provided, further, That two or
more firms that ure controlled by a single firm shall be treated as one firm:

(f) Goods shall inctude all types of goods and services:

(g) Market shaii refer to a place or venue for commercial activit
may extend beyond the borders of the Republic of the Philippines, where articles
are bought or sold. It shall also refer to the geographical or economic extent of
commercial deman

{h) Monopoly shall mean a privilege or undue advantage of one or more
firms, consisting in the exclusive right te carry un a particular business or trade,
and/or manufacture particular product, article or object of trade, commerce of


industry. [t is a form of market structure in which one or only a few firms
dominate the total sales of a product or sei

(i) Monopoly Pawer or Dominant Position shall refer to a situation where
a firm, either by itself or acting in collusion with other firms, is in a position to
control a relevant market for the sale of a particular good or service by fixing its
prices, excluding competitor firm, or controlling the market in a speci
geographical area: and

G@) Relevant Market shall refer to the line of commerce in which
compclition has been restrained. [1 shail also refer to the geographic area involved,
including all reasonably substitutable goods. and ali nearby competitors, to which
consumers could tum if the restraint or abuse results in the significant increase in
prices.

CHAPTER 3

PROHIBITED AC

Ss

SEC. 5. Cartelization. - It shall be unlawful for firms providing goods in relevant
markets to join together to monopolize, or to control production in a particular industry or
commodity, the sale and price of such good. and to agree to restrict trade for their mutual
benefit, which may or may not be on an intemational scale. This shall also include an
association by agreement of firms or sections of firms having common interests designed to
promote the interchange of knowledge resulting from scientific and technical researches,
‘exchange of patent rights and standardization of products among themselves with the intent
of preventing, restricting or distorting competition,

Restrictive agreements resulting from cartel-like behavior of firms, in any form, are
hereby per se deemed illegal. ‘These shall include, but not limited to, the following:

(a) Agreements to fix selling price of goods or other terms of sale;
(®) Agreements to limit supply or output;

(©) Agreements to divide the market, whether by volume of sales or purchase or
by territory, by type of goods sold, by customers oF sellers, or by any ather means;

(d) Agreements to exclude or limit dealings with particular suppliers or sellers
from supplying ot selling goods, of customers from acquiring or buying goods;

(e) Agreements applying dissimilar conditions to equivalent transactions with
other parties, thereby placing them at a competitive disadvantage; and

(f) Agreements making the transactions in particular goods dependent upon
other conditions which have no connection with the subject of the transaction.

‘There shall be a prima facie case for the existence of a cartel if and when the
Department of Trade and Industry (DTI) or concerned regulatory agency finds that two or
more persons or firms that are ostensibly competing for the same relevant market and
actually perform uniform or complementary acts among themselves which tend to bring
about artificial and unreasonable increase. decrease or fixing in the price of any goods or


when they simultancously and unreasonably increase, decrease or fix the prices of their
seemingly competing goods thereby lessening competition in the relevant market among
themselves,

SEC. 6. Monopotization. - it shall be unlawful for any firm to willfully or knowingly
acquire and maintain its market power by excluding competitors from any part of trade,
industry or commerce as distinguished from natural growth or development of a firm as a
consequence of a superior product, business acumen or historic accident: Provided, That, a
firm that has at least fifty percent (50%) of the relevant market, or Tirms up to three (3) in
number has at least seventy percent (70%) of the relevant market, as found and certified by
the Department of Trade and Industry or the concerned regulatory agency shall be deemed a
monopoly or in a dominant position,

SEC. 7. Abuse of Monopoly Power or Dominant Position. - It shall be unlawful for
‘one or more firms with monopoly power or in dominant position within relevant markels to
abuse their dominant position, by engaging in unfair methods of competition, or in unfair or
deceptive trade practices, or entering into combinations in the form of trust or otherwise, oF
conspiracy, with the purpose and effect to prevent, restrict, oF distort competition. Abusive
agreements such as, but not limited to, any of the following, shall be deemed to fall under
the crime of abuse of monopoly power or market power by one in dominant position:

{a) Predatory Behavior ‘Towards Competitors - Any agreement, including,
but not limited to, selling goods at a very fow price with the intent of driving
competitors out of the market, or creating barriers to entry;

(b) Price Fixing - Any agreement among competitors to raise, suppress. Fix
or otherwise maintain the price at which their goods and services are sold such as.
but not limited to, establishing or adhering to price discounts, holding. prices
firmly, eliminating or reducing discounts, adopting @ standard or formula for
computing prices, maintaining certain price differentials between different types,
sizes or quantities of products. adhering to a minimum fee or schedule and other
analogous schemes with the purpose and effect of creating a monopoly or cartel or
lessening competition.

(©) Bid Rigging - Any agreement to fix price al auctions or in any other
form of bidding, with the purpose and effect of creating a monopoly or cartel. or
lessening competition such as. bu! nol limited, (o cover bidding, bid suppression.
bid rotation and market allocation and other analogous

In determining whether there is price fixing or bid rigging, the following
circumstances may be considered:

() generally, any considered evidence that two sellers of similar
woods have agreed to sel the price of their goods, to sell only a certain
amount of their goods, or to sell only to a limited number of buyers or
consumers;

(2) a drastic change in prices of goods and services involving
more than one seller of similar goods of vifferent brands. particutarly if
the changes in prices take place in equal amount and about the same
time;


seller refusing to sell based on an agreement with a

(4) the same firm has repeatedly been the low bidder who has been
awarded contracts for a certain service or a particular bidder seems to
win bids on a fixed-rotation;

(5) there is an unusual and unexplainable difference between the
winning bid and all other bids; and

(6) the same bidder bids substantially higher on some bids than on
‘others, and there is no logical cost reason to explain the difference

(@) Limitation and Control of Markets - Any agreement to limit or control
Production, markets, technical development, or investment with the purpose and
effect of creating a monopoly or cartel, or lessening competition

{¢) Market Allocation - Any agreement to divide the market, whether by
volume of sales or purchase or by territory, by type of goods sold, by customers or
sellers or by any other means, with the purpose and effect of creating 2 monopoly
or cartel, or lessening competition

(Arrangements to Share Markets or Sources of Supply - Any agreement
to share markets or sources of supply of raw materiais, with the purpose and effect
of creating a monopoly or cartel, or lessening competition,

(g) Price Discrimination - Any agreement prescribing or charging. directly
or indirectly, discriminatory pricing terms or conditions in the supply or purchase
of goods of like grede and quality with the purpose and effect of creating a
monopoly or cartel, or substantially lessening competition: Provided, That nothing
contained herein shall be construed to prohibit permissible price differentials
unless the same shall have the effect of preventing, restricting or distorting
competition: Provided. further, Thal for the purpose of this section, the following
shall be considered permissible price differentials:

(I) Socialized Pricing - Socialized pricing for the less fortunate
sector of the economy;

(2} Volume Discounts - Price differentials which reflect an
allowance for differences in the cost of manufacture, sale. or delivery
resulting from differing methods or quantities in which the goods are
sold or delivered to the purchasers;

(3) Competitive Pricing - A price differential or other terns of sale
in response to the competitive price of payments, services or faci
furnished by a competitor;

(4) Bonafide Selection of Customers - The selection of customers
on bona fide Wransaction: and


(5) Prive Differentials Due to Changing Market Conditions or
Marketability of Goods — Price changes from time to time it
to changing vonditions affecting the market or the marketability of the
goods concerned such as, but not limited to, actual or imminent
deterioration of perishable goods. obsolescence of seasonal goods.
distress sales under court process. or sale on good faith in
discontinuance of business.

(h) Exclusivity Arrangement - Any agreement imposing restrictions on the
lease or contract for sale or trade of goods concerning where, to whom, or in what
forms goods may be sold or traded, such as, but not limited (0, fixing prices, or
giving preferential discounts, or rebate upon such price, or imposing conditions
not to deal with competing firms, where the purpose of such agreement is to
lessen competition: Provided, That nothing contained herein shall prohibit or
render untawful permissible franchising, licensing or exclusive distributorship
agreements,

(i) Tie-In Arrangements - Any agreement making the supply of particular
goods dependent upon the purchase or lease of other goods from the supplier or
his consignee, where the purpose and effect of such sale or Jease or such condition
is to substantially lessen competition or (0 creute a monopoly or cartel,

G) Boycott - Any concerted refusal to sell or conspiracy not to sell or 10
stop doing business on the part of the suppliers of any goods, unless for a
legitimate purpose, such as, but not limited to:

(I). Defaulting Borrowers - refusal by one or more credit
institutions to extend loans to defaulting debtors;

(2) Defwulting Buyers - refusal by one or more manufacturers
or sellers 10 sell on credit to defaulting customers: and

(3) Violators of Intellectual Property Rights - refusal by
manufacturers or sellers to have any commercial dealings with one or
more firms who violate the intellectual property rights of the owners of
patents, copyrights, trademarks and othr intellectual property.

SEC. 8, Other Unfair Competition Practices, - The following acts shail be unlawful
acts of unfair competition and shall be punishable under this Act:

(a) Distribution of false or misleading information which is capable of
harming the business interests of another firm;

(b) Distribution of false or misleading information to consumers, including the
distribution of information lacking a reasonable basis related to price, character.
method or place of production, properties, suitability for use, or of quality goods; and

(c) Unauthorized receipt, use. or dissemination of confidential scier
technical, production, business or trade information.


CHAPTER 4

FINES AND PENALTIES

SEC. 9. Penalties. - Without prejudice to the violation of other laws, any firm that
shall be found to have violated Sections 5. 6, 7 and 8 of this Act, or any combination
thereof, shall, for cach and every violation, be punished by a fine of not less than Ten
million pesos (Php 10,000,000.00) and not exceeding Fifty million pesos
(PhpS6,000,000.00) if a natural person; by a fine of not less than ‘Two hundred fifty
m_pesos (Php250,000,000.00) but not exceeding Seven hundred fifty million pesos
(Php750,000,000.00) if a firm, and by imprisonment not exceeding ten (10) years, or both,
at the discretion of the court. In the alternative. a fine shall be imposed in the amount double
the gross proceeds gained by the violator or double the gross loss suffered by the plaintiffs.

SEC. 10. imposition of Fines by Regulatory Agency. - Notwithstanding any
provisions of law. regulatory agencies shall, in the conduct of their functions or duties, have
the power 10 impose fines in the amount not less than One hundred thousand pesos
(Php10O0,000,00) and not exceeding Five million pesos (Php5,000,000.00), if a natural
Person: and not less than Five million pesos (Php5,000,000..00) and not exceeding Fifty
million pesos (Php50,000,000.00) if a firm for each violation of or non-compliance with an
order or notice of the regulatory agency. Ten percent (10%) of such fines shall accrue to the
budget of the regulatory agency for the exclusive use in the enforcement of this Act.

CHAPTER 5
ENFORCEMENT

SEC. 11. Preliminary Inquiry. - ‘he Department of Justice (DOJ), in coordination
with the Department of Trade and Industry (DTI), other regulatory and/or appropriate
government agency, shail more propio, upon the filing of a verified complaint by an
interested party or upon referral by the concerned regulatory agency, initiate a preliminary
inquiry for the enforcement of this Act based on reasonable grounds,

SEC. 12. Powers of Concerned Regulatory Agencies. - Notwithstanding the
provisions of the preceding section, the exercise of reguistory powers by different
government agencies over an industry or a sub-sector of an industry shalt be cumulative and
shall not be consifued in any way’ as derogating from the power and authority of the
concemed agency. The government agencies shall cooperate and coordinate with one
another in the exercise of their powers in order to prevent overlap, to share confidential
information, or for other effective measures.

SEC. 13. Power to Investigate and 10 Enforce Orders and Resolutions. - The DOJ
shall conduct preliminary inquiries by administering oaths, issuing subpoena duces tecum
and summoning witnesses, and commissioning consultants or experts. It shall determine if
any provision of this Act has been violated. enforce its orders and carry out its resolutions
by means, provisional or otherwise, under existing laws and procedures including the power
to punish for contempt and fo impose fines.

SI

14. Seif-incrimination. - Pursuant to the preceding section, a person subject of
any preliminary inquiry or investigation by the DOJ shall produce the specified document or
information when so required by written notice: Provided, That no person shall be excused



from disclosing any document or information to the inquiring officer on the ground that the
Gisclosure of the information or document may be incriminating: Provided, further, That
such document or information produced by the person subject of investigation shall not be
admissible as evidence against him in criminal proceedings: Pravided, finally, That such
document or information shall be admissible in evidence in civil proceedings including
those arising from or in connection to the implementation of this Act.

SEC. 15. Privileged Communication Exclusion, - Nothing in the preceding section
shall compel the disclosure of privileged communication: Provided, That the person who
refuses to disclose the information or produce the document or other material required by
the inquiring officer in relation to the preliminary inquiry being conducted shall
nevertheless be obliged to give the name and address of the firm to whom, or by whom. or
‘on whose behalf, such privileged communication was made.

SEC. 16. Confidentiality of Information, « Any document or information submitted
by firms, as determined and marked confidential by the DOJ, relevant to any investigation
being conducted pursuant to this Act shall not, in any manner, be directly or indirectly
disclosed, published, transferred, copied, or disseminated.

Any violation of this section shall be imposed the penalty of imprisonment ranging
from three (3) to six (6) years and a fine of not fess than One hundred thousand pesos
(Php100,000,00) but not more than Five hundred thousand pesos (Php500,000,00).

SEC. 17. Inmunity from Suit. - Any person or firm which cooperates or furnishes
any information, document or data to the DOJ before or during the conduct of the
preliminary inquiry that constitutes material evidence as determined by the DOJ under this
‘Act shall be immune from any suit or charge including from affected parties and third
parties: Provided, further, ‘That any person or firm which cooperates or furnishes
information, document or data to the DOJ in connection to an investigation being conducted
shall not be subjected to any form of reprisal or discrimination: Provided, furthermore, That
such reprisal of discrimination shall be considered a violation of this Act and subjected to
the penalties provided for under Section 9: Provided, finally, That, notwithstanding the
provisions of Section:21 hereof, the firm which cooperates with the DOJ in its investigation
shall be entitled to a reward equivalent to twenty percent (20%) of any monies paid by the
firm subject of the inquiry, or the monetary relief recovered from court action.

Nothing in this section shall preclude prosecution for persons and firms who
reported to the Department of Justice with malicious information, data and falsified
documents which is damaging to the business and integrity of the persons and firms under
inquiry. Such act shatl likewise be considered as an unfair trade practice punishable under
this Act.

SEC. 18, Termination and Action on Preliminary Inquiry, - The Department of
Justice, after considering the statements made, or documents of articles produced, in the
‘course of an inquiry conducted by it, shall terminate the preliminary inquiry by issuing a
resolution ordering its closure if no violation or infringement of this Act is found; or by
issuing a nolo contendere resolution; or issuing a resolution to, singly or cumulatively, (a)
impose penalties in the range provided under Section 9 hereof; (b) order sanctions which may
be imposed by the regulatory and/or appropriate government agency: (c) order the
rectification of certain acts or omissions; or (4) order the restitution to the affected purtics.

When determined by the facts and circumstances, the DOJ shall institute a civil
action by class suit in the name of the Republic of the Philippines, as parens patriae. on



behalf of persons residing in the Phitippines, to secure treble damages for any injury
sustained by such persons by reason of any violation of this Act, plus the cost of si
reasonable atlomey's fee

and

If the evidence so warrants, the DOJ shall institute criminal cases for violation of
this Act or relevant laws: Provided, That. for criminal prosecution of violations of this Act,
no preliminary investigation shall he required, neither shall a petition for review be made

Provided, further. ‘Vhat any appeal shall be instituted to a division of the Court of Appeals
exclusively handling competition and consumer protection laws

SEC. 19. Nolo Contendere Resolution. - Any firm under inquiry under the
provisions af this Act may submit to a nolo contendere resolution at any time before the
termination of the preliminary inquiry by: a) the payment of an amount within the range of
penalties provided for under Section 9; b) by entering into an undertaking to effectively stop
and rectify the acts complained against, make restitution to the affected parties, whether or
not the parties are plaintiffs or witnesses: and. ¢) by submitting regular compliance reports
as may be directed: Provided, That, ten percent (10%) of the amounts paid under this
section shall equitably accruc to the DOJ and/or regulatory government agencies involved
in the inquiry: Provided, further, ‘Vhat a nolo comendere resolution shall not bar any inquiry
for the same or similar acts if continued or repeated,

SEC. 20. Private Action. - Regardless of the status or pendency of any proceedings,
any firm that suffers injury by reason of any’ violation of this Act may institute a separate
and independent civil action, irrespective of the amount involved in the controversy against
the defendant or defendants and shall recover treble damages sustained, the costs of suit and
reasonable attorney's fecs: Provided, however, That no filing fees shall be collected:
Provided, further. That filing fees shall constitute a first lien in the award of damages.

SEC. 21, Effect of Final Judgment. - Any final judgment in a civil or criminal action
brought by the DOJ on behalf of the people of the Philippines under (his Act to the effect
that a defendant has violated any oF all of the provisions of this Act shall be res judicata us
to any claim by any person on whose behalf such action was brought: Provided. That such
person notifies the court having jurisdiction of the case within the period given by the court:
Provided, further, That such period shall not be tess than ninety (90) days. It shall be prima
facie evidence against such defendant in any civil action brought by any other party against
‘such defendant under this Act as to all matters respecting which said judgment would be an
estoppel as between the parties concerned

SEC. 22. Distribution of Damages Recovered, - The damages recovered in a
action under Section 19 of this Act shall be distributed in the following manner: (1) as
determined and (o be authorized by the Court having jurisdiction of the case; (2) ten percent
(10%) of the total amount of damages shall accrue (0 the DOJ and or regulatory agency to
be used exclusively in the enforcement of this Act; and, (3) the remainder of which total
amount of damages shall be deemed a civil penalty by the Court and shall be deposited to
the National Treasury as part of the general fund of the government: Provided, That any
distribution procedure adopted by the Court shall give preference to individual consumers
and afford each person having an interest a reasonable opportunity to secure his appropriate
portion of the net damages obtained.

SEC. 23. Measurement of Damages. - Damages may be proved and assessed in the
aggregate by stalistical or sampling methods. by the computation of illegal overcharges. o
by such other reasonable system of estimating aggregate damages as the court in its



discretion may permit without the necessity of separately proving the individual claim. of,
or amount of damage te, persons on whose behalf the suit was brought

CHAPTER 6
OTHER PROVISIONS
SEC. 24, Stutwe of Limitations. - Any civil or criminal action to enforce any cause
of action arising from a n of any provision of this Act shall be forever barred unless

commenced within five (3) years after the cause of action accrues. The running of the
statute of limitation shall be suspended during the pendency of any proceeding,

The cause of action begins to run when the plaintiff suffers injury to its business or
property: Provided, That when the damage suffered by the plaintiff is too speculative to
prove, the cause of action does not accrue until the damage becomes probable: Provided,
however, That if the plaintiffs injury is the result of the continuing violations of this Act,
each independent anti-competitive act may restart the limitation period or when a plaintiff
reasonably fails to uncover a cause or action that was fraudulently concealed by a
defendant.

SEC. 25, Prohibition on the Issuance of Temporary Restraining Orders, Preliminary
Injunctions and Preliminary Mandatory Injunctions. - Except for the Supreme Court, no
other court shail issue any temporary restraining order, preliminary injunction or
preliminery mandatory injunction against the regulatory agency in the exercise of its duties
or functions: Provided. That, this prohibition shalt apply in ali cases, disputes or
controversies instituted by a private party. including, but not limited to, cases filed by
regulated firms or those claiming to have rights through such firms: 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 onder will result
in grave injustice and imeparable injury lo 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 be less than
half of the imposable fines] provided for under Section 10 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 favour of the regulatory agency.

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 Icast one (I) year without
pay in addition (o other criminal, civil or administrative penalties.

‘The Supreme Court may designate regional (rial courts to act as commissioners with
the sole function of receiving facts of the case involving the acts of the regulatory agency.
The designated Regional Trial Court shall, within thirty (30) days from the date of receipt of
the referral, forward its findings of facts 1o the Supreme Court for appropriate action.

SEC. 26. Intellectual Property Rights. - The implementation of the provisions of this
Act shall be without prejudice to the rights, liabilities and remedies under Republic Act No.
8293, otherwise known as the Intellectual Property Code of the Philippines: Provided, That,
the exercise of intellectual property rights shall not in any way be used to justify violations
of this Act.



SEC. 27. Trade Associations. - Nothing contained in this Act shall be construed to
Prohibit the existence and operation of trade associations organized to promote quality
standards and safely issues: Provided, That, these associations shall not in any way be used
to justify any violation of this Act,

SEC. 28. Guvidetines. - The DOJ. in consultation with the DT, shall prepare the
necessary guidelines for the implementation of this Act: Provided, ‘That, where the
guidelines would apply to an industry or a sub-sector of industey that is subject to the
Jurisdiction of a regulatory agency, the DOJ shall, in preparing the guidelines, consult with
the ‘concerned regulatory agency: Provided, further, That the DO] may revise such
guidelines it deems necessary: Provided. however, That such revised guidelines shall only
take effect following its publication in two newspapers of general circulation.

SEC. 29. Appropriations. - The sum of One hundred million pesos (Php
100,000,000.00) for the initial year of implementation of this Act is hereby appropriated.
Thereafter such amounts as may be necessary for the continuous implementation of this Act
shall be included in the Annual General Appropriations Act (GAA),

SEC. 30. Sepurability Clause. - if any clause, sentence, section or part of this Act
shall be adjudged by a court of competent jurisdiction to be invalid, such judgment shal! not
affect, impair or invalidate the remainder of this Act, but shall be confined in its operation
to the clause, sentence, paragraph, section. or part thereof directly involved in the
controversy.

SEC. 31. Suppletory Application. - For purposes of this Act, the Revised Penal
Code, as amended, and other applicable laws shall be applied in a suppletory character.

SEC. 32, Repeating Clause. - All provisions of law, orders. decrees, executive
orders, including rules and regulations or parts thereof, which are contrary to or inconsistent
with the provisions of this Act are hereby repealed or modified accordingly: Provided,
however, That all existing competition laws and regulations shall remain in full force and in
effect: Provided, further, That in case of conflict between this Act and such provisions of
existing competition laws and regulations, the provisions of this Act shall prevail.

SEC. 33. Kffectivity Clause. - This Act shall take effect fifteen (15) days following
its publication in the (ficial Gazette or in at least two (2) national newspapers of general
circulation.

Approved,


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILLNO._ 8244

Introduced by HON. GLORIA MACAPAGAL ARROYO

EXPLANATORY NOTE

Section 19 of Article XII of the 1987 Constitution mandates the State to “regulate
or prohibit monopolies when the public interest so requires.” Article 186 of the Revised
Penal Code penalizes monopolies in restraint of trade,

In our quest for national development, an open economy that is free and fosters
competition is a necessary prerequisite. A closer examination of our history would
reveal that our underdevelopment was caused by lack of competition in our economy.
Given this past experience and the direction in the international economy towards
liberalization and globalization, various administrations have introduced reforms to
Promote competition in the form of lowering of trade and investment barriers,
deregulation of certain industries to attract investments from more players,
privatization of certain industries, among others.

Adnmittedly, while these measures achieved positive results, the country has yet
to adopt a legislation that would institutionalize a responsive and comprehensive
framework for anti-trust policy. As early as the Ninth Congress, this Representation
fully aware and cognizant of the ill-effects in the economy of restrained and curtailed
competition filed a legislative measure that would restore competition where it has
disappeared, preserve it where it still exists and institutionalize it as a system for
controlling and regulating the economy of the country pursuant to the mandate of the
Constitution,

To sustain the momentum we have gained over the past nine (9) years and to
ensure a healthy, open and competitive economy, the passage of his bill is urgently and

earnestly requested,
exo vacrencns ARROYO


Republic of the Philippines
HOUSE OF REPRESENTATIVES

Quezon City

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILLNO.__ 38244

Introduced by HON. GLORIA MACAPAGAL ARROYO

AN ACT
CREATING THE FAIR TRADE COMMISSION OF THE PHILIPPINES

Be it enacted by the Senate and the House of Representatives of the Philippines in
‘Congress assembled:

SECTION 1. Objectives, - It is the declared policy ofthe State that all sectors of
the economy and all regions of the country shall be given optimum opportunity to
develop; that a trade policy be pursued that serves the general welfare; that when
public interest 50 requires, the State shall regulate or prohibit monopolies; that no
combinations in restraint of trade or unfair competition shall be allowed and that
consumers shail be protected from trade malpractices and Filipino enterprises against
unfair foreign competition and trade practices.

SEC. 2. Scope of Application. - This Act shall apply to all persons, whether
natural or juridical, such as, firms, partnerships, corporations, companies, associations,
or any combination thereof, irrespective of the mode of creation, or contro! of
ownership including their branches, subsidiaries, affiliates, or other entities directly or
indirectly controlled by them, which are engaged in all commercial transactions or
activities, involving goods and services.

SEC.3. Definition of Terms. For purposes of this Act, the following
definition of terms shall be adopted:

a. Entrepreneur - means, a person, juridical or natural, who carries on a
commercial, industrial, financial or any other business activity. Any officer ar
duly authorized employee, agent, or person, who acts for the benefit of any
entrepreneur, shall also be deemed covered by this Act.

b. Competition - means a situation in which two or more entrepreneurs, do, ot may
within the scope of their business activities, and without undertaking any
significant change in their business activities, engage in any of the following acts:

1. Supplying the same or similar goods or services to the same consumers or
customers;

2. Getting supplies of the same or similar goods or services from the same
supplier.

¢ Unreasonable Restraint of Trade - means, such business activities, by which

entrepreneurs by contract, agreement, or any other concerted activities mutually

Testrict or conduct their business activities in such a manner as to fix, maintain or

enhance prices, or to limit production, technology, products, facilities, or

customers and suppliers, thereby causing, contrary to public interest, a
substantial restraint of competition in a particular field of trade.



d. Unfair Business Practices - means any act which tends to impede fair competition
and which is hereinafter designated as such by the Fair Trade Commission.

SEC. 4. Unfair Business Practices. - It shall be untawful for any person to engage in
unfair business practices. For purposes of this Act, unfair business practices shall be
divided into two groups: a} general which are applicable to all fields of business, and; b)
specific which are applicable to a particular field of activity.

‘A. General Business Practices The following are considered general unfair
business:

1. Unreasonable refusal to deal, such as, refusing or limiting supply of
commodities or services from or to an entrepreneur without any
justifiable reason:

2. Discriminator business terms, such as, without justifiable reason,
favorable or unfavorable treatment with respect to terms or execution
of transactions on the basis of the region of the customer;

3. Group boycott, joint discrimination, such as, performing jointly
without justifiable reason such acts as refusal to deal, or having trade
partners perform acts rendering disadvantage to them;

4. Discriminatory Prices, such ‘as supplying or _zeceiving
commodities/services at prices which unreasonably discriminate on
the basis of region or customer; ,

5. Unreasonably low or high prices, such as supplying commodities or
services for an unreasonably high consideration to exclude
competitors;

6. Unjustifiably luring of customers from competitors such as, inducing
customers to transact business with oneself by offering unfair or
excessive advantages in light of normal business practices;

7. Undue representation such as, deceptively or exaggeratedly
representing the items such as price size, origin, packing or
deceptively stating that one’s products are better than those of the
competitor;

8. Undue Coercion, such as, coercing customers to transact business by
threatening undue disadvantages in light of normal business practices;

9. Abuse of one’s superior position, such as business, with a customer on
unreasonably unfavorable terms by using the fact that one’s position is
superior than the customer's;

10. Transactions with exclusive terms, such as, without justifiable reason,
requiring as a condition of transacting business with third parties, that
they do not transact business with one’s competitors;

11. Transaction with restrictive terms , such as, without justifiable reason,
entering into transactions with customers on such terms as restricting
the sales territory or trade partner;

12. False exaggerated advertisement, such as, inducing consumers by false
or exaggerated advertisement of trade specifications.

SBC.5 —_ Monopolistic Practices. - Every person who shall monopolize, or attempt
to monopolize or combine or conspire with any other person, monopolize any part of
the trade or commerce within the Philippines or with foreign countries, shall be deemed
guilty under this Act and shall be punished by a fine of at least P150,000 or by
imprisonment of a maximum period of six years or both.

The following are considered monopolistic and are illegal:

1. Where a person either by himself or acting together with a few enterprises is in a
Position to control the relevant market for a particular good or service or groups
of goods or services through the following abusive acts:


& Acts tending monopoly; and, .
g Allother acts which restrain or suppress competition.

SEC, 7. Consumers’ Protection. - Manufacturers, producers, importers,
wholesalers and retailers are prohibited from engaging in the following acts:

a. Hoarding or destroying or consumer goods or rendering them unserviceable,
or destroying the means or production or distribution, whether directly or
indirectly or through third parties, with the purpose of bringing about a price
increase;

b. When engaged in the manufacture or importation of products, failing to
ensure an adequate supply of spare parts and replacements, or failing to
maintain an adequate after-sales service for consumers, except for reasons
outside their control;

c. Declining liability for defective products or services rendered not meeting the
supplier's description of such goods and services.

d. Inconnection with the supply of product or services, making any warranty:

i, limited toa particular geographic area or sales point;

ii, falsely representing that product are of a particular style or model;

iii, falsely representing that the goods are new or of a specified age;

iv. representing that products or services have any sponsorship, approval,
performance and quality characteristics, components, materials,
accessories, uses or benefits which they do not have.

e. Engaging in conduct that is liable to mislead the public as to the nature,
price, availability, characteristics, suitability for a given purpose, or quality of
any products or services;

£ Engaging in the offering of gifts and prizes with the intention of not
providing them and offering price reductions for products available in
unreasonably limited quantities; and

8 Supplying any product which is liable to cause injury to health or physical
harm to consumers, when properly used, or which does not comply with a
consumer safety standard which has been prescribed. Any person who is
guilty of any of the acts hereunder enumerated shall be punished by a fine of
not less than P150,000 or by imprisonment of a maximum period of six years
or both in the discretion of the court.

SEC. 8 Implementing Agency The Department of Trade and Industry (DTI)
shall be the administrative implementing body of the provisions and intent of this Act.
Where a claim is cognizable in the first instance by the DTI alone, judicial interference
shall be withheld until the administrative process has run its course.

To enable the Department to effectively implément the provisions and intent of
this Act and its implementing rules and regulations ii is hereby authorized to:

1. Prescribe and promulgate within six (6) months such rules and regulations, as it
may deem necessary to effectively impiement the provisions and intent of this
Act, and said rules and regulations shail take fifteen (15) days following their
Publication in a newspaper of general circulation or in the Official Gazette;

2 Conduct investigation, hearing and inquiry, as it may deem necessary for the
following purposes, inter alia:

a. determine if this Act needs amendments;

b. determine the appropriate rules and regulations, policies and
programs for this Act;

© determine the nature, organization, and resources of any person,
firm, entity or association doing business in the Philippines;

d. determine the practices, acts, methods, schemes, and arrangements
used in the trade, industry, and business: and.


e. determine if a certain person, firm, entity or association has
violated or is about to violate any provisions of this Act or its rules
and regulations.

The officials and employees authorized to conduct the investigation, hearing and
inquiry referred to in this subsection shall have the power to administer oath, issue
subpoena and subpoena duces tecum to compel the attendance of witnesses and the
production of the necessary papers and documents, take data, testimony, and evidence,
and to punish direct and indirect contempt as granted to superior courts under Rule 71
of the Rules of Court.

3. Require any person, firm, entity or association to submit to it periodically or
whenever necessary, such report, data, information, paper or document it may
deem necessary;

4. Administratively adjudicate violations of this Act and its rules and regulations in
accardance with executive Order No, 913, Series of 1983 and its implementing
rules;

5. Inspect, periodically or whenever necessary

a. Any pertinent factory, shop, laboratory, establishment, store,
warehouse, any means of transportation, and the like;

b. Any pertinent equipment, finished or unfinished products, raw
materials, containers, labellings, and other pertinent properties found
therein;

Any pertinent papers, documents and records found therein; and,

4. Any pertinent work/activity being undertaken in said place.

The officials/employees authorized to conduct such inspection may obtain
reasonable quantity of samples of the properties (except equipment) mentioned in the
preceding paragraph; to take pictures or video tape of the places and things mentioned
in paragraphs (a) and (b); and secure copies of the papers mentioned in paragraph (c).
All acts authorized under this subsection shall be conducted at reasonable hours, with
reasonable promptness, in a professional manner, and without undue disturbance to
any legitimate work/activity being undertaken inside said places, Receipts shall be
issued for samples so obtained; and,

6. Perform such other functions as may be necessary to effectively implement the

provisions and intent of this Act. And regulations or to determine compliance
therewith.

Whenever any violation of the provisions of this Act is committed by a
corporation/association, the officer or employees immediately tesponsible, the
President, as well as, the Directors and manager of said corporation/ association, or the
agent representative in the Philippines in case af a foreign corporation/ association, who
shall have knowingly permitted or failed to prevent the commission of such violations,
shall be held as principals thereof,

Any property used in the commission of said violation shall be forfeited in favar
of government.

SEC.9 Repealing Clause. - Articles 186,187, and 188 of the Revised Penal Code
are hereby repealed. Ail laws and rules inconsistent with the provisions herein are
hereby repealed, amended or modified accordingly.

SEC. 10 Affectivity Clause- This Act shall take effect upon its approval.
Approved,


Fificenth Congress
First Regular Session

HOUSE BILL NO. 3476,

Introduced by Honorable Reynaldo V, Umali
and Honorable Czarina D, Umali

EXPLANATORY NOTE

ction 19, Article XII of the 1987 Constitution provides:

“The State shall regulate or prohibit monopolies when the
public interest so requires. No combinations in resiraint of trade or
wiyfair competition shall be allowed."

As proof of the importance of this Constitutional mandate, Section 22,
Article X11 encourages the promulgation of legislation that would impose civil
and criminal sanctions against those who circumvent or negate this principle.

“Section 22. Acts which circumvent or negate any of the
provisions of this Article shall be considered inimical to the national
interest and subject to criminal and civil sanctions, as may be
provided by law.”

Although previous legislations have been passed pursuant to this
Constitutional mandate, the increased deviousness and complexity of schemes in
perpemiating monopolies, unfair competition, and price manipulation in the free
market necessitates an equally sophisticated legislation that would effectively
address these concerns.

Developed countries use anti-trust regulations to maintain comp:
that ensures efficient working market economy and modern democracy. ‘The
competition regulator is a government agency, usually a statutory authority,
sometimes called the economic regulator, which oversees and enforces
competition laws, and may sometimes also enferce consumer protection laws
Many nations implement competition laws, and there is general agreement on
acceptable standards of behavior. The degree to which countries enforce their
competition policy does vary substantially, with the United States generally
regarded as having the most strict competition laws and enforcement.

Philippine competition law must be a law of general application,
addressing al] sectors of the economy. Exemptions from its application may be
allowed if they do not limit competition or are based on sound economic


principles, and are aimed at facilitating legitimate economic activity.
Competition law should contain provisions explicitly prohibiting business
practices that are clearly against economic efficiency and consumer welfare.

Competition regulators may also regulate certain aspects of mergers and
acquisitions and business alliances and regulate or prohibit cartels and
monopolies. Competition, through its distributive, allocative and incentive
functions, can stop undue concentration of economic power and the consequent
concentration of political power in the economic elite who use their economic
and political powers to have their inefficiencies subsidized by the majority of
the population. The current laws for fostering competition in the Philippines are
inadequate to stop the deleterious effects of anti-competitive structures and
behavior in the market, Despite the large number of laws and their varied
nature, competition has not been fully established in all sectors of the economy,
nor has existing competition in other sectors of the market been enhanced.
These laws have been hardly used or implemented as may be seen in the lack of
cases litigated in court or if ever a case is filed, in the successful prosecution of
the culprit. Given the large number of enforcement agencies, responsibility is
too diffused and accountability for implementation of the laws is hard to
pinpoint. There is also a lack of expertise in the appreciation and
implementation of competition laws that rely heavily on economic thought,
techniques of analysis, and value preferences as tools of enforcement.
Identifying a single specialized agency under a specific competition law, with
the necessary expertise and authority to oversee the enforcement of competition
laws is a crucial first step.

This bill therefore proposes to penalize combinations or conspiracies in
restraint of trade and all forms of artificial machinations that will injure, destroy
or prevent free market competition. It also seeks to strengthen and give more
powers to the National Consumer Affairs Council created under Republic Act
No. 7394 or the “Consumer Act of the Philippine.”

In view thereof, early consideration and approval of this bill is most
eamestly sought.

/
. Yanaty
YNALDO V. UMALL c A D. UMALI

‘Representative Representative
Second District, Province of Oriental Mindoro Third District, Nueva Ecija



Fifteenth Congress
First Regular Session

HOUSE BILLNO. _._ 3476

Introduced by Honorable Reynaldo V. Umali
and Honorable Czarina D. Umali

AN ACT

PROHIBITING MONOPOLIES, ATTEMPT TO MONOPOLIZE AN
INDUSTRY OR LINE OF COMMERCE, MANIPULATION OF PRICES
OF COMMODITIES, ASSKT ACQUISITION AND INTERLOCKING
MEMBERSHIPS IN ‘THE BOARD OF DIRECTORS OF COMPETING
CORPORATE BODIES AND PRICE DISCRIMINATION AMONG
CUSTOMERS, PROVIDING PENALTIES THEREFOR AND
GRANTING ADDITIONAL POWERS AND FUNCTIONS TO THE
NATIONAL CONSUMER AFFAIRS COUNCIL AND FOR OTHER
PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Short Title. — This Act shall be known as the “Philippine
Anti-Trust Act.”

SEC. 2. Dectaration of Policy. - It is the policy of the State to maintain
and enhance free and full competition in trade, industry and all commercial
economic activity and to penalize all forms of unfair trade, anti-competitive
conduct and combinations in restraint of trade in order to improve consumer
welfare

SEC. 3. Scope and Limitations. — ‘This Act shail apply to all areas of
wade, industry and commercial economic activity and the usc of intellectual
property in such manner as to cause the anti-competitive effects prohibited
herein. This Act shall not derogate the direct enjoyment of the privileges and
Protections conferred by Republic Act No. 8293, otherwise known as the
“hueltectual Property Code of the Philippines,” and other laws protecting
intellectual property, including inventions, industrial models, trademarks and

copyrights. Neither shall this Act apply to the combinations or activities of


workers or employees, nor to agreements or arrangements between two or more
employers, when such combinations, activities, agreements or arrangements are
designed solely to facilitate collective bargaining in respect of conditions of
employment. -

SEC. 4. Definition of Terms. — As used in this Act:

a) “Competition” relers to the process by which cconomic agents,
acting independently in a market, limit each other’s ability to contro! the
conditions prevailing in that marker;

b) — “Couneil” refers to the National Consumer Affairs Council created
under Republic Act No. 7394, otherwise known as the “Consumer Act of the
Philippines?

c) “Goods” refer to all property, tangible and intangible, and services;

d) “Market” means a collection of goods that are capable of being
substituted for each other and that buyers are or would be willing to substitute,
and a specific territory, which may extend beyond the borders of the Republic of
the Phitippines, in which are located sellers among whom buyers are or would
be willing Lo substitute from whom they would buy; and

e) “Person” includes not only individual but also corporations,
partnerships, associations and other juridical persons existing under or
authorized by the laws of the Philippines or by the laws of any foreign country

SEC. 5. Dominant Position. - A fum shall be deemed to have a
dominant position if, acting on its own, it can profitably and materially restrain
or reduce competition in a market for a significant period of time.

For purposes of this Act, “firm” shall refer to any natural or legal person,
governmental body, partnership or association in any form, engaged dircetly or
indirectly in economic activity. Two firms, one of which is controlled by the
other, shall be treated as one firm. Two or more firms that are controlled bya
single firm shall be treated as one firm. The Council shall, from time to time,
adopt a regular setting of what constitutes control

SEC. 6. Safe Harbor. — A firm shall not be deemed to have a dominant
position unless its share of the relevant market exceeds the percentage set by

law. A firm having a market share exceeding a percentage set by law, may or


may not be found to be dominant, depending on the cconomic situation in that
market.

SEC. 7. Balancing Efficiencies. — A prohibited agreement under this Act
may nevertheless be permissible and allowed by the Council if said agreement

has brought about, or is likely to bring about gains in real, as opposed to merely

any limitation on competition that result or are likely to result from the
agreement; or (b) the well-being of the consumer is expected to be enhanced as
a result of the agreement.

SEC. 8. Concentrations. — A concentration shall be deemed to arise
when: (a) two or more previously independent firms merge, amalgamate or
combine the whole or a part of their business; or (b) one or more natural or legal
persons already controfling at least one firm, acquire, whether by purchase of
securities or assets, by contract or by other means, direct or indirect control of
the whole or parts of one or more firms.

SEC. 9. Prohibited Concentrations. — Concentrations that will
significantly limit competition as may be determined by the Council are
prohibited.

SEC. 10. Permissible Concentrations. - Concentrations shall be allowed
by the Councif where the parties establish that: (a) the concentration has brought
about or is likely to bring about gains in real, as opposed to merely pecuniary,
efficiencies that are greater than or more than offset the effects of any limitation
on competition that result or are likely to result from the concentration; or (b)a
party to the concentration is faced with actual or imminent financial failure, and
the concentration represents the least anti-competitive arrangement among the
known alternative uses for the failing fiem’s assets,

SEC. 11. Burden of Proof. - The burden of proof under Section 10 lies
with the parties seeking the exemption.

A party seeking to rely on the exemption specified in Section 10 must
demonstrate that if the concentration were not consummated, it is not likely that
the relevant real efficiency gains would be realized by means that will limit

competition to a lesser degree than the concentration


A party seeking to rely on the exemption must: (a) demonstrate that
reasonable steps have bcen taken within the recent past to identify alternative
purchasers for the failing firm's assets; and (b) fully describe the results of that
search.

SEC. 12. Computsory Notification. - Parties wo an agreement that will
produce a concentration larger than the minimum size as may be provided in the
implementing rules and regulations that will be issued by the Council are
prohibited from consummating such concentration until thirty (30) days after
providing notification to the Council, in the form containing, the information
specilied under the rules and regulations issued pursuant to Section 16 of this
Act. An agreement consummated in violation of this requirement shall be
considered void and shall subject the parties to the corresponding penalties.

SEC. 13. Additional Information. - The Council may, in writing,
request the parties to the agreement for additional information before the
expiration of the thirty (30) day period referred to in Section 12 of this Act. ‘The
issuance of such a request has the effect of extending the period within which
the concentration may not be consummated for an additional thirty (30) days,
beginning on the day after substantially all of the requested information is
supplied to the Council

SEC. 14. Voluntary Notification, — Parties to an agreement who are not
subject to the notification requirement in Section 12 of this Act may voluntarily
notify and, if they do so, be subjected to the same procedure, restrictions and
Tights as are applied to cases of compulsory notification.

SEC. 15, Effect of Notification. — \f, before consummation of a
concentration, the Council determines that such concentration is prohibited and
does not qualify for exemption under this Act, the Council may:

a) Prohibit consummation of the concentration;

b) Prohibit consummation of the concentration unless and until it is
modified by changes specified by the Council; or

ce) Prohibit consummation of the concentration unless and until the

Pertinent party or parties enter into legally enforceable agreements specified by
the Council


SRC. 16. Anti-Trust Powers and Functions of the National Consumer

Affairs Council. — The Council shall

a) Adopt and publish regulations stipulating

1) The minimum size of concentrations subject to the notification
requirement of Section 12;

2) Yhe information that must be supplied for notified concentrations;

3) Exceptions or exemptions from the notification requirements of
Section 12 for specified types of concentrations; and

4) Other rules relating to the notification procedures in Sections 12,
13 and 14 hereof,

b) Determine within three (3) years after consummation that either a
notified concentration or a notified concentration in which the provisions of
Sections 12 to 14 are not fully complied with has led or will probably lead to a
significant limitation of competition and does not qualify for exemption set out in
Section 10 of this Act. If it so determines, the Council may:

1) Undo the concentration by dissolving it into its individual
elements;

2) Require other modifications of the concentration, including sale of
a portion of its operations or assets; or

3) Require the surviving firm or firms to enter into legally enforceable
agreements specified by the Council and designed to reduce or
eliminate the competition limiting effects of the concentration,

c) Enforce and effectively administer the provisions of this Act and
other fair trade laws, subject to the powers vested in the courts and other
administrative agencies under this Act;

d) Undertake and prepare industry studies to determine industry
structures, and the state of competition and competitiveness of Philippine
industries, and collate, compile, distribute and disseminate resource materials on
competition policy, with the end in view of creating a national database on
competition;

#) Conduet workshops and seminars, information campaigns for the

public and train or develop a pool of experts on competition;


f) Extend technical assistance to the Philippine delegations to
intemational bodies and meetings in regard to trade and competition law and
policy;

g) Draft and recommend proposed administrative and legislative
measures for respective consideration and adoption by the executive or
legislative branch of government;

h) Make submissions to the government authorities engaged in designing
or administering legislations or regulations which could affect competition in
any market in the Philippines, intervene in hearings and proceedings held with

regard to the adoption or admini

ration of such laws or regulations, and publish
such submissions and interventions without divulging confidential information;

i) Administratively adjudicate violations of this Act and rules and
regulations issued pursuant thereto, by conducting a formal investigation,
independent of the corresponding criminal and civil action for said violations;

§) Conduct its own administrative investigations;

k) Initiate or institute the appropriate civil action or procceding before
the proper court or administrative agency in the implementation of the

provisions of this Act and other fair trade laws or restrain any threatened
violations thereof;

1) Institute the appropriate information and prosecute criminal cases for
any and all violations of this Act and other fair wade laws after conducting a
preliminary investigation motu proprio or upon complaint of any person, when
there is sufficient ground to engender a well founded belief that the violation
complained of is being or has been committed, and institule the appropriate
action for the recovery of civit liability in accordance with the Rules of Court;

m) Recommend the amendment of existing franchises when, based on its
own evaluation, the same has adversely affected the growth of the relevant
market or industry;

n) Require any person, firm, entity or association to submit to it
Periodically or whenever necessary, such report, data, information, paper or
document in such form as may be prescribed by the Council;

©) Request the different goverment agencies for assistance in obtaining

information necessary for the proper discharge of its responsibilities under this


Act, and examine, if necessary, the pertinent records and documents in the
possession of such government agency;

p) Promulgate such rules and regulations as may be necessary to
implement the provisions and intent of this Act which shall take effect fifteen
(15) days following their publication in at least two (2) newspapers of general
circulation or in the Official Gazette; and

q) Perform such other functions as it may deem appropriate for the
proper entorcement of this Act.

SEC. 17, Administrative Adjudication, — As soon as a formal charge is
filed with the Council and even prior to the commencement of the formal
investigation, the Council may mofu proprio or upon verified application of any
person, issue preliminary order prohibiting firms from carrying on the anti-
competitive or unfair practices referred to in this Act and, if necessary, require
such firms to take other specified actions to eliminate the harmful effects of such
practices and lo ensure against recurrence of such practices. Before issuing any
order, the Council shall be satisfied that the proposed measures are urgently
required to avoid serious, imminent and irreparable harm to the economic
interests of the Philippines, as expressed in this Act. Where the effectiveness of
the order will not thereby be prejudiced, the Council may permit the firms to
present their views regarding the proposed order. The Council shall provide by
tules and regulations the procedures and restrictions for the issuance of such
preliminary orders.

All preliminary orders may, under this Section, lose effect twenty one
(21) days after they are issued, unless renewed by express decision of the
Council

Upon its decision becoming final and executory, the Council shall, on its
own initiative or upon motion of the winning party, issue a writ of execution
The Council shall deputize the Philippine National Police, National Bureau of
Investigation or Armed Forces of the Phitippines in the enforcement of any of its
decisions and orders. Orders and decisions issued under this Section may be
appealed to the pertinent appellate court but do not lose their effect pending the

outcome of the appeal.


The imposition of administrative penalties in the formal investigation is
without prejudice to the imposition of penalties in the criminal action or
judgment in the civil action.

SEC. 18, Administrative Investigation, — The Council shall conduct its
own administrative investigation for the purpose of obtaining information
relative to any activity that constitutes any past or present violation of this Act
and other fair trade laws. Administrative investigation may also be conducted
for the purpose of gathering and compiling trade information relative to the
nature, organization and resources of any person, firm, entity or association
doing business in or with the Philippines or a Philippine finn by determining
and evaluating the practices, acts, methods, schemes, arrangements and other
trade conditions prevailing in an industry

The officials authorized to conduct the preliminary or administrative
investigation, including formal investigation for purposes of administrative
adjudication shall have the power to administer oaths, issue subpoena duces
tecum 10 compel the attendance of witnesses and the production of necessary
papers and documents, and to punish direct and indirect contempt as provided
under the Rules of Court,

SEC. 19. Periodic Inspection, — The Council shall periodically conduct
an inspection of any of the following

a) Factory, shop, laboratory, establishment, store, warehouse, any
means of transportation, and the like;

b) Papers, documents and records found in such factory, shop,
laboratory, establishment, store, warehouse, any means of transportation, and
the like;

¢) Equipment, finished or unfinished products, raw materia

containers, labeling and other pertinent properties found in such factory, shop,
laboratory, establishment, store, warehouse, any means of transportation, and
the like; and

3) Activity being undertaken in such factory, shop, laboratory,
establishment, store, warebouse, any means of transportation, and the like,

which may be necessary t determine violation or which may aid in the


enforcement of this Act, other fair trade laws, or rules and regulations issued
pursuant thereto.

‘The officials authorized to conduct said inspection may obtain a
reasonable quantity of samples of the properties, except equipment, mentioned
in paragraph (c), to take pictures or video tapes of the places or things
mentioned in paragraphs (a) and (c) and secure copies of the papers mentioned
in paragraph (b).

All acts authorized under this Section shall be conducted at reasonable
promptness, in a professional manner and without undue disturbance to any
legitimate work or activity being undertaken inside the premises, Receipts shall
be issued for samples which may thereafter be so obtained.

SEC. 20. Advance Ruling. - Parties may apply to the Council for
advance ruling, binding on that office, regarding eligibility for exemption. If it
chooses to grant an advance ruling, the Council may include specified
conditions and requirements in its ruling, The advance ruling shall by its terms
exist for a specified period of time.

‘Advance rulings may be renewed upon application by the parties, An
advance ruling may be revoked or modified if:

a) A significant change in circumstances has occurred since the ruling;

b) The applicant infringed a condition or a requirement specified in the
ruling;

©) The decision to grant the ruling was materially influenced by
inaccurate, fraudulent or misleading data; or

d) The applicant abused the exemption granted to it,

‘The Council shall arrange for the publication of its advance ruling without
divulging any confidential information.

SEC. 21. Rutes on Confidentiatity and Conflict of Interest. — Officials
of the Council, as well as their agents and consultants, shall maintain the
confidentiality of all business, commercial or official information of which they
become aware during the course of their official activities, except that which is

otherwise public. Disclosure of such contidential information May occur in the

course of admi

istrative or judicial proceedings arising under this Act, or

otherwise as permitted by a court of competent jurisdiction.


All members of the Council shall inform the Office of the Chairman of
the Council of any position held or activity carried out in an economic field by
the member, including all agents thereof, The Chairman shall take all necessary
steps to ensure that there is no conilict of interest arising from such positions or
activities, including requiring that such positions are resigned or activities cease

SEC. 22, Control. - For the purpose of this Act, contro! is defined as the
ability to materially influence a firm, in particular, through: (a) ownership or the
right to use all or part of the assets of an undertaking; or (b) rights or contracts
which confer decisive influence on the composition, voting or decisions of the

organs of a lirm.

SEC. 23, Unfair Competition. - Unfair competition is prohibited,
including:
a)

harming the business interests of another {irm;

tribution of false or misleading information which is capable of

b) Distribution of false or misleading information to consumers,
including the distribution of information lacking a reasonable basis, related to
the price, character, method or place of production, propertics, suitability for use
or quality of goods;

c) False or misleading comparison of goods in the process of
advertising;

d) Fraudulent use of another’s trademark, firm name, or product
labeling or packaging;

¢) Unauthorized receipt, use or dissemination of confidential scientific,
technical, production, business or trade information; or

f) Collusion in business practices that are clearly against economic
efficiency and consumer welfare, such as price fixing, bid rigging, restriction of
output and market shares and allocation of geographic markets and customers.

SEC. 24. Restraint of Trade and Price Manipulation. Every
agreement or contract, combination in the torm of trust or otherwise, or
conspiracy, cxpressed or implicd, in restraint of trade or commerce inside the
country or with foreign nations or foreign territories, are hereby declared illegal

Tt shall be unlawful for any person to enter into, or to make, or to be a

Party to any such contract or combination or conspiracy, and any such person

10


shall be deemed guilty of an offense: Provided, That nothing in this Act shall

ing minimum price for the

render illegal, any agreement or contract prescti
resale of a commodity which bears or the label or container of which bears, the
trademark, brand, or name of the producer or distributor of such commodity and
which is in free and open competition with commodities of the same general
class produced or distributed by others: Provided, further, That the preceding
proviso shall not make lawful any agreement or contract, combination or
conspiracy providing for the establishment or maintenance of minimum resale
price on any commodity herein involved, between manvfacturers, or between
producers, or between wholesalers, or between brokers, or between factories, or
between retailers, or between persons, firms or corporations in competition with
each other

SEC. 25. Monopoly or Attempt to Monopolize. — \t shal] be unlawful for
any person to monopolize, or attempt to monopolize, or to combine or conspire,
expressly or impliedly, with any other person or persons, to monopolize any part
of the trade or commerce within the country, or with any foreign country or
territory, and any such person shall be guilty of an offense. Nothing in this Act
shall render unlawful the right of a patent holder or a copyright holder to enjoy
the benefit of its patent or copyright duly registered in the Philippines or in any
foreign country,

SEC. 26, Untawful Price Discrimination, — a) \t shall be unlawful for
any person engaged in commerce, in the course of such commerce, either
directly or indirectly, to discriminate in price between different purchasers of
commodities of like grade and quality, where cither or any of the purchasers
involved in such discrimination are in commerce, where such commodities are
sold for use, consumption, or resale within the Philippines, and where the effect
of such discrimination may be substantially to lessen competition or tend to
create a monopoly in any line of commerce, or to injure, destroy, or prevent
‘competition with any person who either grants or knowingly receives the benefit
of such discrimination, or with customers of either of them: Provided, That
nothing herein contained shall prevent differentials which make only due
allowance for differences in the cost of manufacture, sale, or delivery resulting
from the differing method or quantities in which such commodities are to such

n


purchasers sold or delivered: Provided, however, That the Secretary of Trade
and Industry in the case of non-agricultural commodities may, after due notice
to all interested parties, investigation and hearing, fix and establish quantity
limits, and revise the same as the Secretary finds necessary, as to particular
commodities or classes of commodities, where available purchasers in greater
quantities are so few as to render differentials on account thereof unjustly
discriminatory or promotive of monopoly in any line of commerce within the
jurisdiction of the Department of Trade and Industry

The foregoing shall not be construed to permit differentials based on
differences in quantities greater than those so fixed and established: Provided,
That nothing in this Act shall prevent persons engaged in selling goods, wares,
or merchandise in commerce from selecting their own customers in bona fide
transactions and not in restraint of wade: Provided, further, That nothing in this
Act shall prevent price changes from time (o time in response to changing,
conditions affecting the market for or the marketability of the goods, such as but
not limited to actual or imminent deterioration of perishable goods,
obsolescence of seasonal goods, distress sales under court process, or sales in
goad faith in discontinuance of business of the goods;

b) It shall be unlawful for any person engaged in commerce, in the
course of such commerce, to pay or grant, or to receive or accept, anything of
value as 4 commission, brokerage, or other compensation, or any allowance or
discount in lieu thereof, except for services rendered in connection with the sale
or purchase of goods, wares, or merchandise, either to the other party to such
transaction or to an agent, representative, or other intermediary thercin where
such intermediary is acting in fact for or in behalf, or is subject to the direct or
indirect control, of any party to such transaction other than the person by whom
such compensation is so granted or paid;

c) It shall be unlawful for any person engaged in commerce to pay or
contract for payment of anything of value to or for the benefit of a customer of
such person or in consideration for any services or facilities furnished by or
through such customer in connection with the processing, handling, sale, or
offering for sale of any products or commodities manufactured, sold, or offered

for sale by such person, unless such payment or consideration is available on

12


proportionally equal terms to all other customers competing in the distribution
of such products or commodities,

d) It shall be unlawful for any person to discriminate in favor of one
purchaser against another purchaser or purchasers of a commodity bought for
resale, with or without processing, by contracting to furnish or furnishing, or by
contributing to the furnishing of, any services or facilities connected with the
processing, handling, sale or offering for sale of such commodity so purchased
upon terms not accorded to all purchasers on proportionally equal terms;

) It shall be unlawful for any person engaged in commerce, in the
course of such commerce, knowingly to induce or receive a discrimination in
price which is prohibited by this Act; and

£) Upon proof being made, at any hearing on a complaint under this Act,
that there has been discrimination in price or services or (acilities furnished, the
burden of rebutting the prima-facie case thus made by showing justification
shal! be upon the person charged with a violation of this Act, and unless
justification shall be affirmatively shown, the Secretary of Trade and Industry is.
authorized to issue an order terminating the discrimination: Provided, however,
‘That nothing in this Act shall prevent a seller rebutting the prima-facie case thus
made by showing that the lower price or the furnishing of service or facility to
any purchaser or purchasers was made in good faith to meet an equally low
price of a competitor, or the service or facility furnished by a competitor.

SEC. 27. Prohibited Stipulations in Lease or Sales Contracts. - Yt shall
be unlawful for any person engaged in commerce, in the course of such
commerce, to lease or make a sale or contract for the sale of goods, ware,
merchandise, machinery, supply, or other commodity, whether patented or
unpatented, for use, consumption, or resale within the Philippines, or {ix a price
charged therefor, or discount from, or rebate upon, such price, on the condition,
agreement, or understanding that the lessee or purchaser shall not use or deal in
the goods, ware, merchandise, machinery, supply, or other commodity of a
competitor or competitors of the lessor or seller where the effect of such lease,
sale, or contract for sale or such condition, agreement, or understanding may be

to lessen competition or tend to create a monopoly in any line of commerce.


SEC. 28. Prohibited Stock or Asset Acquisition. — No person engaged in
commerce or in any activily affecting commerce shall acquire, directly or
indirectly, the whole or any part of the stock or other share-capital or the whole
ox any part of the assets of another person engaged also in commerce or in any
activity affecting commerce, where in any line of commerce or in any part of the
country, the effect of such acquisition may be substantially to lessen competition
or tend to create a monopoly.

SEC. 29. Prohibited Grant of Proxies or Voting Rights, - No person
shall acquire, directly or indirectly, the whole or any part of the stock or other
share capital, nor shall any person acquire the whole or any part of the assets of
one or more persons engaged in commerce or in any activity affecting
commerce in the country or in any part of the country, where the effect of
acquisition of such stock or assets, or of the use of such stock by the voting or
granting of proxies or otherwise, may be substantially to lessen competition, or
tend to create a monopoly.

This prohibition shall not apply to persons purchasing such stock solely
for investment and not using the same by voting or otherwise to bring about, or
in attempting to bring about, the substantial lessening of competition, Nor shall
anything in this Act prevent a corporation engaged in commerce or in any
activity affecting commerce from causing the formation of subsidiary
Corporations for the actual carrying on of their immediate lawful business, or the
natural and legitimate branches or extension thereof, or from owning and
holding all or part of the stock of such subsidiary corporations, when the effect
of such formation is not to substantially lessen competition.

Nothing contained in this Section shall be held to affect or impair any
right heretofore legally acquired or be held or construed to authorize or make
anything prohibited or made illegal by any anti-trust law of the Philippines,
Particularly Article 186 of the Revised Penal Code of the Philippines, nor
exempt any person from the penal provisions thereof or the civil remedies
provided therefor, if any.

SEC. 30. Prohibited Board Memberships. — No person shall be a
director in any two or more corporations engaged in whole or in part in

commerce in the Philippines at the same time, other than banks, banking

4


associations, investment companies, and trust companies, if such corporations
are or shall have been, by virtue of their business and location of operation,
eliminate competitors, so that the elimination of competition by agreement
between them would constitute a violation of any provisions of this Act or any
anti-trust law of the Phitippines, particularly Article 186 of the Revised Penal
Code of the Philippines.

SEC. 31. Exemption of Labor, Agricultural, or Horticultural
Organizations. The labor of a human being is not a commodity or article of
commerce. Nothing contained in this Act shall be construed to forbid the
existence and operation of any labor, agricultural or horticultural organizations
instituted for purposes of mutual help and not having capital stock or conducted
for profit, or to forbid or restrain individual members of such organizations from
lawfully carrying out the legitimate objects thereof, nor shall such organizations
or the members thereof be held or construed to be illegal combinations or
conspiracies in restraint of trade under this Act.

SEC. 32. Penalties. — a) Any person who shal! violate Section 9, 24 or
25 of this Act shall, for each and every such violation, be punished by a fine not
exceeding One million pesos (€11,000,000.00) if a natural person and Ten
million pesos ((10,000,000.00) if a corporation or association, or by
imprisonment not exceeding five (5) years, or both such fine and imprisonment,
in the discretion of the court;

b) Any person who shail violate Sections 26, 27, 28, 29, 30 or any
combination of such sections of this Act shall, for cach and every violation, be
Punished by a fine not exceeding Five million pesos ((J5,000,000.00), or by
imprisonment not exceeding three (3) years, or both such fine and
imprisonment, in the discretion of the court;

In all cases, if the offender is an association, corporation or any other
Juridical person, the penalty shall be imposed ou the chief operating officer,
President, secretary, treasurer, or any other person responsible for the violation,

If the offender is an alien, he shall, after service of sentence, be deported
immediately without further proceedings in the Bureau of Immigration.

SEC. 33. Imposition of a Higher Penalty. — \f the act committed is
punishable both under Article 186 the Revised Penal Code and this Act, the

is


penalties imposed under the provisions of the Revised Penal Code or under the
provisions of this Act, whichever is higher, shall be imposed.

SEC. 34, Exclusion of Civit Action from Criminal Action. — The
institution of a criminal action under this Act against a defendant shall not be
deemed to include any claim for damages in favor of any person that may have
suffered any monetary injury because of any violation of this Act

SEC. 35. Civil Action for Monetary Injury. — in addition to the penalties
provided in Section 32 of this Act, any person whose business or property
suffers monetary injury by reason of any prohibited acts under Sections 9, 24,
25, 26, 27, 28, 29 or 30 of this Act may institute a separate and independent civil
action, irrespective of the amount involved in the controversy, against the
defendant or defendants and shall recover threefold of the monetary injury
sustained and the cost of suit, including a reasonable attomey’s fee,

‘The complaint for the civil action may be filed or instituted in the
Regional Trial Court where the defendant or any of the defendants resides or is
found or has an agent, or in the Regional Trial Court where the plaintiff resides.
Any complaint for civil action that may be filed or instituted against a defendant
to recover monetary injury suffered as a consequence of a violation of this Act
shall be exempted from the payment of any filing fee.

SEC. 36. Government Civil Action. — In addition to any criminal action
that may be instituted against any defendant or defendants for any violation of
this Act, the Secretary of Justice may bring a civil action in the name of the
Republic of the Philippines, as parens patriae, on behalf of any natural person
residing in the Philippines, in any Regional Trial Court having jurisdiction over
the defendant, to secure treble damages for any monetary injury sustained by
such person by reason of any violation of this Act, plus the cost of suit and a
reasonable attomney’s (ee.

Any civil action brought by the Secretary of Justice under this Act in the
name of the Republic of the Philippines, as parens patriae, shall likewise be
exempted from the payment of any filing fee.

SEC. 37. Determination of Monetary Retief. — \n the event of successful
civil action brought by the Secretary of Justice, the Regional ‘Trial Court having,

Jurisdiction over the case shall exclude from the amount of the monetary relief

16


awarded in such action, the amount: (1) which duplicates amounts of monetary
relief that have been awarded for the same injury, or (2) which is properly
allocable to natural persons who have excluded their claims from the civil action
instituted by the Secretary of Justice in the name of the Republic of the
Philippines, and to any business entity.

SEC. 38, Notice by Publication. - In any civil action brought in the name
of the Republic of the Philippines, as purens patriae, the Secretary of Justice
shall, at such times and in such manner as the Regional Trial Court having
Jurisdiction may direct, cause notice thereof to be given by publication
However, if such Regional Trial Court finds that notice given solely by
publication would deny duc process of law to any person or persons, that court
may direct further notice to such persons according to the circumstances of the
case.

SEC. 39. Exclusion from the Suit, - Any person on whose behalf a civil
action has been brought by the Secretary of Justice under this Act in the name of
the Republic of the Philippines, as parens patriae, may elect to exclude from
adjudication the portion of the claim of the Republic of the Philippines for
monetary relief attributable to him by filing notice of such election with the
Regional Trial Court having jurisdiction over the civil action within such time as
specified in the notice given.

SEC. 40, Effect of Final Judgment. ~ ‘Vhe final judgment in an action
brought by the Secretary of Justice under this Act in the name of the Republic of
the Philippines, as parens parriae, shall be res judicata as to any claim by any
person on behalf of whom such action was brought and who fails to give the
notice of election under Section 39 of this Act within the period directed and
specified by the Regional Tal Court having jurisdiction of the case in
accordance with Section 35 of this Act

SEC. 41, Suit to Recover Its Own Damages. — Whenever the Republic of
the Philippines is

jured in its business or Property by reason of anything
forbidden or rendered unlawlul in this Act, it may sue thereon in the Regional
‘Trial Court in which the defendant or any of the defendants, if there are more

than one defendant, resides or has an ‘agent, without respect to the amount in

W


controversy and shall recover actual damages sustained by it including the cost
of suit
SE

not be dismissed or compromised without the approval of (he court having

42. Court Approval. — Any civil action filed under this Act shall

jurisdiction of the case, and notice of any proposed dismissal or compromise
shall be given to the public and to the parties in such manner as the court directs.

SEC. 43, Attorney's Fee. - In any civil action filed against a defendant
under this Act, the court having jurisdiction of the case may award a reasonable
attomey’s fee in favor of a prevailing defendant upon a finding that the
Secretary of Justice or the plaintiff has acted in bad faith, vexatiously, wantonly,
or for oppressive reasons,

SEC. 44, Methods to Prove and Assess Damages. — In any civil action
under this Act in which there has been a determination that a defendant agreed
to fix prices in violation of the provisions of this Act, damages may be proved
and assessed in the aggregate by statistical or sampling methods, by the
computation of illegal overcharges, or by such other reasonable system of
estimating aggregate damages as the court having jurisdiction of the case in its
discretion may pennit without necessarily proving the individual claim of, or the
amount of damage to, persons on whose behalf the suit was brought.

SEC, 45, Distribution of Monetary Retief. — The monetary relief
recovered in a civil action filed by the Secretary of Justice in the name of the
Republic of the Philippines, as parens patriae, in accordance with the provisions
of Section 36 hereof shall (1) be distributed in such manner as the Regional
‘Trial Court having jurisdiction of the case in its discretion may authorize; or (2)
be deemed a civil penalty by the Regional ‘Trial Court and deposited with the
National Treasury as a part of the general fimd of the government, subject in
either case to the requirement that any distribution procedure adopted by the
Regional Trial Court shall afford each person having an interest in the monetary
telief a reasonable opportunity to secure his appropriate portion of the net
monetary relief obtained.

SEC. 46. Effect of a Final Judgment. — Any {inal judgment or decree
rendered in any criminal action brought by or on behalf of the People of the

Philippines as well as any final judgment or decree rendered in any civil action

(8


brought by or on behalf of the Republic of the Philippines under this Act to the
wall be

effect that a defendant has violated any of the provisions of this Act
prima facie evidence against such defendant in any civil action brought by any
other party against such defendant under this Act as to all matters respecting
which said judgment or decree would be an estoppel as between the parties.
This Section shall not apply to consent judgment or decree as provided in
Section 47 of this Act, entered before any testimony has been taken.

SEC. 47. Proposal for a Consent Judgment. — At any time in the course
of a civil action brought by or on behalf of the Republic of the Philippines under
this Act, the Republic of the Philippines, through the Secretary of Justice, may
propose in a proper pleading to the defendant or defendants a consent judgment
by the latter based on the facts alleged by the parties in their respective
pleadings.

Any such proposal for a consent judgment for entry in such civil action
shail be filed with the Regional Trial Court having jurisdiction of the case. A
summary of the terms of the proposal for the consent judgment with a
competitive impact statement which shall recite (a) the nature and purpose of the
proceeding; (b) a description of the practices or events giving rise to the alleged
violation of this Act; (c) an explanation of the proposal for a consent judgment,
including an explanation of any unusual circumstances giving rise to such
Proposal or any provision contained therein, relief to be obtained thereby, and
the anticipated effects on competition of such relief: (d) the remedies available
to potential private plaintifis damaged by the alleged violation in the event that
such proposal for the consent judgment entered in such proceeding; (e) a
description of the procedure available for modification of such proposal; (f) a
description and evaluation of alternatives to such Proposal actually considered
by the Republic of the Philippines; and (g) a list of the materials and documents
which the Republic of the Philippines shall make available for purposes of
meaningful public comment, and the place where such materials and documents
are available for public inspection, shall be published at least sixty (60) days
Prior to the effective date of such consent judgment for seven (7) days over a

period of three (3) weeks in at least two (2) newspapers of general circulation,


Copies of the proposal for a consent judgment or any other materials and
documents which the Republic of the Philippines considered determinative in
formulating ils proposal for a consent judgment sball be made available to the
public at the Regional Trial Court having jurisdiction of the case.

SEC. 48. Comments to the Proposal for a Consent Judgment, — During
the sixty (60) day period mentioned in Section 47 hereof, and such additional
time as the Republic of the Philippines may request and the Regional ‘Trial Court
may grant, the Republic of the Philippines shall receive and consider any written
comments relating to the proposal for the consent judgment filed with the
Regional Trial Court having jurisdiction of the case in accordance with Section
47 of this Act. At the close of the period during which such comments may be
received, the Republic of the Philippines shall file with the Regional ‘Trial Court

having jurisdiction of the case a response to such comments not later than thirty

(30) days from the date the last comment was filed with the Regional ‘I
Court.

SEC. 49. Duty of the Regional Triat Court. - Before entering any
consent judgment proposed by the Republic of the Philippines under Section 47
of this Act, the Regional Trial Court having jurisdiction of the case shall
determine that the entry of such judgment is in the public interest.

For purposes of determining that the entry of such judgment is in the
public interest, the Regional ‘Irial Cour. may consider: (a) the competitive
impact of such judgment, including termination of alleged violations, provisions
for enforcement and modification, duration or relief sought, anticipated effects
of alternative remedies actually considered, and any other considerations
bearing upon the adequacy of such judgment; and (b) the impact of entry of such
judgment upon the public generally and individuals alleging specitic injury from
the violations set forth in the complaint, including consideration of the public
benefit, if any, to be derived from the determination of the issues at the trial.

SFC. 50. Powers of the Regional Triat Court. — In making its
determination under Section 49 of this Act, the Regional Trial Court may: (a)
take the testimony of government officials or experts or such expert witnesses,
as the Regional Trial Court may deem appropriate; (b) appoint such outside

consultants or expert witnesses as the Regional Trial Court may deem

20


appropriate; (c) request and obtain the views, evaluations, or advice of any
individual, group, or agency of the government with respect to any aspects of
the proposed consent judgment or the effect of such consent judgment, in such
manner as the Regional ‘rial Court having jurisdiction of the case deems
appropriate; (d) authorize full or limited participation in the civil proceedings
before the Regional Trial Court having jurisdiction of the case by interested
persons or agencies of the government, including appearance of amicus curiae,
intervention as a party pursuant to the provisions of the Rules of Court,
examination of witnesses or documentary materials, or participation in any other
manner and extent which serves the public interest as the Regional ‘Irial Court
having jurisdiction of the case may deem appropriate; (¢) review any comments
including any objections filed with the Republic of the Philippines concerning
the proposed consent judgment and the responses of the Republic of the
Philippines to such comments and objections, in accordance with the provisions
of Section 48 of this Act; and (f) take such other action in the public interest as
the Regional Trial Court may deem appropriate.

51, Certifications of the Defendants. Not later than fifteen (15)
days following the date of the filing of any proposal for a consent judgment
under Section 47 of this Act, each defendant shall file with the Regional Trial

Court having jurisdiction of the case a description of any and all written or oral

communications made by or on behalf of such defendants, including any and all
written or oral communications relevant to such proposal filed on behalf of such
defendants with any officer or employee of the Republic of the Philippines
except that any such communications made by counsel of record with the
Secretary of Justice or the employees of the Department of Justice shall be
excluded fiom the requirements of this Section. Prior to the entry of any
consent judgment pursuant to this Act, each defendant shall certify under oath to
the Regional Trial Court having jurisdiction of the case thal the requirements of
this Section have been complied with and that such filing is a true and complete
description of such communications known to the defendant or which the
defendant reasonably should have known.

SEC. 52. Evidential Value of Proceedings in a Proposal far a Consent

Judgment, — Proceedings in a proposal for a consent judgment before the

a


Regional Trial Court having jurisdiction of the case, shall not be admissible
against any defendant in any other action or proceeding brought by any other
party against such defendant nor constitute a basis for the introduction of the
consent judgment as a prima facie evidence against the defendant in such other
action or proceeding.

SEC. 53. Statute of Limitations. — Any civil or criminal action to enforce
any cause of action arising from a violation of any provision of this Act shall be
forever barred unless commenced within five (5) years after the cause of action
accrued. Whenever any civil or criminal proceeding is instituted by the
Republic of the Philippines in case of a civil action or by the People of the
Philippines in case of a criminal action to prevent, restrain, or punish any
violation of any provision of this Act, the running of the statute of limitation
provided herein shall, in respect of every private or sovereign right of action
arising under this Act and based in whole or in part on any matter complained of
in said proceeding, be suspended during the pendency thereof and for one year
thereafter.

SFC. 34. Separabitity Clause. — Should any part or section of this Act be
declared invalid or unconstitutional, other provisions not affected thereby shall
remain in full force and effect.

s

EC, 55. Repeating Clause. — All laws, decrees, orders, rules and
regulations and other issuances or any part thereof, which are inconsistent with
the provisions of this Act are hereby repealed or modified accordingly.

SEC, 56. Effectivity. — This Act shall take effect filleen (15) days after
publication in the Official Gazette or in two (2) national newspapers of general
circulation.

Approved,

22


te

Republic of the Philippines

House of Representatives
Quezon City, Metro Manila

FIFTEENTH CONGRESS
First Regutar Session

HOUSE BILLNO.__9534

Introduced by Rep. Lorenzo R. Tafiada lil

EXPLANATORY NOTE

Article Xi, Section 19 of the 1987 Constitution of the Republic of the
Philippines mandates that "The State shail regulate or prohibit monopolies when
the public interest so requires. No combinations in restraint of trade or unfair
competition shall be allowed". Section 22 thereof states that “Acts which
circumvent or negate any of the provisions of [Article Xil] shall be considered
inimica! to the national interest and subject to criminal and civil sanctions as
may be provided by law". To this end, the Conslilution directs the State to
protect Filipino enterprises against unfair competition and trade practices.

With the government's push to dereguiate and privatize state-owned
public utilities and to promote micro, smal) and medium enterprises and
considering that laws goveming anticompetitive behavior, monopolies,
combinations in restraint of trade and other frauds in commerce and industry,
Provide inadequate penalties to deter violations thereof, coupled with lack of
effective enforcement mechanism and that there Is a need to regulate a
market scheme wherein competition forces the Players to produce products of
high quality and in lower prices, the Passage of this bill is, therefore, imperative.

The purpose of the bill is to provide a comprehensive and general law
which shall regulate anticompetitive behavior and business practices unfettered
by fimitations based on self-interest, by strengthening prohibitions against
monopofies, cartels, combinations in festraint, of trade and other anti-
competitive practices and conduct, as a means of attaining a more equitable


distribution of opportunities, income and wealth, while recognizing permissible
concerted actions that need not be curtailed by an antitrust law.

The bil is distinctive as it promotes competition in the market, with utmost
consideration for the development of micro, small and medium enterprises, by
Classitying price discrimination as a form of illegal trade practice and by
enumerating contracts, concerted actions or combinations in restraint of trade,
while distinguishing mere growth or development as a consequence of a
superior product, business acumen or historic accident. Finally, the bill
completes and harmonizes cument laws of the country with respect to
intellectual property, corporations, right to form organizations and the right to
collective bargaining.

His, therefore, eamestly requested that this bill be urgently approved.

ToS
R Tomheg—
LORBAZO R. TANADATII
Representative

4M District, Quezon


Republic of the Philippines

House of Representatives
Quezon City, Metro Manila

FOURTEENTH CONGRESS
First Regular Session

HOUSE BILLNO._ 3534

Introduced by Representative Lorenzo R. Tafiada Il!

AN ACT PRESCRIBING AN ANTITRUST LAW TO STRENGHTEN THE PROHIBITION AGAINST
MONOPOLIES, CARTELS, COMBINATIONS IN RESTRAINT OF TRADE AND OTHER
ANTICOMPETITIVE PRACTICES AND CONDUCT, AND FOR OTHER PURPOSES.

SECTION 1. Title - This Act shat! be known as the “Philippine Antitrust Act”.

SECTION 2. Decioration of Policy - It is the declared Policy of the State fo 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. .

SECTION 3. Definition of Terms — As used in this act. the following terms shall be taken
to mean as follows:

a. Antitrust Laws — this Act, statutes and all other statutes hereinafter enacted by
Congress relating to or goveming monopolies, cligopolies, cartels,
combinations. contracts and/or agreements or aangements in restraint of
trade. production, commerce or industry or which make available to national
cr local governments, or any private person whose righls have been orin
danger of being impaired, any civil and/or criminal remedies or administrative
proceedings before the Regional Trial Court or administrative agency with
respect fo any act, contract, agreement, rule, control, course of conduct. or
other activity by, between or among persons constituting a restraint upon or
monopolization of domestic or foreign trade, commerce or industry or
methods of competition in or affecting such trade, commerce or industry.


b, Person — any natural person, firm, company. corporation, society, association,
partnership, joint-stock company, or any other legal entity including any
Person acting under color of authority of law,

¢. Commerce — intercourse by way of trade and traffic between different
regions, provinces, towns of cities in the Philippines and the citizens or
inhebitants thereof, including not only the purchase, sale and exchange of
commodities, goods, articles, services, productions or Property of any kind,
but also the instrumentalities and agencies by which it is promoted and the
means and modes by which it is carried on.

d. Export trade — trade or commerce in goods, wares, merchandise or object of
trade, commerce or industry exported, or in the course of being exported
from the Philippines to any foreign country.

. Implementing Agencies — shai refer to administrative agencies vested by law
with jurisdiction to regulate competition and grant administrative refief in
specific industries and/or sectors.

Industry - any department or branch of art, occupation or business
conducted as a means of livelihood or for profit, especially one which
employs much labor and capital and is a distinct branch of trade.

g. Trade - mercantile or commercial business in general, or the buying and
selling, exchanging, of commodities and services, either by wholesale or retail,

. Trusts — an association or combination of persons or corporations having the
intention and power, or the tendency to create a monopoly, control
Production, interfere with the free course of trade, or to fix and regulate the
supply and the price of commodities and services.

Unfafr trade practices ~ refers to any act that impedes fair competition such
gs unjustly discriminating between persons, dealing at unjust prices, unjustly
inducing or coercing customers of a competition to deal with oneself, dealing
with another party on such terms as will unjustly restrict the business activities
of the said party, and dealing with another party by unjust use of one’s
bargaining position.

r)

>

SECTION 4, Contracts, Concerted Actions or Combinations in Restraint of Trade — It
shall be unlawful for any person fo enter into any contract or agreement or shall take
Part in any conspiracy or combinations in the form of trusts or otherwise or any other
form of mutual understanding with a competing person.

@. To limit unduly the facililies for transporting, producing, manufacturing,
supplying, storing or dealing in any product;

b. To prevent, limit or lessen, by artificial means, the manufacture or Production
of a product or to enhance unreasonably the price thereof;

¢. To prevent or lessen, unduly, competition in the production, manufacture,
purchase, barter, sale, storage, rental, transportation or supply of a product,
orin the price of insurance on persons or property; or .

d. To otherwise restrain oF injure competition through unfair trade practices.


SECTION 5. Monopoly or Atiempt fo Monopolize - It shall be unlawful for any person
10 monopolize, or attempt to monopolize, or 10 combine or conspire, expressly or
impliedly, with any other person or persons, to monopolize any part of the trade or
commerce within the country, or with any foreign country or temtitory. Provided, that
nothing contained in this Act shalt render unlawtul the right of a patent holder ora
copyright holder to enjoy the benefit of his or ifs patent or copyright duly registered in
the Philippines or in any foreign country with which the Philippines is a co-signatory to
any treaty or convention that protects the rights to an invention, patent, or toa
copyright as the case may be.

As prohibited in this Act, it has two elements: {1} possession of monopoly power in
felevant markets, and {2} willful acquisition or maintenance of that power to exclude
competitors from any part of trade, commerce or industry, as distinguished from

growth or development as a consequence of a superior product, business acumen
or historic accident.

SECTION 6. Price aiscrimination - It shall be considered an illegal trade practice fora
person engaged in business to be party or privy to:

a. Any sale that discriminates to his knowledge. directly or indirectly, against
competitors of a purchaser of articles from him in that any discount. rebate.
allowance, price concession or other advantage is granted to the purchaser
over and above any discount, rebate, allowance, price concession or other
advantage that, at the time the arficies are sold to the purchaser, is available
to the competitors in respect of a sale of articles of like quantity and quality;

b. Engage in the policy of selling products in areas of the Philippines at prices
lower than those exacted by him elsewhere in the country, having the effect
or tendency of substantially lessening competition or eliminating a competitor
in that part of the Philippines, or designed to have that effect;

¢. Engage in a policy of selling products at prices unreasonably low, having the
effect or tendency of substantially lessening competition or eliminating a
competitor, or designed to have that effect,

SECTION 7. Bid-Rigging - No person shall enter into an agreement or arrangement
whereby one or more of those persons agree or undertake not to submit a bid in
response to a call orrequest for bids or fenders: or shall agree to make a submission
of bids or tenders arrived at by agreement or arrangement between or among two
or more bidders or tenderess in response to a call or request for bids or tenders.

SECTION 8. Permissible Concerted Action — Contracts, agreement resulting to
concerted action between competing persons is permissible only upon approval
and determination by the proper implementing agencies that the planned
concerled action shall be beneficial to the economy as a whole and in the public
interest, Applications for permissible concerted action may be made for the
following purposes:


SECTION 5. Monopoly or Attempt to Monopoiize ~ It shall be unlawful for any person
to monopolize, or attempt to monopolize, or to combine or conspire, expressly or
impliedly, with any other person or persons, to monopolize any parl of the trade or
commerce within the country, or with any foreign country or tenitory. Provided, that
nothing contained in this Act shall render unlawful the tight of a patent holder or a
copyright holder to enjoy the benefit of his or its patent or copyright duly registered in
the Philippines or in any foreign country with which the Philippines is a co-signalory to.
‘any treaty or convention that protects the righis to an invention, patent, or toa
copyright as the case may be.

As prohibited in this Act. it has two elements: (1) possession of monopoly power in
relevant markets, and {2} willful acquisition or maintenance of that power to exclude
competitors from any part of trade, commerce or industry, as distinguished from
growth or development as a consequence of a superior product, business acumen
or historic accident.

SECTION 6. Price discrimination —It shal! be considered an illegal trade practice fora
Person engaged in business to be party or privy to:

. Any saie that discriminates to his knowledge, directly or indirectly, against
competitors of a purchaser of articles from him in that any discount, rebate.
allowance, price concession or other advantage is granted to the purchaser
over and above any discount, rebate, allowance, Price concession or other
advantage that, al the time the articles are sold to the purchaser, is available
to the competitors in respect of a sale of articles of like quantity and quality:

. Engage in the policy of selling products in areas of the Philippines at prices
lower than those exacted by him elsewhere in the country, having the effect
or tendency of substantially lessening compelition or eliminating a competitor
in that part of the Philippines, or designed to have ihat effect;

¢. Engage in a policy of selling products at prices unreasonably low, having the

effect or tendency of substantially lessening competition or eliminating a
competitor, or designed to have that effect.

fo

SECTION 7. Bid-Rigging - No person shall enter into an agreement or anangement
whereby one or more of those persons agree or undertake not to submit a bid in
response fo a call or request for bids or tenders; or shall agree to make a submission
Of bids or tenders arrived at by agreement or arrangement between or among two
or more bidders or tenderers in response to a call or request for bids or tenders.

SECTION 8. Permissible Concerted Action - Contracts, agreement resulting io
Concerted action between competing persons is permissible only upon approval
and determination by the proper implementing agencies that the planned
concerted action shall be beneficial to the economy as a whole and in the public
interest. Applications for permissible concerted action may be made for the
following purposes:


ga. Unitying the specifications or models of goods for the purpose of reducing
costs, improving quality, or increasing efficiency;

. Joint research and development on goods or markets for the purpose of
upgrading technology. improving quality, reducing costs, or increasing
efficiency; . .

¢. Arrangements to develop a separate and specialized area for the purpose of

rationalizing operations;

d. Entering into agreements conceming solely the competition in foreign

markets for the purpose of securing or promoting exports:

e. Joint acts for the purpose of improving operational efficiency or

strengthening the competitiveness of small and medium enterprises.

o

SECTION 9. Acquisitions of Corporate Stocks and Assets’ — No person engaged in
commerce or in any activity affecting commerce shall acauire, directly or indirectly,
the whole or part of the stock or share capital, or acquire the whole or any part of
the assets of another person engaged also in commerce or in any activity affecting
commerce, where in any line of commerce orin any activity affecting commerce in.
any section of the country, the effect of such acquisition may be substantially to
lessen compelition or tend to create a monopoly. Provided, this section shall not
apply fo persons purchasing such stock solely for investment and not using the same
by voting or otherwise to bring about, or in attempting to bring about, the substantial
lessening of competition. Nor shall anything contained in this section Prevent a
corporation engaged in commerce or in any activity affecting commerce from
causing the formation of subsidiary corporations for the actual carrying on of their
immediate lawiul business, or the natural and legitimate branches of extensions
thereof, or from owning and holding alt or part of the stock of such subsidiary
corporations, when the effect of such formation is not to substantially lessen .
competition,

SECTION 10. infertocking Directors ~ No person shall, at the same time, serve as a
director or officer in any two corporations that are engaged in whole or in part in
commerce and by virtue of their business and location of operation, competitors, to
the effect that an agreement to eliminate competition between them would
constitute a vioiation of any antitrust law except:

G. Between parent and subsidiary companies;

b. Between or among affiliates defined to mean ownership by one of not less
than fwenly percent (20%) but not more than fifly percent {50%} if the shares
of stock of the other;

c. The co-venturers in joint venture companies; and

d. Family corporations.

SECTION 11. Labor, Agricultural or Horticultural Organizations — the labor of a human
being is not a commodity or Article of commerce. Nothing contained in this Act,


therefore shal! be construed to forbid the existence and operation of any labor,
agricultural or horticultural organizations, instituted for purposes of mutual help, and
not having capital stock or conducted for profit, or to forbid, restrain, individual
members of such organizations from lawfully carrying out the legitimate objects
thereof; nor shall such organizations, or the members thereof, be helct or construed as
to be illegal combinations of conspiracies in restraint of trade.

SECTION 12. Collective Bargaining - Nothing in this act shall apply to combinations or
activities of workmen or employees for their own reasonable Protection as such
workmen or employees and contracts, agreements or arrangements between or
among two or more employers in a trade. industry, or profession, whether effected
directly between or among the employers or through the instrumentality of a
Corporation or association of which the employers are members, pertaining to
collective bargaining with their emptoyees in respect of salary or wages and terms or
conditions of employment.

SECTION, 13. Liability of Directors, Officers and Agents - 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 who shall have

authorized, ordered, or done any of the acts constituting in whoie or in part such
violation. .

SECTION 14. Penaities for Violations - Any person found guilty of committing any acts
in violation of sections 4, 5, 6 and/or 7 or any combination of such sections of this Act.
shall, for each violation be punished by a fine not exceeding twenty milion pesos
(Php 20,000,000.00) if a corporation or association, or, four million pesos {Php
4,000,000.00) if a natural person, or imprisonment not exceeding five {5} years or both
fine and imprisonment in the discretion of the court.

Any person found guilty fo have violated Sections 9 and/or 10 of this Act or any
combination of such sections, shall for each and every violation, be punished by a
fine not exceeding five million pesos. {Php 5,000,000.00}, or by imprisonment not

exceeding two (2) years, or both fine and imprisonment upon the discretion of the
court.

SECTION 15. Jurisdiction - The Regional Trial Court shall have original jurisdiction to try
and decide all criminal and civil cases involving violations of this Act. Any
administrative agency that is vested by law with Jurisdiction to grant administrative
felief in specific cases shall continue to exercise such jurisdiction, however availment
of a remedy under this Act shall not be precluded if it be found more convenient,
adequate and expeditious for his immediate protection and relief.

SECTION 16. Jurisdiction of Specialized Agencies - The exclusive and originat
jurisdiction conferred upon by law to specialized agencies to regulate, enforce


competition laws, and handle administrative cases on specific industries shall be
discharged by the specialized agency concemed.

SECTION 17. Exciusion of Civil Action from the Criminal Action - The institution of a
criminal action under this Act against a defendant shall not be deemed to include
any claim for damages in favor of any person that may have suffered any monetary
injury because of any violation of this Act.

SECTION 18. Private Suits for Monetary Injury ~ Any person who may be injured in his
business or property by reason of the violation of any provision of this Act or its
‘implementing rules and regulations may sue in the Reglonal Trial Court in the
Principal place of business of the defendant/s. regardless of the amount in
controversy, He shall be entitled to recover not more than threefoid the damages
sustained by him, plus the costs of suit, including reasonable attomey’s fees at the
discretion of the Court.

SECTION 19. Parens Patriae Suit - In addition fo the criminal action instituted by the
Secretary of Justice, 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 by reason
of any violation of this Act.

Any person on whose behalf a civil action has been brought by the Secretary of
Justice under this Act in the name of the Republic of the Philippines may elect to
exclude from adjudication the portion of the claim of the Republic of the Philippines
for monetary relief attributable to him by filing such notice of election with the
Regional Trial Court having jurisdiction over the civil action within such time specified
the rules.

SECTION 20, Effect of a Fina! Judgment in a Parens Patrice Suit — The final judgment
rendered in a parens patriae suit shall be res judicata as to any claim by any person
on behalf of whom such action was brought by the Republic of the Philippines and
who fails to give a notice of election to exclude from adjudication his portion of the
monetary relief,

SECTION 21. Suit of the Republic of the Philippines to Recover its Own Damages -
Whenever the Republic of the Philippines is hereafter injured in its business or property
by reason of anything forbidden or rendered unlawful in this Act, it may sue
correspondingly sue the defendants in the proper Regional Trial Court for the
recovery of actual damages sustained by it and the costs of suit, .

SECTION 21. Evidential Effect of a Final Judgment Rendered in a Criminal Coase - Any
final judgment or decree rendered in any criminal action brought by the Peopte of
the Philippines, or any civil action instituted on behalf of the Republic of the
Philippines to the effect that the defendant was found to have violated any provision


of this Act shat! be prima tacie evidence against such defendant in any civil action
brought by any party against such defendant under this Act. This Section shalt not
‘apply fo any consent judgment or degree entered into by the parties concemed.

SECTION 22. Consent Judgment - At any time in the course of a civil action brought
by or on behalf of the Republic of the Philippines under this Act, the Republic of the
Philippine through the Secrefary of Justice, may propose in a proper pleading to the
defendant or defendants a consent judgment. Any such proposal for consent
judgment must be filed with the Regionat Trial Court having jurisdiction over the case.
The Regional Trial Court shall comespondingly evaluate and examine the Proposal for

consent judgment and determine if entry of such judgment shalll be in the public
interest.

In making its determination, the Regional Trial Court may: [1) take the testimony of
the govemment officials or such expert witnesses, as the Regional Trial Court may
require: (2) appoint such outside consultants; (3) request and obtain the views,
evaluations, or advice of any individual group, or agency of the government with
respect to any aspects of the proposed consent judgment or the effect of such
consent judgment: (4) authorize full or limited participation in the civil proceedings
before the Regional Triai Court having jurisdiction of the case by interested persons or
agencies of the government, including the appearance of amicus curiae,
intervention as a party pursuant to provisions of the Rules of Court, examination of
witnesses or documentary materials, of participation any other manner and extent
which serves the public interest as the Regional Irial Court may deem appropriate.

SECTION 23. Prescription — Any criminal. civil action of any private suit, shall be bared
unless commenced within five (5) years from the discovery of the crime or of the act
or agreement giving rise to the cause of action, or which would be ai valid basis for
the commencement of any legal action.

SECTION 24. Separability Clause — Any portion or provision of this Act that may be
declared unconstitutional shalt not have the effect of nullifying other portions or
Provisions hereof, as long as such remaining portions or pravisions can still subsist and
be given effect in their entirety.

SECTION 25. Repeating Clouse - All provisions of law, orders, decrees, executive
orders, including rules and regulations or parts thereof which are contrary to or
inconsistent with the provisions of this Act are hereby repealed or modified
accordingly,

SECTION 26. Effectivity — This Act shall take effect after fifteen (15) days from the
completion of its publication in at least two (2) newspapers of general circulation.


Kepublic of the Pnutsppines
HOUSE OF REPRESENTATIVES
‘Quezon City
FIFTEENTH CONGRESS
First Regular Session
3985 .

HOUSE BILL NO,

Introduced by Honorable EDUARDO R. GULLAS

EXPLANATORY NOTE

‘This bill seeks to provide a comprehensive law to regulate anti-competitive behaviour and
business practices, free of limitations as self-interest, and (o strengthen prohibitions against
monopolies and cartels, thereby attaining equal distribution of opportunities, income and wealth.
More importantly, Article XI, Sections 19 and 22 of the 1987 Philippine Constitution calls for
the government to protect Filipino enterprises against unfair competitions and trade practices.

‘This bill shall augment the government efforts to deregulate and privatize state-owned utilities
by providing adequate prohibitions and efficient enforcement mechanism to deter violations as
provided in the Constitution.

This bil shall also regulato a market scheme whére stiff competition among the entrepreneurs
Will produce high quality goods at lower prices.

Hence, the approval of this bill is camestly sought.

EDU: R


HOUSE OF REPRESENTATIVES
Quezon City
FIFTEENTH CONGRESS
First Regular Session

House sino, 8985

Introduced by Honorable EDUARDO R. GULLAS

AN ACT
PRESCRIBING AN ANTITRUST LAW TO STRENGTHEN THE PROHIBITION
AGAINST MONOPOLIES, CARTELS, COMBINATIONS IN RESTRAINT OF TRADE
AND OTHER ANTICOMPETITIVE PRACTICES AND CONDUCT, AND FOR OTHER
PURPOSES.

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

SECTION 1. Title — This Act shall be known as the “Philippine Antitrust Act”.

SECTION 2. Declaration of Policy — 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.

SECTION 3. Definitions of Terms — As used in this act, the following terms shall be taken to
mean as follows:

@ Antitrust Laws — this Act, statutes and all other statues hereinafter enacted by
Congress relating to or governing manopolies, oligopolics, cartels. combinations,
contracts and/or agreements or arrangements in restraint of trade, production ,
commerce or industry or which make available to national or local governments, or
any private person whose rights have been or in danger of being impaired, any civil
and/or criminal remedies or administrative proceedings before the Regional Trial
Court or administrative agency with respect to any act, contract, agreement, rule,
control, course of conduct, or other activity by, between or among persons constituting
3 restraint upon or monopolization of domestic or foreign trade, commerce or
industry of methods of competition in or affecting such trade, commerce or industry.

5. Person ~ any natural person, firm, company, corporation, socicty, association,
Partnership, joint-stock company, or any other legal entity including any person acting
under color or authority of law.

¢. Commerce — intercourse by way of trade and traffic between different. regions,
Provinces, towns of cities in the Philippines and the citizens or inhabitants thereof.
including not only the purchase . sale and exchange of commodities, goods, articles,

services, productions or property of any kind, but also the instrumeatalities and

agencies by which it is promoted and the means and modes by whiich it is carried on.


4. Export trade ~ trade or commerce in goods, wares, merchandise or object of trade,
commerce or industry exported, or in the course of being exported from the
Philippines to any foreign country.

e. Implementing Agencies — shall refer to administative agencies vested by law with
Jurisdiction to regulate competition and grant administrative relief in specific
Industries and/or sectors.

{Industry — any department or branch of art, occupation or business conducted as a
means of livelihood or for profit, especially one which employs much labor and
capital and is a distinct branch of trade.

2. Trade - mercantile or commercial business in general, or the buying and selling,
‘exchanging of commodities and services, either by wholesale or retail

bh. Trusts - - an association or combination of persons or corporations having the
intention and power, or the tendency to create a monopoly, cootrol i
interfere with the free course of trade, or to fix and regulate the supply and the price of
commodities and services.

i. Unfair trade practices ~ - refers to any act that impedes fair competition such as
unjusily discriminating between persons, dealing at unjust prices, unjustly inducing or
coercing customers of a competition to deal with oneself, dealing with another party
‘on such terms as will unjustly restrict the business activities of the sald party, and
dealing with another party by unjust use of one’s bargaining position.

SECTION 4. Contracts, Concerted Actions or Combinations in Restraint of Trade — it shall be
unlawful for any person to enter inio any comtract or agrecment or shall take part in any
conspiracy or combinations in the form of trusts or otherwise or any other form of mutual
understanding with a competing person.

a. To limit unduly the facilities for transporting, producing, manufacturing, supplying,
storing or dealing in any product;

b. To prevent, limit or lessen, by artificial means, the manufacturer or production of a
product or to enhance unreasonably the price thereof;

¢. To prevent or lessen, unduly, competition in the production, manufacturer, purchase,
barter, sale, storage, rental, transportation or supply of a product, or in the price of
insurance on persons or property; or

d. To otherwise restrain or injure competition through unfair trade practices.

SECTION 5. Monopoly or Attempt to Monopolize — It shail be unlawful for any person to
‘monopolize, or aticmpt to monopolize, or to combine or conspire, expressly or impliedly, with
any other person or persons, to monopolize any pant of the trade or commerce within the country,
ot with any foreign country, or territory. Provided, that nothing contained in this Act shall render
unlawful the right of a patent holder or a copyright holder to enjoy the benefit of bis patent or
copyright duly registered in the Philippines or in any foreign country with which the Philippines
is a co-signatory to any treaty or convention that protects the rights to an invention, patent, or to
a copyright as the case may be.

As prohibited in this Act, it has (wo elements: (1) possession of monopoly power in relevant
markets, and (2) wilful acquisition or maintenance of that power to exclude competitors from
any part of trade, commerce or industry, as distinguished from growth or development as &
consequence of a superior product, business acumen or historic accident.



SECTION 6. Price discrimination — It shall be considered an illegal trade practice for a person
‘engaged in business to be a party or privy to:

a. Any sale that discriminates to bis knowledge, directly or indirectly, against
competitors of a purchaser of articles from him in that any discount, rebate allowance,
price concession or other advantage is granted to the purchaser over and above any
discount, rebate, allowance, price concession or other advantage that, at the time the
articles are sold to the purchaser, is available to the competitors in respect of a sale of
artictes of like quantity and quality;

b. Engage in the policy of selling products in areas of the Philippines at prices lower
than those exacted by him elsewhere in the country, having the effect or tendency of
substantially lessening competition or eliminating a competitor in that part of the
Philippines, or designed to have that effect;

c. Engage in a policy of selling products at prices unreasonably low, having the effect or
tendency of substantially lessening competition or eliminating a competitor, or
designed to have that effect.

SECTION 7. Bid-Rigging — No person shall enter into an agreement or arrangement whereby
one oF more of those persons agree or undertake not to submit a bid in response to a call or
request for bids or tenders; or shall agree to make a submission of bids or tenders arrived at by
‘agreement or arrangement between or among two or more bidders or tenderers in response to a
call or request for bids of tenders.

SECTION 8. Permissible Concerted Action — Contracts, agreement resulting to concerted action
between competing person is permissible only upon approval and determination by the proper
implementing agencies that the planned concerted action shall be beneficial to the economy as a
whole and in the public interest. Applications for permissible concerted action may be made for
the following purposes:

4. Unifying the specifications or models of goods for the purpose of reducing casts,
improving quality, or increasing efficiency;

b. Joint research and development on goods or markets for the purpose of upgrading
technology, improving quality, reducing costs, or increasing efficiency;

c. Arrangements to develop a separate and specialized area for the purpose of
rationalizing operations;

4. Entering into agreements conceming soley the competition in foreign markets for the
purpose of securing or promoting exports;

€. Joint acts for the purpose of improving operational efficiency or strengthening the
competitiveness of small and medium enterprises.

SECTION 9. Acquisitions of Corporate Stocks and Assets — No person engaged in commerce or
in any activity affecting commerce shall acquire, directly or indirectly, the whole or part of the
stock or share capital, or acquire the whole of any part of the assets of another person engaged
also in commerce or in any activity affecting commerce, where in any line of commerce or in
any activity affecting commerce in any section of the country, the effect of such acquisition may
be substantially (0 lessen competition of tend to create a monopoly. Provided, this section shall
not apply to persons purchasing such stock solely for investment and not using the same by
voting or otherwise to bring about, or in attempting to bring about, the substantial lessening
competition. Nor shall anything contained in this section prevent a corporation engaged in
commerce of in any activity affecting commerce from causing the formation of subsidiary


corporations for the actual carrying on of their immediate lawful business, or the natural and
legitimate branches of extensions thereof, or from owning and holding alt or part of the stock of
such subsidiary corporations when the effect of such formation is not substantially lessen

SECTION 10. Interlocking Directors ~ No person shall, at the same time, serve as a director or
officer in any two corporations that are engaged in whole ot in part in commerce and by virme of
their business and location of operation, competitors, to the effect that an agreement to climinate
competition between them would constitute a violation of any antitrust law except:

8, Between parent and subsidiary companies;

b. Between or among affiliates defined to mean ownership by one of not less than
twenty percent (20%) but not more than fifty percent (50%) af the shares of stock of
the other,

¢. The co-ventures in joint venture companies; and

4. Family corporations.

SECTION I. Labor, Agricultural or Horticultural Organizations - The labor of a human being
is not a commodity or Article of commerce. Nothing contained in this Act, therefore shall be
construed to forbid the existence and operation of any labor, agricultural or horticultural
organizations, instituted for purposes of mutual help, and not having capital stock or conducted
for profit, or to forbid, restrain, individual members of such organizations from lawfully carryi
Out the legitimate objects thereof: nor shall such organizations, or the members thereof, be held
oF construed as to be illegal combinations of conspiracies restraint of trade.

SECTION 12. Collective Bargaining — Nothing in this act shall apply to combinations or
activities of workmen or employees for their own reasonable protection as such workmen or

SECTION 13. Liability of Directors, officers and Agents - Whenever a corporation shalt 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 who shall have authorized, ordered, or done any
of the acts constituting in whole or in part such violation.

SECTION 14. Penalties for Violations — Any person found guitty of commiting any acts in

violation of section 4, 5, 6 and/or 7 any combination of such sections of this Act shall. for cach

violation be punished by a fine not exceeding twenty million pesos (Php 20,000,000.00) if a

Corporation or association, or four million pesos (Phip 4,000,000.00) if a natural person, of

imprisonment not exceeding five (5) years, or both fine and imprisonment upon the discretion of
court.

Any person found guilty w have violated Sections 9 and/or 10 of this Act or any combination of
‘such sections, shalt for each and every violation, be punished by a fine not excceding five
million pesos (Php 5,000,000.00), or by imprisonment not exceeding two (2) years, or both fine
and imprisonment upon the discretion of the court.


SECTION 35. Jurisdiction — The Regional Trial Court shall have the original jurisdiction to try
fand decide alt criminal and civil cases involving violations of this Act. Any administrative
ageacy that is vested by law with jurisdiction to grant administrative relief im specific cases shall
ce etinue wo exercise such jurisdiction, however avaiiment of a remedy under this Act shall not be
precluded if it be found more convenient, adequate and expeditious for his immediate protection
and relief.

SECTION 16. Jurisdiction of Specialized Agencies - The exclusive and original jurisdiction
conferred upon by law to specialized agencies to regulate, enforce competition laws, and handle
Sdministrative cases on specific industries shall be discharged by the specialized agency
concemed.

SECTION 17. Exclusion of Civil Action from the Criminal Action - The instination of 2
Criminal action under this Act against a defendant shall not be deemed to include any claim for
damages in favor of any person that may have suffered any monetary injury because of any
violation of this Act.

SECTION 18. Private Suits for Monetary Injury — Any person who may be injured in his
business or property by reason of the violation of any provision of this Act or its implementing
rales and regulations may sue in the Regional Trial Court in the principal place of business of the
defendant/s, regardless of the amount in controversy. He shall be entitled to recover not more
than threefold the damages sustained by him, plus the costs of suit, including reasonable
attomey’s fees at the discretion of the Court.

SECTION 19. Parens Patriac Suit — In additional to the criminal action imstituied by the
Secretary of Justice, 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 socure treble damages for any
monetary injury sustained by such natural person by reason of any violation of this Act.

‘Any person on whose behalf a civil action has been brought by the Secretary of Justice under
this Act in the name of the Republic of the Phitippines may elect to exctude from adjudication
the portion of the claim of the Republic of the Philippines for monetary relief attributable to hina
by filing such notice of election with the Regional Trial Court having jurisdiction over the civil
action within such time specified the rules.

SECTION 20, Effect of a Final Judgment in a Parens Patriae Suit - The final judgment rendered
in a parents patriae suit shall be res judicata as to any claim by any person on behalf of whom
‘such action was brought by the Republic of the Philippines and who fails to give a notice of
election to exclude fiom the adjudication his portion of the monetary relicf.

SECTION 21. Suit of the Republic of the Philippines to Recover its Own Damages— Whenever
the Republic of the Philippines is hereafter injured in its business or property by reason of
anything forbidden or renderod unlawful in this Act, it may sue correspondingly sue the
defendants in the proper Regional Trial Court for the recovery of actual damages sustained by it
and the costs of suit,

SECTION 22. Evidential Effect of a Final Judgment Rendered in a Criminal Case ~ Any final
jt t of decree rendered in any criminal action brought by the People of the Philippines, or
any civil action instituted on behalf of the Republic of the Philippines to the effect that the
defendant was found to have violated any provision of this Act shall be prima facie evidence


against such defendant in any civil action brought by any party against such defendant under
this Act. This Section shall not apply to any consent judgment or degree entered into by the
parties concerned.

SECTION 23. Consent Judgment ~ At any time in the course of civil action brought by or on.
behalf of the Republic of the Philippines under this Act, the Republic of the Philippine through
the Secretary of Justice, may propose in a proper pleading to the defendant or defendants a
consent judgment, Any such proposal for consent judgment must be filed with the Regionat Trial
Court having jurisdiction over the case. The Regional Trial Court shall correspondingly evaluate
and examine the proposal for consent judgment and determine if entry of such judgment shall be
in the public interest.

In making its determination, the Regional Trial Court may: (1) take the testimony of the
government officials or such expert witnesses, as the fegional Trial Court may require; (2)
appoint such outside consultants; (3) request and obtain the vicws, evaluations, or advice of any
individual group, or agency of the government with respect to any aspects of the proposed
consent judgment or the effect of such consent judgment; (4) authorize full or limited
participation in the civil proceedings before the Regional‘Trial Court having jurisdiction of the
case by interested persons of agencies of the government, including the appearance of amicus
curiae, intervention as a party pursuant to provisions of the Rules of Court, examination of
witnesses or documentary materials, or participation any other manner and extent which scrves
the public intorest as the Regional Trial Court may deem appropriate,

SECTION 24. Prescription ~ Any criminal, civil action or any private suit, shall be barred unless
commenced within five (5) years from the discovery of the crime or of the act or agreement
giving rise to the cause of action, or which would be a valid basis for the commencement of any
legal action.

SECTION 25. Separability Clause — Any portion or provision of this Act that may be declared
unconstitutional shall not have the effect of nullifying other portions or provisions hereof, as
long as such remaining portions cam stil subsist and be given effect in their emtirety.

SECTION 26 Repealing Clause ~ All provisions of law, orders, decrees, executive orders,
including rules and regulations or parts thereof which are contrary to or inconsistent with the
provisions of this Act are hereby repealed or modified accordingly.

SECTION 27. Effectivity — This Act shail take effect after fifteen (15) days from the completion
of its publication in at least two (2) newspapers of general circulation.