Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO.

Introduced by Honorable EDUARDO R. GULLAS

EXPLANATORY NOTE

This bill secks to provide a comprehensive law to regulate anti-competitive behaviour and
business practices, free of limitations as self-interest, and to strengthen prohibitions against
‘monopolies and cartels, thereby attaining equal distribution of opportunities, income and wealth.

More importantly, Article XI, Sections 19 and 22 of the 1987 Philippine Constitution calls for
the government to protect Filipino enterprises against unfair competitions and trade practices.

This bill shall augment the government efforts to deregulate and privatize state-owned utilities
by providing adequate prohibitions and efficient enforcement mechanism to deter violations as
provided in the Constitution.

This bill shall also regulate a market scheme where “rere among the entrepreneurs
will produce high quality goods at lower prices.

Hence, the approval of this bill is earnestly sought. tf)
ING

EDUARDO R. GULLAS
i


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

ag3
HOUSE BILL NO.__ $985

Introduced by Honorable EDUARDO R. GULLAS

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

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

SECTION 1. Title ~ This Act shall be known as the “Philippine Antitrust Act”.

SECTION 2. Declaration of Policy ~ It is the declared policy of the State to achieve a more
equitable distribution of opportunities, income, and wealth; a sustained increase in the amount of
goods and services produced by the nation for the benefit of the people; and an expanding
productivity as the key to raising the quality of life for all by espousing competition and
protecting Filipino enterprises from unfair trade practices.

SECTION 3. Definitions of Terms ~ As used in this act, the following terms shall be taken to
mean as follows:

a. Antitrust Laws ~ this Act, statutes and all other statues hereinafter enacted by
Congress relating to or governing monopolies, oligopolies, cartels. combinations,
contracts and/or agreements or arrangements in restraint of trade, production ,
commerce or industry or which make available to national or local governments, or
any private person whose rights have been or in danger of being impaired, any civil
and/or criminal remedies or administrative proceedings before the Regional Trial
Court or administrative agency with respect to any act, contract, agreement, rule,
control, course of conduct, or other activity by, between or among persons constituting
a restraint upon or monopolization of domestic or foreign trade, commerce or
industry or methods of competition in or affecting such trade, commerce or industry.

b, Person ~ any natural person, firm, company, corporation, society, association,
partnership, joint-stock company, or any other legal entity including any person acting
under color or authority of law.

©. Commerce — intercourse by way of trade and traffic between different: regions,
provinces, towns of cities in the Philippines and the citizens or inhabitants thercof,
including not only the purchase , sale and exchange of commodities, goods, articles,
services, productions or property of any kind, but also the instrumentalities and
agencies by which it is promoted and the means and modes by which it is carried on,



4. Export trade — trade or commerce in goods, wares, merchandise or object of trade,
commerce or industry exported, or in the course of being exported from the
Philippines to any foreign country.

€. Implementing Agencies — shall
Jurisdiction to regulate competi
Industries and/or sectors.

f, Industry — any department or branch of art, occupation or business conducted as a
means of livelihood or for profit, especially one which employs much labor and
capital and is a distinct branch of trade.

g. Trade — mercantile or commercial business in general, or the buying and selling,
exchanging of commodities and services, either by wholesale or retail

h, Trusts - - an association or combination of persons or corporations having the
intention and power, or the tendency to create a monopoly, control production,
interfere with the free course of trade, or to fix and regulate the supply and the price of
commodities and servic

i. Unfair trade practices - - refers to any act that impedes fair competition such as
unjustly discriminating between persons, dealing at unjust prices, unjustly inducing or
coercing customers of a competition to deal with oneseli
on such terms as will unjustly restrict the business activities of the said party, and
dealing with another party by unjust use of one’s bargaining position.

fer to administrative agencies vested by law with
and grant administrative relief in specific

SECTION 4. Contracts, Concerted Actions or Combinations in Restraint of Trade — it shall be
unlawful for any person to enter into any contract or agreement or shall take part in any
conspiracy or combinations in the form of trusts or otherwise or any other form of mutual
understanding with a competing person.

a. To limit unduly the facilities for tansportis
storing or dealing in any product;

b. To prevent, limit or lessen, by artificial means, the manufacturer or production of a
product or to enhance unreasonably the price thereof;

¢. To prevent or lessen, unduly, competition in the production, manufacturer, purchase,
barter, sale, storage, rental, transportation or supply of a product, or in the price of
insurance on persons or property: or

d. To otherwise restrain or injure competition through unfair trade practices.

18 producing, manufacturing, supplying,

SECTION 5. Monopoly or Attempt to Monopolize — It shall be unlawful for any person 10
‘monopolize, or attempt to monopolize, or to combine or conspire, expressly or impliedly, with
any other person or persons, to monopolize any part of the trade or commerce within the country,
or with any foreign country, or territory. Provided, that nothing contained in this Act shall render
unlawful the right of a patent holder or a copyright holder to enjoy the benefit of his patent or
copyright duly registered in the Philippines or in any foreign country with which the Philippines
is a co-signatory to any treaty or convention that protects the rights to an invention, patent, or to
a copyright as the case may be.

As prohibited in this Act, it has two elements: (1) possession of monopoly power in relevant
‘markets, and (2) wilful acquisition or maintenance of that power to exclude competitors from
any part of trade, commerce or industry, as distinguished from growth or development as a
consequence of a superior product, business acumen or historic accident.


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SECTION 6. Price discrimination — It shall be considered an illegal trade practice for a person
‘engaged in business to be a party or privy to:

a. Any sale that discriminates to his knowledge, directly or indirectly, against
competitors of a purchaser of articles from him in that any discount, rebate allowance,
price concession or other advantage is granted to the purchaser over and above any
discount, rebate, allowance, price concession or other advantage that, at the time the
articles are sold to the purchaser, is available to the competitors in respect of a sale of
articles of like quantity and quality;

b. Engage in the policy of selling products in areas of the Philippines at prices lower
than those exacted by him elsewhere in the country, having the eflect or tendency of
substantially lessening competition or eliminating a competitor in that part of the
Philippines, or designed to have that effect;

c. Engage in a policy of selling products at prices unreasonably low, having the effect or
tendency of substantially lessening competition or climinating a competitor, or
designed to have that effect.

SECTION 7. Bid-Rigging — No person shall enter into an agreement or arrangement whereby
one or more of those persons agree or undertake not to submit a bid in response to a call or
request for bids or tenders; or shall agree to make a submission of bids or tenders arrived at by
agreement or arrangement between or among two or more bidders or tenderers in response to a
call or request for bids or tenders.

SECTION 8. Permissible Concerted Action — Contracts, agreement resulting to concerted action
between competing person is permissible only upon approval and determination by the proper
implementing agencies that the planned concerted action shall be beneficial to the economy as a
whole and in the public interest. Applications for permissible concerted action may be made for
the following purposes:

a. Unifying the specifications or models of goods for the purpose of reducing costs,
improving quality, or increasing efficiency;

. Joint research and development on goods or markets for the purpose of upgrading
technology, improving quality, reducing costs, or increasing efficiency;

c. Arrangements to develop a separate and specialized area for the purpose of
rationalizing operations;

4. Entering into agreements concerning solely the competition in foreign markets for the
purpose of securing or promoting exports;

©. Joint acts for the purpose of improving operational efficiency or strengthening the
competitiveness of small and medium enterprises.

SECTION 9. Acquisitions of Corporate Stocks and Assets — No person engaged in commerce or
in any activity affecting commerce shall acquire, directly or indirectly, the whole or part of the
stock or share capital, or acquire the whole or any part of the assets of another person engaged
also in commerce or in any activity affecting commerce, where in any line of commerce or in
any activity affecting commerce in any section of the country, the effect of such acquisition may
be substantially to lessen competition or tend to create a monopoly. Provided, this section shall
not apply to persons purchasing such stock solely for investment and not using the same by
Voting or otherwise to bring about, or in attempting to bring about, the substantial lessening
competition. Nor shall anything contained in this section prevent a corporation engaged in
commerce or in any activity affecting commerce from causing the formation of subsidiary


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corporations for the actual carrying on of their immediate lawful business, or the natural and
legitimate branches of extensions thereof, or from owning and holding all of part of the stock of
such subsidiary corporations when the effect of such formation is not substantially lessen
competition.

SECTION 10. Interlocking Directors — No person shall, at the same time, serve as a director or
officer in any two corporations that are engaged in whole or in part in commerce and by virtue of
their business and location of operation, competitors, to the effect that an agreement to eliminate
competition between them would constitute a violation of any antitrust law except:

a, Between parent and subsidiary companies;

b. Between or among affiliates defined to mean ownership by one of not less than
twenty percent (20%) but not more than fifty percent (50%) af the shares of stock of
the other;

¢. The co-ventures in joint venture companies; and

4. Family corporations.

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

SECTION 12. Collective Bargaining — Nothing in this act shall apply to combinations or
activities of workmen or employees for their own reasonable protection as such workmen or
employees and contracts, agreements or arrangements between or among two or more employers
in a trade, industry, or profession, whether effected directly between or among the employers or
through the instrumentality of a corporation or association of which the employers are members,
pertaining to collective bargaining with their employees in respect of salary or wages and terms
or conditions of employment.

SECTION 13. Liability of Directors, officers and Agents ~ Whenever a corporation shall violate
any of the provisions of this Act, such violation shall be deemed to be also that of the individual
directors, officers or agents of such corporation who shall have authorized, ordered, or done any
of the acts constituting in whole or in part such violation,

SECTION 14, Penalties for Violations — Any person found guilty of committing any acts in
violation of section 4, 5, 6 and/or 7 any combination of such sections of this Act shall, for each
violation be punished by a fine not exceeding twenty million pesos (Php 20,000,000.00) if a
corporation or association, or four million pesos (Php 4,000,000.00) if a natural person, or
imprisonment not exceeding five (5) years, or both fine and imprisonment upon the discretion of
the court.

Any person found guilty to have violated Sections 9 and/or 10 of this Act or any combination of
such sections, shall for each and every violation, be punished by a fine not exceeding five
million pesos (Php 5,000,000.00), or by imprisonment not exceeding two (2) years, or both fine
and imprisonment upon the discretion of the court.



Re

SECTION 15. Jurisdiction — The Regional Trial Court shall have the original jurisdiction to try
and decide all criminal and civil cases involving violations of this Act. Any administrative
agency that is vested by law with jurisdiction to grant administrative relief in specific cases shall
continue to exercise such jurisdiction, however availment of a remedy under this Act shall not be
precluded if it be found more convenient, adequate and expeditious for his immediate protection
and relief.

SECTION 16. Jurisdiction of Specialized Agencies — The exclusive and original jurisdiction
conferred upon by law to specialized agencies to regulate, enforce competition laws, and handle
administrative cases on specific industries shall be discharged by the specialized agency
concerned.

SECTION 17. Exclusion of Civil Action from the Criminal Action — The institution of a
criminal action under this Act against a defendant shall not be deemed to include any claim for
damages in favor of any person that may have suffered any monetary injury because of any
violation of this Act.

SECTION 18. Private Suits for Monetary Injury — Any person who may be injured in his
business or property by reason of the violation of any provision of this Act or its implementing
rules and regulations may sue in the Regional Trial Court in the principal place of business of the
defendanv/s, regardless of the amount in controversy. He shall be entitled to recover not more
than threefold the damages sustained by him, plus the costs of suit, including reasonable
attorney’s fees at the discretion of the Court.

SECTION 19, Parens Patriae Suit — Jn additional to the criminal action instituted by the
Secretary of Justice, a civil action may be instituted in the name of the Philippines, as parens
patriae, on behalf of natural persons residing in the Philippines to secure treble damages for any
monetary injury sustained by such natural person by reason of any violation of this Act.

Any person on whose behalf a civil action has been brought by the Secretary of Justice under
this Act in the name of the Republic of the Philippines may elect to exclude from adjudication
the portion of the claim of the Republic of the Philippines for monetary relief attributable to him
by filing such notice of election with the Regional Trial Court having jurisdiction over the civil
action within such time specified the rules.

SECTION 20. Effect of a Final Judgment in a Parens Patriae Suit — The final judgment rendered
in a parents patriae suit shall be res judicata as to any claim by any person on behalf of whom
such action was brought by the Republic of the Philippines and who fails to give a notice of
election to exclude from the adjudication his portion of the monetary relief.

SECTION 21. Suit of the Republic of the Philippines to Recover its Own Damages ~ Whenever
the Republic of the Philippines is hereafier injured in its business or property by reason of
anything forbidden or rendered unlawful in this Act, it may sue correspondingly sue the
defendants in the proper Regional Trial Court for the recovery of actual damages sustained by it
and the costs of suit,

SECTION 22. Evidential Effect of a Final Judgment Rendered in a Criminal Case ~ Any final
judgment or decree rendered in any criminal action brought by the People of the Philippines, or
any civil action instituted on behalf of the Republic of the Philippines to the effect that the
defendant was found to have violated any provision of this Act shall be prima facie evidence


against such defendant in any civil action brought by any party against such defendant under
this Act. This Section shall not apply to any consent judgment or degree entered into by the
parties concerned.

SECTION 23. Consent Judgment ~ At any time in the course of civil action brought by or on
behalf of the Republic of the Philippines under this Act, the Republic of the Philippine through
the Secretary of Justice, may propose in a proper pleading to the defendant or defendants a
consent judgment. Any such proposal for consent judgment must be filed with the Regional Trial
‘Court having jurisdiction over the case. The Regional Trial Court shall correspondingly evaluate
and examine the proposal for consent judgment and determine if entry of such judgment shall be
in the public interest.

In making its determination, the Regional Trial Court may: (1) take the testimony of the
government officials or such expert witnesses, as the Regional ‘Trial Court may require; (2)
appoint such outside consultants; (3) request and obtain the views, evaluations, or advice of any
individual group, or agency of the government with respect to any aspects of the proposed
consent judgment or the effect of such consent judgment; (4) authorize full or limited
participation in the civil proceedings before the Regional Trial Court having jurisdiction of the
case by interested persons or agencies of the government, including the appearance of amicus
curiae, intervention as a party pursuant to provisions of the Rules of Court, examination of
witnesses or documentary materials, or participation any other manner and extent which serves
the public interest as the Regional Trial Court may deem appropriate.

SECTION 24. Prescription — Any criminal, civil action or any private suit, shall be barred unless
commenced within five (5) years from the discovery of the crime or of the act or agreement
giving rise to the cause of action, or which would be a valid basis for the commencement of any
legal action.

SECTION 25. Separability Clause ~ Any portion or provision of this Act that may be declared
unconstitutional shall not have the effect of nullifying other portions or provisions hereof, as
long as such remaining portions can still subsist and be given effect in their entirety.

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

SECTION 27. Effectivity ~ This Act shall take effect after fifteen (15) days from the completion
of its publication in at least two (2) newspapers of general circulation.