Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
FIFTEENTH CONGRESS

ist Realy Sesion

Introduced by REP. ANTONIO C. ALVAREZ

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 expressly provide 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 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 to attain further economic growth.

‘The proposed bill 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.

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 iy-and earnestly sought.

ANTONIO G ALVAREZ



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH (15™) CONGRESS
First Regular Session

House BiLL No._ 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.”

Spc, 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

() 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 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 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
tay 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;

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


(d) “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” shalll 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, 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;

(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;

(i) “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;

(i) “Monopoly Power” 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 specific
geographical area; and

(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
turn if the restraint or abuse results in the significant increase
in prices.

CHAPTER 3
PROHIBITED ACTS


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 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 DTI 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 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.

(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:

() 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;

(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 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.

(d) 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.

(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.

(8) 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 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 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.

(j) 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
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,
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 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;

@) 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

(@) 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 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 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 securitie:

(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;

(© 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.

(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 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
laws, 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
(PhpSO,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 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 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 (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 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 shall 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


i

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 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.

{c

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 sworn 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 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.

(a) 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.


12

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.

(ce) _ 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.

()_ 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
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 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 shall 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:


13

(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;

(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 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;

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

(© 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 who has actively
participated in the proceedings, order the presentation of


14

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 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;

(6) 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;



15

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;

ili. 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) Internal 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

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 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. 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


7

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 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


18

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 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 Scction 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, ¢) 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-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 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
thereof, 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.

(4) 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 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 shall


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.

(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 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 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. 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.


2

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 such 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 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;

(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. 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


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 reason of the 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 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, each 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 (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.

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. 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 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. 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, 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.

Ssc. 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 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.


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. 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 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

Src. 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.

Suc. 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


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 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.

Sc. 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

Spc. 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. 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 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 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,