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sEPRES

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
SIXTEENTH CONGRESS
First Regular Session

HOUSE BILL No.__ 4346

Introduced by REP. ANTHONY G. DEL ROSARIO.

EXPLANATORY NOTE

The bill provides for a fair competition law which will protect the consumers
and safeguard the stability and integrity of trade and industry, commercial
transactions and other economic activities. It intends to promote an economic
environment free from unlawful conducts that permit unfair competitive advantage.

The 1987 Philippine Constitution under Sec. 13, Article XVII provides:

“The State shall pursue a trade policy that serves the general welfare and
utilizes all forms and arrangements of exchange on the basis of equality and
reciprocity.”

While Sec. 19, Article XVII of the same provides:

“The State shall regulate or prohibit monopolies when the public interest so
requires. No combination in restraint of trade or unfair competition shall be allowed.”

In trade and business transactions, consumer welfare is paramount. The
existing laws and corresponding penalties are seeminlgy not enough to resolve a
long range of issues arising from consumer rights and concerns. Through the
‘enactment of a law penalizing any misconduct that violates well accepted practices
and principles of business and trade, consumers are provided additional protection
against monopolies and unfair competition. The proposed measure therefore aims to
provide a remedy that enhances and promotes economic efficiency.

Likewise, this measure addresses the issue of concentration of business
ownerships amongst the few, which creates inequitable economic implications.
Regulatory powers will be utilized so that dominant market players are refrained
from owning almost everything they can get their hands on. This will provide the
government an opportunity to give its citizens with a more equitable distribution of
opportunities, income and wealth. A Fair Trade Commission is proposed to be
established to investigate, gather evidence and initiate prosecution of those engaged
in unfair trade practices, monopoly and cartels. Also in the measure are provisions
for imposition of sanctions and penalties for violation of fair competition and
practices that are consonant with the provisions enshrined in Sec. 22, Article XII of
the Constitutions, to wit:



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

In view of the foregoing, approval of this measure is eamestly sought.

Al G. DEL ROSARIO


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

HOUSE BILL NO., 43 46

Introduced by REP. ANTHONY G. DEL ROSARIO

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 2014.”

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
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) “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. 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;

(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” 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;

“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

d

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

(k) “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 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) shalll 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.

(f) 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.

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:

(4) 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;

(8) 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;
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;
‘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

iii.

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;

(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 require as to
the organization, business, conduct, practices, management and
elation 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
principal plaintiff resides, or where the defendant or any of the principal defendants
reside, or in the case of a non-resident defendant, where he may be found, at the
election of the plaintiff.

CHAPTER Ill
PROHIBITED ACTS

SEC. 8. Anti-competitive 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
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.


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

(a) Predatory Behavior Towards Competitors - Any conduct, including, but not
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 production,
markets, technical development, or investment with the purpose and effect of
creating a monopoly or cartel, or lessening competition;

(c) Market Allocation — Any conduct 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;

(a) 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


(8) 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 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.
(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:

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

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

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

ion;
(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.

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 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.

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 concerned agency. The
government agencies shall cooperate and coordinate with one another in the


exercise of their powers in order to prevent overlap, to share confidential
information, or for other effective measures. The Commission can seek technical
assistance from sectoral regulators.

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
cor 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 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 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 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 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
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;

()) 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;

(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
cor to answer questions or to furnish information when lawfully required to do so.

SEC. 25. Decisions of the Commission. — Decisions of the Commission en
bane 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;

(0) is in excess of statutory jurisdiction, authority, or limitations, or is contrary

to law;

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

(e) is not supported by substantial evidence.

The Commission shall be included as a party respondent to the case and
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, rule or regulation.

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

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

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

It shall not be a defense for the Chairperson of the Board of Directors, the
President or the General Manager of 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. — 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.

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 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 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 plaintif is too
speculative to prove, the cause of action does not accrue until the damage becomes
probable: Provided, however, That if the plaintiffs injury is the result of the
continuing violations of this Act, each independent anti-competitive act may restart
the limitation period or when a plaintiff reasonably fails to uncover a cause or action
that was fraudulently concealed by a defendant.

SEC. 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
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 shalll 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.
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;

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

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

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

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

The Task Force shall also meet in Executive Session with all the agency
heads to 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 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,