fox ~ t ‘
‘> Received |
© ope: 05 JUL 2013

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

Introduced by Representative Feliciano Belmonte, Jr.

EXPLANATORY NOTE

‘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

No less than the 1987 Constitution expr

sly provides that the State shall regulate
or prohibit monopolies when the public interest so require. 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
have proven to 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 country’s credibility to provide a business climate conducive to
investment. Likewise, the presence of a comprehensive competition policy will further boost
our nation’s GDP to rise at par with our first-world counterparts, real wages to improve,
prices to drop and our country to attain further economic growth.

In November 2007, the leaders of the Association of South East Asian Nations
(ASEAN) adopted the ASEAN Economic Community (AEC) Blueprint which each ASEAN
Member Country shall abide by and implement by 2015. The AEC Blueprint will transform
the ASEAN into a single market and production base, a highly competitive economic region
of equitable and economic development, and a region fully integrated into the global
economy

As outlined in the AEC Blueprint
Philippines, will endeavor to introduce compe

N Member States, including the
by 2015.

In his first State of the Nation Address in July 2010, President Benigno Simeon
Aquino III called for an anti-trust law to promote fair competition and provide opportunities
for small and medium scale enterprises to participate and contribute to economic growth.
A level playing field is essential for inclusive growth and development.

The Legislature under the Fifteenth (15
comprehensive competition bills, and both Hou
earnest

") Congress responded by shepherding
es deliberated on their own versions in

In the House of Representatives, the Committee on Trade and Industry, chaired by
then Representative Albert S. Garcia, prepared and submitted House Bill No. 4835 in



substitution to twelve (12) bills, and which was subsequently co-authored 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.), Tanada, Gullas, Belmonte (F.), Miraflores, Golez (A.), Nograles,
Duavit, Biron, Defensor, Trefas, Casino, Villarica, Mandanas, Fernandez, Garay, Del
Rosario (A.G.), Sacdalan, Joson, Rodriguez (I), Lacson-Noel, Yu, Ferrer (J.), Sahidula,
Lagdameo (A.), Bonoan-David, Mellana, 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.

Unfortunately, due to time and other constraints, both Houses failed to pass their
respective bills on competition in the previous Congress.

‘The current proposed bill is a refiied measure of HB 4835 of the Fifteenth (15!)
Congress with some improvements. It aims to 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 prosecution 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.

Likewise, the bill mandates that the exercise of regulatory powers by different
government agencies, including local government units, over an industry or subsector
thereof shall be cumulative and shall not be construed in any way as derogating from the
power and authority of the concerned agency. Hence, while the Commission shall have
primary and sole jurisdiction over competition issues, the regulatory bodies shall continue
to exercise over all matters with regards to the firms’ operation and existence.

Moreover, the bill offers a leniency program for 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.

It 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 highly and earnestly sought.


Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City

SIXTEENTH (16"") CONGRESS
First Regular Session

HOUSE BILL No, 1133

Introduced by Representative Feliciano Belmonte, Jr.

AN ACT
PENALIZING ANTI-COMPETITIVE CONDUCT, 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

SECTION 1. Title. — This Act shall be known and cited as the “Philippine
Fair Competition Act of 2013.”

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, 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 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 anti-competitive conduct, abuse of dominant

position, and anti-competitive mergers, with the objective of protecting


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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
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 agents, officers, employees, partners, owners,
directors, consultants, stockholders, representatives, managers, supervisors, and
all 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:

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

(b) “Carte!” 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. 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 Philippine Fair Competition Commission
created under this Act;


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(4) “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;

(e) “Control” shall refer to the power to direct or cause the direction of
management policies of a person by contract, agency or otherwise;

(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;

(g) “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, 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” shall include all types of tangible and

intangible property that could be bought and sold, and the possession
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, to
another 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. It 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;


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“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” shall be when two or more undertakings, previously

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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 or part of another (acquisitions or
takeovers), two or more firms acquire joint control over another firm
(joint ventures) and other transaction, whereby one or more
undertakings acquire control over one or more undertakings, such as
interlocking directorates; and

(

=

“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.
CHAPTER II
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, which shall be known as the Philippine Fair
Competition Commission (PFCC), hereinafter referred to as the Commission, and
which 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 composed 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


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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 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 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 shall 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;

(c) 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 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 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 his/her 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
have 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 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.

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.

(g) 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 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, he shall be a Career Executive Service Officer (CESO),
The members of the technical staff, except those performing purely
clerical functions, shall possess at least a Bachelor Degree in the
following lines of specialization: economics, preferably in industrial
organization; law; finance: commerce; accounting; or management.


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SEC. 6. Original and Exclusive Jurisdiction. - 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
this Act, and examine if necessary, pertinent records and documents in
the possession of such government agency;

(5) Issuance of Subpoena. = To issue subpoena, subpoena duces tecum
and subpoena ad testificandum 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 paragraph (c)(2) hereof;

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;
i

A person appearing before the Commission 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;


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and of his rights to avail of the immunity from prosecution privilege
herein prescribed;

(b) 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;

(2) 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;

(4) Preliminary Inquiry - To conduct the required preliminary inquiry of
cases involving violations of this Act and other competition laws; and
thereafter, if appropriate, to sign and file the proper criminal complaint
before the Department of Justice; and

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

(c) Other Powers of the Commission’

(1) 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;

(2) Annual and Special Reports. - 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


9

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;

(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, 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 tried where the plaintiff or any of the


10

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 III
PROHIBITED ACTS

SEC. 8. Anti-competitive Conduct. ~ It shall be unlawful for firms to
engage in anti-competitive conduct that prevent, distort or restrict competition,
unless otherwise exempted

There shall be a prima facie case for the existence of an anti-competitive

conduct if and when the Commission finds that two or more 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

(a) Price Fixing — Any conduct 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 or
lessening competition.

(b) Bid Rigging — Any conduct 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:

(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


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1 amount of their goods, or to sell only to a limited number of buyers
2 or consumers;

3 (2) a drastic change in prices of goods and services involving more

4 than one seller of similar goods of different brands, particularly if the
5 changes in prices take place in equal amount and about the same
6 time;

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

8 (4) the same firm has repeatedly been the low bidder who has been

9 awarded contracts for a certain service or a particular bidder seems
10 to win bids on a fixed-rotation;

i (5) there is an unusual and unexplainable difference between the

12. winning bid and all other bids; and

1B (6) the same bidder bids substantially higher on some bids than on
4 others, and there is no logical cost reason to explain the difference.

15 SEC. 9. Abuse of Dominant Position. — \t shall be unlawful for one or

16 more firms to abuse their dominant position, by engaging in unfair methods of
17 competition, or in unfair or deceptive trade practices, or entering into
18 combinations in the form of trust or otherwise, or conspiracy, with the purpose
19 and effect to prevent, restrict, or distort competition. Abusive conduct such as,
20 but not limited to, any of the following, shall be deemed to fall under the crime of
21 abuse of dominant position:

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

(b) Limitation and Control of Markets - Any conduct to limit or control

26 production, markets, technical development, or investment with the
a] purpose and effect of creating a monopoly or cartel, or lessening
28 competition;

29 (c) Market Allocation — Any conduct to divide the market, whether by volume
30 of sales or purchase or by territory, by type of goods sold, by customers or
31 sellers or by any other means, with the purpose and effect of creating a

32 monopoly or cartel, or lessening competition;


2

(d) Arrangements to Share Markets or Sources of Supply — Any conduct to

share markets or sources of supply of raw materials, with the purpose and
effect of creating a monopoly or cartel, or lessening competition;

(e) Price Discrimination - Any conduct 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 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

(f) Exclusivity Arrangement — Any conduct 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


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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 conduct 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;

(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, 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 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;

(2)A corporation from causing the formation of subsidiary
corporations, or from owning and holding alll 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 it acquired prior
to the approval of this Act


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(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 have the power
to direct or cause the direction of management policies 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 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 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,
within a further sixty (60) calendar days in accordance with the
procedure prescribed herein for the disposition of a show cause order.
If the Commission fails to make a decision within the prescribed 60
calendar day limit, the acquisition shall be deemed approved and the
parties may proceed to implement it

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


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(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.

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) and not exceeding Fifty Million Pesos
(Php50,000,000) if a natural person; by a fine of not less than Two Hundred Fifty
Million Pesos (Php250,000,000) but not exceeding Seven Hundred Fifty Million
Pesos (Php750,000,000) 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 violator/s 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 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) for each
violation. Each violation shall be deemed a separate offense: Provided, That in


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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.

(c) 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) to not more than One Hundred Thousand Pesos
(Php100,000) 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. 12. Criminal Penalties. - 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) and not exceeding
Fifty Million Pesos (Php 50,000,000) if a natural person; by a fine of not less than
Two Hundred Fifty Million Pesos (Php250,000,000) but not exceeding Seven
Hundred Fifty Million Pesos (Php750,000,000) 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

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 II, Articles 16, 17, 18 and 19 on criminal liability of
principals, accomplices, and accessories 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.


Baw ew

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 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 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. The Commission
can seek technical assistance from sectoral regulators

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 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. 16. Self-incrimination.- 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. 17. 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


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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
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 less than One
Hundred Thousand Pesos (Php100,000) but not more than Five Hundred
Thousand Pesos (Php500,000).

SEC. 19. 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 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 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 11

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


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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 11 hereof; (b) order the rectification of certain acts or
‘omissions; or (c) 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 file criminal cases for
violation of this Act before the Department of Justice pursuant to Section 12 of
this Act.

SEC. 21. Nolo Contendere Resolution. — 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 11; 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: 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

his contemplated or existing act, course of conduct, agreement,
decision or practice is in compliance with, is exempt from, or in


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violation of any of the provisions of this Act, other competition laws, 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;

(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 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) Consultations. ~ 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 competition laws.

(e) Binding Ruling, Cease and Desist Order, and Consent Judgment. -

Based upon the facts, data, and information disclosed or supplied by


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the persons concerned, 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 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.

(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 Court 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


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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) 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 concerned; 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, 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;

(

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, 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 shall 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. 23. Standards. - In the exercise of its powers or in the discharge of

its duties under this act, the Commission shall consider:

(a)the way a given industry is structured or organized whether
monopolistic, oligopolistic, or competitive;

(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) whether or not the particular market conduct has an appreciable impact
‘on market conditions;

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

(f) 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;

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

(j) 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 international competition and other
developments in the international market;

(I) the need to encourage or develop small and medium-sized industries;

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

(n) the need to pool capital resources;


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

(p) the economic and financial power of the parties concerned;

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

(r) 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
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.

SEC. 25. 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 such terms and conditions it may
deem just. ©

SEC. 26. 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 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;


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(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
shall 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
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


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26

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 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 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

SEC. 31. 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. 32. Essential Commodities. — \f the violation involves the trade or
movement of prime commodities such as rice, corn, 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, 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. 34. 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


Boo

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 against such defendant 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 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. 36. 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

SEC. 37. Immunity from Suit. — The Commissioners and 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 duties or exercise


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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 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. 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 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 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


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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
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. 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 Fair 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; and two members each
from the Senate and the House of Representatives who shall be designated 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 shall
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 Commerce and the
House of Representatives Committee on Trade and Industry. The Vice-Chair of
the Congressional Oversight Committee shall be jointly held by the Chairpersons
of the Senate Committee on Economic Affairs and the House of Representatives
Committee on Economic Affairs.


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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 VII
FINAL PROVISIONS

SEC. 43. Implementing Rules and Regulations. - The Commission
shall prepare the necessary rules and regulations within one hundred twenty
(120) days from the effectivity of this 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 concerned regulatory agency and stakeholders: Provided, further, That
the Commission may revise such guidelines as it deems necessary: Provided,
however, That such revised guidelines shall only take effect following its
Publication in two newspapers of general circulation.

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 (P100,000,000) 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:

i. Office of the President to be represented by the Executive
Secretary with the Deputy Executive Secretary for Legal Affairs as
alternate;

ii, 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;


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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;

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;

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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 deliberate 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.

The Task Force shall also commence the coordinated advocacy for this
Act within ninety (90) 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 shall be submitted 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. 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. 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 laws, executive orders, rules and
regulations or parts thereof which are inconsistent with this Act are hereby
repealed or amended accordingly

SEC. 49. Effectivity Clause. - This Act shall take effect fifteen (15) days
following its publication in the Official Gazette and in at least two (2) national
newspapers of general circulation. Provided however, That in order to allow


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affected parties time to renegotiate agreements or restructure their business to
comply with the new competition law, 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,