Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Philippines

SIXTEENTH CONGRESS
First Regular Session

HOUSEBILLNO. 453

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

EXPLANATORY NOTE
Article XII, Section 19 of the 1987 Philippine Constitution provides:

“Section 19, The State shall regulate or prohibit monopolies when the public
interest so requires. No combinations in restraint of trade or unfair competition
shall be allowed.”

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

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

‘These constitutional provisions not only recognize the danger that monopolies pose on the public
interest but also contemplates that monopolies emerging, through restraint of trade or unfair
competition, must be struck down in the incipiency

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

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

Admittedly, there were laws passed pursuant to the above-quoted Constitutional mandate
However, the increased deviousness and complexity of schemes in perpetuating monopolies in
the free market necessitates an equally sophisticated legislation that would effectively address
this concer.

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

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

.RCELINO “MARCY” R. TEODORO
Ramemameiten


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Philippines

SIXTEENTH CONGRESS
First Regular Session

House BILL NO, 293

INTRODUCED BY HON. MARCELINO “MARCY” R. TEODORO

=XPLANATORY NOTE
Article XI; Section 19 of the 1987 Philippine Constitution provides:

“Section 19. The State shall regulate or prohibit monopolies when the public
interest so requires. No combinations in restraint of trade or unfair competition
shall be allowed.”

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

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

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

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

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

Admittedly, there were laws passed pursuant to the above-quoted Constitutional mandate.
However, the increased deviousness and complexity of schemes in perpetuating monopolies in
the free market necessitates an equally sophisticated legislation that would effectively address
this concer,

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

For these reasons, the passage of this Bill is earnestly sought.
Zz.
MARCELINO “MARCY” R. TEODORO

Representative
1* District, Marikina City


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

ASR

HOUSE BILLNO, 49

INTRODUCED BY REP. MARCELINO R. TEODORO

AN ACT

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

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

1 CHAPTER I
2 GENERAL PROVISIONS
3 SECTION 1. Title. — This Act shall be known and cited as the “Philippine

4Fair Competition Act of 2013.”

5 SEC. 2. Declaration of Policy. — Pursuant to the constitutional mandate
6that the State shall regulate or prohibit monopolies when the public interest so
Trequires and that no combinations in restraint of trade or unfair competition shall
8be allowed, the State shall

9 (a) promote and enhance economic efficiency and free, full and fair
10 competition in trade, industry and all commercial economic activities;

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

15 (©) penalize all forms of anti-competitive agreements, abuse of dominant
16 position, and anti-competitive mergers, with the objective of protecting
17 consumer welfare and advancing domestic and international trade and

18 economic development


1 SEC. 3. Scope and Application. — This Act shall be enforceable within
2the territory of the Republic of the Philippines and shall apply to all areas of trade,
3industry and commercial economic activity. It shall likewise be applicable to
4international trade having direct, substantial and reasonably foreseeable effects
sin trade, industry or commerce in the Republic of the Philippines including those
6that result from acts done outside the Republic of the Philippines.

7 The Act shall apply to: (a) all firms as defined hereunder and all their
Scommercial agreements, actions or transactions involving goods, services or
Sintellectual property; and, (b) all agents, officers, employees, partners, owners,
l0directors, consultants, stockholders, representatives, managers, supervisors, and
all other natural persons who, acting on behalf of juridical persons shall authorize,
12engage or aid in the commission of restrictive practices prohibited under this Act
13 This Act shall apply neither to the combinations or activities of workers or
I4employees nor to agreements or arrangements with their employers when such
1Scombinations, activities, agreements, or arrangements are designed solely to
16facilitate collective bargaining in respect of conditions of employment.

7 SEC. 4. Definition of Terms. — As used in this Act, the following terms
18shall be defined as:

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

22 (v) “Cartel” shall refer to a combination of firms, providing goods in
23 relevant markets, acting or joined together to obtain a shared monopoly
24 to contro! production, sale and price, or to obtain control in any
25 particular industry or commodity, or a group of firms that agree to
26 restrict trade. It shall also refer to firms or section of firms having
27 common interest designed to promote the exchange of knowledge
28 resulting from scientific and technical research, exchange of patent
29 rights and standardization of products among themselves with the
30 intent of preventing, restricting or distorting competition;

31 (c) “Commission” shall refer to the Philippine Fair Competition

32 Commission created under this Act;


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

(©) “Control” shalll refer to at least twenty percent (20%) ownership, directly
or indirectly, of a firm or a group of firms by another firm;

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

(g) Firm’ shall refer to 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 refer to 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
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;

6

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


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

“Mergers” shall refer to two or more undertakings, previously
independent of one another, join together. This definition includes
transactions whereby two firms legally merge into one (mergers), one
firm takes sole control of the whole 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 refer to a privilege or undue advantage of one or more

firms, consisting in the exclusive right to carry on a particular business
or trade, and/or manufacture a particular product, article or object of
trade, commerce or industry. It is a form of market structure in which
‘one or only a few firms dominate the total sales of a product or service.
CHAPTER I
PHILIPPINE FAIR COMPETITION COMMISSION
SEC. 5. Philippine Fair Competition Commission. - To implement the

22national policy and attain the objectives and purposes of this Act, an independent

23Commission is hereby created, to be known as the Philippine Fair Competition

24Commission (PFCC), which shall hereinafter be referred to as the Commission,

2Sand shall be organized within one hundred eighty (180) days after the approval of

26this Act.

21 For budgetary purposes, the Commission shall be under the Office of the
28President.

29 (a) Composition. - The Commission shall be composed of a Chairperson
30 and four (4) Associate Commissioners. The Chairperson and
31 Commissioners shall be citizens and residents of the Philippines, at
32 least forty (40) but not more than sixty-five (65) years of age, of good
33 moral character and of recognized probity and independence. The
34 Chairperson and two (2) of the Associate Commissioners shall be


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

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

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

No spouse or relative by consanguinity or affinity within the fourth civil
degree and no former law, business, or professional partner or
associate of any of the Commissioners, the Chairperson and the
Secretary of the Commission may appear as counsel or agent on any
matter pending before the Commission or transact business directly or


Ron

ZFS oar au

indirectly therein during his/her incumbency and within one (1) year
from his/her cessation of office.

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

(e) Quorum. - Three (3) members of the Commission shall constitute a

quorum and the affirmative vote of three members (3) shall be

necessary for the adoption of any rule, ruling, order, resolution,
decision or other acts of the Commission en banc.

Principal Office, Branch and Venue. — The Commission shall hold its

principal office in Metro Manila but it may conduct hearings outside of

(

Metro Manila upon prior notice for inquiries, studies or any other
proceedings required for the proper and efficient exercise of its power
and the discharge of its duties. It may establish branch offices outside
of Metro Manila as may be necessary for the effective discharge of its
functions.

(g) Staff. - The Commission shall appoint an adequate staff which shall
be headed by an Executive Director, fix the compensation in
accordance with the Revised Compensation and Position Classification
Law and determine their status, qualifications and duties. The
Executive Director shall be appointed by the President and shall have
relevant experience in any of the fields of law, economics, commerce,
management or finance for at least ten (10) years. Provided, That the
Executive Director shall be a Career Executive Service Officer (CESO)
The members of the technical staff, except those performing purely
clerical functions, shall possess at least a Bachelor's Degree in the
following lines of specialization: economics, preferably in industrial
organization; law; finance; commerce; accounting; or management.


1

SEC. 6. Original and Exclusive Jurisdiction, Powers and Functions —

2The Commission shall have original and exclusive jurisdiction to enforce and

3implement the administrative provisions of this Act, its implementing rules and

4regulations, and all other competition laws, and in particular:

5

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

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

7
8
9

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

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

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

(4) Deputization. - To require any government agency to lend assistance
and information necessary in the discharge of its responsibilities under
this Act, and examine, if necessary, pertinent records and documents
in the possession of such government agency;

(5) Issuance of Subpoena. — To issue subpoena, subpoena duces tecum
and subpoena ad testificandum in the exercise of its functions, powers
and duties under this Act, subject to the following standards:

i, No subpoena shall be issued to require the production or disclosure
of trade secrets as defined in paragraph (c)(2) hereof;

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 represented by a counsel of his choice, and if he has
none, the Commission shall appoint a de officio counsel for him;


1

and of his right to avail of the privilege of immunity from

2 prosecution herein prescribed;
3 (b) Powers of the Commission Upon Prior Notice and Hearing. - The
4Commission may exercise the following powers, only upon prior notice and
Shearing:
6 (1) Binding Rules - To issue binding rulings;
¥ (2) Show Cause Order and Decision - To issue show cause orders, and
8 thereafter, render decision thereon;
9 (3) Consent Judgment. To approve, or disapprove, proposals for consent
10 judgment,
u (4) Preliminary Inquiry - To conduct the required preliminary inquiry of
2 cases involving violations of this Act and other competition laws; and
13 thereafter, if appropriate, to sign and file the proper criminal complaint
14 before the Department of Justice; and
15 (5) Administrative Fines, Penalties and Sanctions — To impose the
16 appropriate administrative fines or penalties herein authorized to be
7 imposed.
18 (c) Other Powers and Functions of the Commission:
19 (1) Industry Studies and Company Profile. - To gather and compile
20 information and investigate from time to time, the way a given
21 industry is structured or organized whether as a monopoly,
2 oligopoly, or competitive; the way the firms within that industry act,
23 behave, or conduct themselves in such matters as setting prices,
24 determining output, and the resulting performance of the industry
25 as a whole; the organization, business, conduct, practices and
26 management of any person, partnership, or corporation engaged
27 in trade, commerce, or industry and its relation to individuals,
28 partnerships, associations, corporations, firms and other business
29 enterprises;
30 (2) Annual and Special Reports. - To require, by general or special
31 orders, firms engaged in trade, commerce, or industry to file with
32 the Commission in such form as the Commission may prescribe,
33 annual or special reports, or answers in writing to specific
34 questions, furnishing the Commission such information as it may


1 require as to the organization, business, conduct, practices,
2 management and relation to other persons of the respective
3 natural or juridical persons or entities filing such reports or
4 answers in writing except that the Commission shall not require,
5 either by a specific order or by a subpoena, the disclosure or
6 production of trade secrets such as a secret formula, pattern,
7 device or compilation of information, including names of
8 customers, which is used in one’s business and which gives one
9 an opportunity to-gbtain advantage over competitors who do not
10 know or use it. Trade secrets shall include a plan or process, tool,
ul mechanism, or compound known only to the owner and his
12 employees to whom it is necessary to confide it;

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

17 (4) Reports and Recommendations to Congress. - To submit annual
18 and special reports to Congress, through the Congressional
19 Oversight Committee on Fair Competition created under this Act,
20 including proposed legislation for the regulation of trade,
21 commerce, or industry, and provide for the publication of its
2 reports and resolutions in such form and manner as may be best
23 adopted for public information and transparency; and

24 (5) Trade Conditions, Domestic and Foreign. - To study, from time to
25 time, trade conditions in and with foreign countries where
26 associations, combinations, or practices of manufacturers,
27 merchants, or traders, or other conditions, may affect the foreign
28 trade of the Philippines, and report to Congress its findings and
29 recommendations thereon as it may deem advisable.

30 SEC. 7. Jurisdiction of Regional Trial Courts. - The Regional Trial

31Court shall have jurisdiction over cases arising from violations of the provisions
320f this Act.

33 With respect to personal actions arising from violations of the provisions of
34this Act, actions may be commenced and tried where the plaintiff or any of the


1 10

Iprincipal plaintiff resides, or where the defendant or any of the principal
2defendants reside, or in the case of a non-resident defendant, where he may be
3found, at the election of the plaintiff.

4 CHAPTER Ill
5 PROHIBITED ACTS
6 SEC. 8. Anti-competitive Agreements. — \t shall be unlawful for firms to

Tengage in horizontal and vertical agreements that prevent, distort or restrict
Scompetition, unless otherwise exempted.

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

ra ii, “Vertical agreement” means an agreement entered into between two

12 or more enterprises, each of which operates, for the purposes of the
13 agreement, at different levels of the production or distribution chain,
14 and relating to the conditions under which the parties may purchase,
1s sell or resell certain goods or services;

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

I7agreement if and when the Commission finds that two or more firms that are
18ostensibly competing for the same relevant market and actually perform uniform
190r complementary acts among themselves which tend to bring about artificial and
20unreasonable increase, decrease or fixing in the price of any goods or when they
2isimultaneously and unreasonably increase, decrease or fix the prices of their
22seemingly competing goods thereby lessening competition in the relevant market
23among themselves.

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

33 (b) Bid Rigging — Any agreement to fix prices at auctions or in any other

34 form of bidding, with the purpose and effect of creating a monopoly or


11

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

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

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

23more firms to abuse their dominant position, by engaging in unfair methods of

24competition, or in unfair or deceptive trade practices, or entering into

2Scombinations in the form of trust or otherwise, or conspiracy, with the purpose

26and effect to prevent, restrict, or distort competition. Abusive agreements such

27as, but not limited to, any of the following, shall be deemed to fall under the crime

280f abuse of dominant position:

29
30

(a) Predatory Behavior Towards Competitors — Any agreement, 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 agreement to limit or control
production, markets, technical development, or investment with the


12

purpose and effect of creating a monopoly or cartel, or lessening
competition;

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

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

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

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

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

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

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

(5) Price Differentials Due to Changing Market Conditions or
Marketability of Goods — Price changes from time to time in
response to changing conditions affecting the market or the
marketability of the goods concemed such as, but not limited to,
actual or imminent deterioration of perishable goods, obsolescence


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of seasonal goods, distress sales under court process, or sale on
good faith when a business is going to be discontinued.

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

(g) Tie-In Arrangements - Any agreement making the supply of particular
goods dependent upon the purchase or lease of other goods 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

20trade shall acquire, directly or indirectly, the whole or any part of the stock or

2lother share capital, or the whole or any part of the assets, of one or more firms

22engaged in any line of commerce or trade where the effect of such acquisition of

23such stocks, share capital, or assets, or of the use of such stock by voting or

24granting of proxies or otherwise maybe to substantially lessen competition, or

25tend to create a monopoly.

26

(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


14

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 own twenty
percent (20%) 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. 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 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:

(2) 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;


15

(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 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

27found to have violated Sections 8, 9 and 10 of this Act, or any combination

28thereof, shall, for each and every violation, be punished by a fine of not less than

29Ten million pesos (Php10,000,000.00) and not exceeding Fifty million pesos
30(Php50,000,000.00) if a natural person; by a fine of not less than Two hundred
31fifty million pesos (Php250,000,000.00) but not exceeding Seven hundred fifty
32million pesos (Php750,000,000.00) if a firm, at the discretion of the Commission.


1 16

1 In addition, a fine shall be imposed in an amount double the gross
2proceeds gained by the violator/s or double the gross loss suffered by the
3plaintiffs

4 (b) Failure to Comply With An Order of the Commission. - Any person
Swho fails or neglects to comply with any term or condition of a binding ruling, a
6cease and desist order or an order for readjustment issued by the Commission,
7shall pay a fine of not less than Fifty thousand pesos (Php50,000.00) for each
8violation. Each violation shall be deemed a separate offense: Provided, That in
othe case of a violation through a continuing failure or neglect to comply, each day
100f continuance of such failure or neglect shall be deemed a separate offense.

it (c) Supply of Incorrect or Misleading Information. - The Commission
12may likewise impose upon persons or entities fines of not less than Five
13thousand pesos (Php 5,000.00) to not more than One hundred thousand pesos
14(Php 100,000.00) where, intentionally or negligently, they supply incorrect or
15misleading information in any document, application or other paper filed with or
16submitted to the Commission or supply incorrect or misleading information in an
l7application or other paper filed with or submitted to the Commission or supply
18incorrect or misleading information in an application for a binding ruling, a
19proposal for a consent judgment, proceedings relating to a show cause order, or
20application for modification of the Commission's ruling, order or approval, as the
21case may be.

22 SEC. 12. Criminal Penalties. - Without prejudice to the violation of other
23laws, any firm that shall be found to have violated Sections 8, 9 and 10 of this
24Act, or any combination thereof, shall, for each and every violation, be punished
2Sby a fine of not less than Ten million pesos (Php10,000,000.00) and not
26exceeding Fifty million pesos (Php 50,000,000,00) if a natural person; by a fine of
27not less than Two hundred fifty million pesos (Php250,000,000.00) but not
28exceeding Seven hundred fifty million pesos (Php750,000,000.00) if a firm, and
29by imprisonment not exceeding ten (10) years, or both, at the discretion of the
30court.

31 In the alternative, a fine shall be imposed in the amount double the gross
32proceeds gained by the violator or double the gross loss suffered by the plaintiffs.
33 For purposes of determining the persons who will suffer the punishment of
34imprisonment as provided under the preceding paragraph, provisions of the


1 17

IRevised Penal Code, Title Il, Articles 16, 17, 18 and 19 on criminal liability of
2principals, accomplices, and accessories shall apply

3 CHAPTER V
4 ENFORCEMENT
5 SEC. 13. Preliminary Inquiry. — The Commission shall motu proprio, or

6upon the filing of a verified complaint by an interested party or upon referral by
Tthe concerned regulatory agency, initiate a preliminary inquiry for the
Senforcement of this Act.

9 No criminal or civil case for violation of this Act shall be filed or instituted
l0by a private party directly in court, unless there has been a preliminary inquiry
liconducted by the Commission and the same has been endorsed for filing by the
12Commission.

13 SEC. 14. Powers of Concerned Government Agencies—
14Notwithstanding the provisions of the preceding section, the exercise of
Isregulatory powers by different government agencies, including local government
l6units, over an industry or a sub-sector of an industry shall be cumulative and
I7shall not be construed in any way as derogating from the power and authority of
18the concerned agency. The government agencies shall cooperate and coordinate
19with one another in the exercise of their powers in order to prevent overlap, to
20share confidential information, or for other effective measures. The Commission
2Ican seek technical assistance from sectoral regulators.

22 The Commission shall have primary and sole jurisdiction over competition
23issues, while the regulatory body shall continue to exercise jurisdiction over all
24matters with regard to the firms’ operation and existence.

25 SEC. 15. Power to Investigate and Enforce Orders and Resolutions. -
26The Commission shall conduct preliminary inquiries by administering oaths,
2Tissuing subpoena duces tecum and summoning witnesses, and commissioning
28consultants or experts. It shall determine if any provision of this Act has been
29violated, enforce its orders and carry out its resolutions by making use of any
30available means, provisional or otherwise, under existing laws and procedures
3 including the power to punish for contempt and to impose fines.

32 SEC. 16. Self-incrimination.- Pursuant to the preceding section, a person
33who is the subject of any preliminary inquiry or investigation by the Commission
34shall produce the specified document or information when so required by written


1 18

Inotice: Provided, That no person shall be excused from disclosing any document
2or information to the inquiring officer on the ground that the disclosure of the
3information or document may be incriminating: Provided, further, That such
4document or information produced by the person who is the subject of
Sinvestigation shall not be admissible as evidence against the person in criminal
6proceedings: Provided, finally, That such document or information shall be
Tadmissible in evidence in civil proceedings including those arising from or”in
8connection to the implementation of this Act.

9 SEC. 17. Privileged Communication Exclusion.- Nothing in the
l0preceding section shall compel the disclosure of privileged communication:
11Provided, That the person who refuses to disclose the information or produce the
12document or other material required by the inquiring officer in relation to the
13preliminary inquiry being conducted shall nevertheless be obliged to give the
14name and address of the firm to whom, or by whom, or on whose behalf, such
15privileged communication was made.

16 SEC. 18. Confidentiality of Information.- Any document or information
17submitted by firms, as determined and marked confidential by the Commission,
18relevant to any investigation being conducted pursuant to this Act shall not, in any
19manner, be directly or indirectly disclosed, published, transferred, copied, or
20disseminated. The identity of persons who provide information to the
21Commission and who need confidentiality to protect themselves against
22economic retaliation, and any Commission deliberations_in regard to current or
23still uncompleted matters shall remain confidential.

24 Any violation of this provision shall be imposed a fine of not less than One
2Shundred thousand pesos (Php100,000.00) but not more than Five hundred
26thousand pesos (Php500,000.00).

27 SEC. 19. Leniency. - Any person or firm which cooperates or furnishes
28any information, document or data to the Commission before or during the
29conduct of the preliminary inquiry that constitutes material evidence as
30determined by the Commission under this Act shall be immune from any suit or
31charge including from affected parties and third parties: Provided, That the
32person or firm is not the most guilty. Provided, further, That any person or firm
33which cooperates or furnishes information, document or data to the Commission
34in connection to an investigation being conducted shall not be subjected to any


1 19

Iform of reprisal or discrimination: Provided, furthermore, That such reprisal or
2discrimination shall be considered a violation of this Act and subjected to the
3penalties provided for under Section 11 hereof.

4 Nothing in this section shall preclude prosecution for persons and firms
Swho reported to the Commission with malicious information, data and falsified
6documents which is damaging to the business and integrity of the persons and
Tfirms under inquiry. Such act shall likewise be considered as an unfair trade
Spractice punishable under this Act.

9 SEC. 20. Termination and Action on Preliminary Inquiry. — The
10Commission, after considering the statements made, or documents or articles
l1produced, in the course of an inquiry conducted by it, shall terminate the
12preliminary inquiry by issuing a resolution ordering its closure if no violation or
13infringement of this Act is found; or by issuing a nolo contendere resolution; or
ldissuing @ resolution to, singly or cumulatively, (a) impose penalties in the range
Isprovided under Section 11 hereof; (b) order the rectification of certain acts or
16omissions; or (c) order the restitution of the affected parties.

17 When determined by the facts and circumstances, the Commission shall
18institute a civil action by class suit in the name of the Republic of the Philippines,
19as parens patriae, on behalf of persons residing in the Philippines, to secure
20treble damages for any injury sustained by such persons by reason of any
2 violation of this Act, plus the cost of suit and reasonable attorney's fees.

2 If the evidence so warrants, the Commission shall file criminal cases for
23violation of this Act or relevant laws before the Department of Justice pursuant to
24Section 12 of this Act.
25 SEC. 21. Nolo Contendere Resolution. — Any firm under inquiry for
26violation of the provisions of this Act may submit to a nolo contendere resolution
27at any time before the termination of the preliminary inquiry by: a) the payment of
28an amount within the range of penalties provided for under Section 11 b) hereof
29by entering into an undertaking to effectively stop and rectify the acts complained
30against, make restitution to the affected parties, whether or not the parties are
3\plaintiffs or witnesses; and, c) by submitting regular compliance reports as may
32be directed: Provided, That ten percent (10%) of the amount paid under this
33section shall equitably accrue to the Commission: Provided, further, That a nolo


1 20

Icontendere resolution shall not bar any inquiry for the same or similar acts if
2continued or repeated

3 SEC. 22. Implementing Policy; Non-Adversarial Administrative
4Remedies. - As an implementing and enforcement policy, the Commission shall,
Sunder such rules and regulations it may prescribe, encourage voluntary
6compliance with this Act and other competition laws by making available to the
Tparties concerned the following and other analogous non-adversarial and non-
8adjudicatory administrative remedies, before the institution of administrative, civil
9or criminal action: .

10 (a) Request for Binding Ruling. — Any person who is in doubt as to whether
ll the contemplated or existing act, course of conduct, agreement,

12 decision or practice is in compliance with, is exempt from, or in
13 violation of any of the provisions of this Act, other competition laws, or
14 implementing rules and regulations thereof, may request the
15 Commission, in writing, to render a binding ruling thereon;

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

30 (c) Proposal for Consent Judgment. — At any time prior to the issuance of
31 a binding ruling, the promulgation of a cease and desist judgment
32 under a show cause order or the promulgation of a decision of
33 judgment in any administrative, civil, or criminal case, the person or

34 persons, whose business conduct is under inquiry in the particular


Card vsH¥ fk wH

fey

21

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 constitutes 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 the appropriate order requiring
the person or persons concerned to perform certain acts:

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

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

(3) Readjustment of Business Methods. - To readjust, within 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


ra

22

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) 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;

(i

Modification or Reversal of Ruling, Order or Approval. - The
Commission may motu proprio or upon petition of an interested party,
after notice and hearing, reopen and alter, modify, or set aside, in


1 23

1 whole or in part, a binding ruling, a cease-and-desist order, or an
2 approved consent judgment:

3 (1) Whenever conditions of material fact or law have so

4 changed as to require such action;

5 (2) When the concerned person or persons fail or refuse, without

6 justifiable cause therefore, to comply with any condition

7 attached to such ruling, order, or approval, including an order -

8 to readjust their method of doing business; or

9 (3) When the ruling, order, or approval was based on deliberately

10 __ falsified material fact, data, or information supplied’ by an

u interested party benefited by such ruling, order, or approval

12 The modification or reversal of a binding ruling, a cease and desist
13 order, or an approved consent judgment shall have no retroactive effect
14 and shall not affect or impair any right legally acquired prior to the
Is modification or reversal thereof, except, that the party who is guilty of
16 unjustified failure or refusal to comply as specified in paragraph (2) hereof,
17 or have deliberately supplied such falsified material fact, data or
18 information as specified in paragraph (3) above, is barred from claiming
19 any vested right therein.
20 SEC. 23. Standards. - In the exercise of its powers or in the discharge of
2lits duties under this act, the Commission shall consider the following:
22 (a)the way a given industry is structured or organized whether
23 monopolistic, oligopolistic, or competitive;
24 (b) the ways the persons engaged in business within a given industry act,
28 behave or conduct themselves in such matters as setting prices,
26 determining output, and other relevant factors and the resulting
rig performance of the industry as a whole;
28 (c) the supply and demand situation for the relevant goods or services;
29 (d) the appreciable impact of the particular market conduct on market
30 conditions, if any;
31 (e) the need to bring together complimentary skills to avoid duplication and
32 promote efficiency in the industry;
33 (® the need to determine whether or not the anticompetitive effect of a
34 particular market conduct may be offset by increased efficiency and
35 reduction of excessive or unnecessary expenses;

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


1 24

1 (h) the need to increase productivity in the particular industry involved;
2 (i) the state of the industry, including the need to develop it or to save it

3 from its distressed state;

4 (j) the need of the industry to work more rationally and increase their
5 productivity and competitiveness on a larger market;

6 (k) the need to respond to international competition and other
7 developments in the international market;

8 (I) the need to encourage or develop small and medium-sized industries;
9 (m) the impact of the market conduct on the economy and on the
10 consuming public, particularly low income groups;

rT (n) the need to pool capital resources:

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

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

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

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

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

20summarily punish for contempt by imprisonment not exceeding thirty (30) days or
2iby fine, or both, any person guilty of such misconduct in the presence of the
22Commission or any of its Divisions in its vicinity as to seriously interrupt any
23hearing, session or any proceedings before it, including cases in which a person
24willfully fails or refuses, without just cause, to comply with a summon, subpoena
25or subpoena duces tecum legally issued by the Commission or any of its Division,
26being present at a hearing, proceeding, session or investigation, refused to be
27sworn as a witness or to answer questions or to furnish information when lawfully
28required to do so.

29 SEC. 25. Decisions of the Commission. — Decisions of the Commission
30en banc shall be appealable to the Court of Appeals as hereinafter provided. The
3 appeal shall not stay the order, ruling or decision sought to be reviewed, unless
32the Court of Appeals shall direct otherwise upon such terms and conditions it may
33deem just.

34 SEC. 26. Appeal to the Court of Appeals. — Any party who has actively
35participated in the proceedings before the Commission and is adversely affected
36by a binding ruling, order, or resolution, decision, judgment, rule or regulation
37promulgation after notice and hearing by the Commission sitting en banc, may


1 25

lappeal, by means of a notice of appeal and a verified petition for review served

2upon the Commission and other parties who actively participated in the

3proceedings, to the Court of Appeals within thirty (30) days from receipt thereof,

4on 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;

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

Sowird.4

1 (© is not supported by substantial evidence.

n The Commission shall be included as a party respondent to the case and
12shall be represented by its own legal staff.

13 SEC. 27. Appeal to the Supreme Court. - A decision of the Court of
14Appeals may be appealed to the Supreme Court in the manner and on the
1Sgrounds prescribed by the Rules of Court.

16 SEC. 28. Reception of Additional Evidence. — Any party in the
l7appellate proceedings may apply for leave to the Court of Appeals or the
1sSupreme Court, to adduce additional evidence before the Commission. The
19Court may, under such terms and conditions as it may prescribe, order the
20Commission to receive such additional evidence upon showing that it is material
2l1and there are reasonable grounds for the failure to present said evidence in the
22proceedings before the Commission. The Commission, sitting en banc, may
23modify its findings as to the facts, or make new findings, by reason of the
24additional evidence taken, and it shall file with the appellate court such modified
250r new findings and its recommendations for the affirmation, modification, or
26setting aside of the appealed binding ruling, order, resolution, decision, judgment,
27rule or regulation.

28 SEC. 29. Writ of Execution. — Upon the finality of its binding ruling,
290rder, resolution, decision, judgment, or rule or regulation, (collectively,
30"Decision"), the Commission may issue a writ of execution to enforce its
31decision and the payment of the administrative fines provided in the preceding
32sections.

33 SEC. 30. Violation by Corporation, Partnership, Association, and
34Other Entity. — Whenever a corporation, partnership, association, firm or other


é 26

lentity, whether domestic or foreign, shall commit any of the acts declared to be

2unlawful under this Act, the Chairperson of the Board of Directors, the President,

3the General Manager of the corporation, the general partners of a partnership,

4and the officers and employees directly responsible, shall be jointly and severally
Sliable with the firm for the fine imposed therein.

6 Should the offense be committed by a foreign corporation licensed to do

Tousiness in the Philippines, the person or persons directly responsible in the
8Philippines for the management and operation thereof, shall be liable. In

9addition, its license to do business in the Philippines shall be cancelled.

10 It shall not be a defense for the Chairperson of the Board of Directors, the
11President or the General Manager of a corporation or the general partners of a
l2partnership, or the persons responsible for the management and operation of a
13foreign corporation licensed to do business in the Philippines, that the person
l14was unaware of the violation, unless, it can be established to the satisfaction of
15the court that even with the exercise of due diligence and proper supervision, the
16person could not have avoided or prevented the violation.

17 Any agreement between an officer, partner or any other officer and a
18corporation or partnership whereby the latter directly or indirectly agrees to
19assume, satisfy or indemnify, in whole or in part, the fine of civil obligation
20imposed under this Act of such corporate officer, partner, manager or other
2lofficer found guilty of violating this Act, shall be void.

2 SEC. 31. Alien Violators. — If the person violating any provision of this
23Act is a foreigner, said person shall, in addition to the other penalties imposed
24herein, be deported after service of sentence without need of any further
25proceedings.

26 SEC. 32. Essential Commodities. — If the violation involves the trade or
27movement of prime commodities such as rice, corn, sugar, chicken, pork, beef,
28fish, vegetables, and other articles or commodities of prime or basic necessity as
29declared by the appropriate government agency, through publication, the fine
30imposed by the Commission or the courts, as the case may be, shall
3 lautomatically be tripled and the offender shall pay such threefold fine.

32 SEC. 33. Private Action. — Regardless of the status or pendency of any
33proceedings, any firm that suffers injury by reason of any violation of this Act may
34institute a separate and independent civil action, irrespective of the amount


1 27

involved in the controversy against the defendant or defendants and shall recover
2treble damages sustained, the costs of suit and reasonable attorney's fees:
3Provided, however, That no filing fees shall be collected: Provided, further, That
4filing fees shall constitute a first lien in the award of damages.

5 SEC. 34. Effect of Final Judgment. — Any final judgment in a civil or
6criminal action brought by the Commission on behalf of the people of the
7Philippines under this Act to the effect that a defendant has violated any or all’of
8the 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
l0court having jurisdiction of the case within the period given by the court:
11Provided, further, That such period shall not be less than ninety (90) days.

12 It shall be prima facie evidence against such defendant in any civil action
13brought by any other party under this Act as to all matters respecting which said
14judgment would be an estoppel as between the parties concerned.

15 SEC. 35. Distribution of Damages Recovered. — The damages
16recovered in a civil action under Section 20 of this Act shall be distributed in the
17following manner: (1) as determined and to be authorized by the Court having
I8jurisdiction of the case; (2) ten percent (10%) of the total amount of damages
19shall accrue to the Commission and/or regulatory agency to be used exclusively
20in the enforcement of this Act; and, (3) the remainder of which total amount of
21damages shall be deemed a civil penalty by the Court and shall be deposited to
22the National Treasury as part of the general fund of the government: Provided,
23That any distribution procedure adopted by the Court shall give preference to
24individual consumers and afford each interested person a reasonable opportunity
25to secure his appropriate portion of the net damages obtained.
26 SEC. 36. Measurement of Damages. — Damages may be proved and
27assessed in the aggregate by statistical or sampling methods, by the computation
28of illegal overcharges, or by such other reasonable system of estimating
29aggregate damages as the court in its discretion may permit without the necessity
300f separately proving the individual claim, of, or amount of damage to, persons on
3 whose behalf the suit was brought

32 SEC. 37. Immunity from Suit. — The Commissioners and the Staff of the
33Commission shall not be subject to any action, claim or demand in connection
34with any act done or omitted by them in the performance of their duties and


1 28

lexercise of their powers, except for those acts and omissions done in evident bad
2faith or gross negligence.

3 The Commission shall indemnify each Commissioner and Staff of the
4Commission for all costs and expenses reasonably incurred by such persons in
Sconnection with any civil or criminal actions, suits or proceedings to which they
6may be or made a party by reason of the performance of their duties or exercise
7of their powers, unless they are finally adjudged in such actions or proceedings to
8be liable for evident bad faith or gross negligence.

9 %s CHAPTER VI
10 7 OTHER PROVISIONS
11 SEC. 38. Statute of Limitations. — Any civil or criminal action to enforce

12any cause of action arising from a violation of any provision of this Act shall be
13forever barred unless commenced within five (5) years after the cause of action
I4accrues. The running of the statute of limitation shall be suspended during the
ISpendency of any proceeding.

16 The cause of action begins to run when the plaintiff suffers injury to its
ITbusiness or property: Provided, That when the damage suffered by the plaintiff is
18too speculative to prove, the cause of action does not accrue until the damage
19becomes probable: Provided, however, That if the plaintiff's injury is the result of
20the continuing violations of this Act, each independent anti-competitive act may
2Irestart the limitation period or when a plaintiff reasonably fails to uncover a cause
22or action that was fraudulently concealed by a defendant.

23 SEC. 39. Prohibition on the Issuance of Temporary Restraining
240rders, Preliminary Injunctions and Preliminary Mandatory Injunctions. —
25Except for the Supreme Court, no other court shall issue any temporary
26restraining order, preliminary injunction or preliminary mandatory injunction
27against the regulatory agency in the exercise of its duties or functions: Provided,
28That, this prohibition shall apply in all cases, disputes or controversies instituted
29by a private party, including, but not limited to, cases filed by regulated firms or
30those claiming to have rights through such firms: Provided, however, That, this
3 prohibition shall not apply when the matter is of extreme urgency involving a
32constitutional issue, such that the non-issuance of a temporary restraining order
33will result in grave injustice and irreparable injury to the public: Provided, further,
34That, the applicant shall file a bond, in an amount to be fixed by the Court, but in


1 29

Ino case shall it be less than half of the imposable fines provided for under
2Section 11 of this Act: Provided, finally, That in the event that the court finally
3decides that the applicant was not entitled to the relief applied for, the bond shall
4accrue in favor of the regulatory agency.

5 Any temporary restraining order, preliminary injunction or preliminary
6mandatory injunction issued in violation of this section is void and of no force and
Teffect. Any judge who violates this section shall be penalized by suspension of at
8least one (1) year without pay in addition to other criminal, civil or administrative
9penalties. ~

10 The Supreme Court may designate regional trial courts to act as
11commissioners with the sole function of receiving facts of the case involving the
I2acts of the regulatory agency. The designated Regional Trial Court shall, within
13thirty (30) days from the date of receipt of the referral, forward its findings of facts
14to the Supreme Court for appropriate action.

15 SEC. 40. Intellectual Property Rights. - The implementation of the
léprovisions of this Act shall be without prejudice to the rights, liabilities and
l7remedies under Republic Act No. 8293, otherwise known as the Intellectual
18Property Code of the Philippines: Provided, That, the exercise of intellectual
19property rights shall not in any way be used to justify violations of this Act.
20 SEC. 41. Trade Associations. — Nothing contained in this Act shall be
21construed to prohibit the existence and operation of trade associations organized
22t0 promote quality standards and safety issues: Provided, That, these
23associations shall not in any way be used to justify any violation of this Act.
24 SEC. 42. Congressional Oversight Committee. - To oversee the
25implementation of this Act, there shall be created a Congressional Oversight
26Committee on Fair Competition (COCFC) to be composed of the Chairpersons of
27the Senate Committees on Trade and Commerce, Economic Affairs, and
28Finance; the Chairpersons of the House of Representatives Committees on
29Trade and Industry, Economic Affairs and Appropriations; and two members each
30from the Senate and the House of Representatives who shall be designated by
3ithe Senate President and the Speaker of the House of Representatives:
32Provided, That one of the two Senators and one of the two House Members shall
33be nominated by the respective Minority Leaders of the Senate and the House of
34Representatives. The Congressional Oversight Committee shall be jointly chaired


1 30

lby the Chairpersons of the Senate Committee on Trade and Commerce and the
2House of Representatives Committee on Trade and Industry. The Vice-Chair of
3the Congressional Oversight Committee shall be jointly held by the Chairpersons
4of the Senate Committee on Economic Affairs and the House of Representatives
SCommittee on Economic Affairs.

6 The Secretariat of the Congressional Oversight Committee on Fair
7Competition shall be drawn from the existing personnel of the Senate and House
8o0f Representatives committees comprising the Congressional Oversight

9Committee. ~

10 CHAPTER VII

a FINAL PROVISIONS

2 SEC. 43. Implementing Rules and Regulations. - The Commission

13shall prepare the necessary rules and regulations within one hundred twenty
14(120) days from the effectivity of this Act: Provided, That, where the same would
1Sapply to an industry or a sub-sector of industry that is subject to the jurisdiction of
16a regulatory agency, the Commission shall, in preparing the guidelines, consult
17with the concerned regulatory agency and stakeholders: Provided, further, That
18the Commission may revise such guidelines as it deems necessary: Provided,
19however, That such revised guidelines shall only take effect following its
20publication in two newspapers of general circulation.

21 SEC. 44. Appropriations. — The amount necessary to implement the
22provisions of this Act shall be included in the annual General Appropriations Act.
23However, for the initial budgetary requirements of the Commission, the amount of
24One hundred million pesos (P100,000,000.00) is hereby appropriated: Provided,
25That all moneys recovered or charges or composition sums collected under this
26Act, other than financial penalties, shall be paid into and form part of the moneys
27of the Commission.

28 SEC. 45. Transitory Provision. - For the purpose of ensuring that the
29Commission is organized within the mandated period of one hundred eighty (180)
30days after the approval of this Act, an Inter-Agency Task Force shall be created
3 land composed of the following agencies:

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


1 31

1 i, Office of the President, to be represented by the Executive
2 Secretary with the Deputy Executive Secretary for Legal Affairs as
3 alternate;

4 ii, Department of Budget and Management, to be represented by the

5 Secretary with the Undersecretary in charge of organization of new

6 offices and position classifications as alternate;

7 b) Agencies which currently perform functions germane or are related"to

8the purposes of the Commission:

9 i. Tariff Commission, to be represented by the Chairperson and with
10 _ an Associate Commissioner permanently designated as alternate;
u ji, Department of Trade and Industry, to be represented by the
12 Secretary with the Director of the Bureau of Trade Regulation and
B Consumer Protection as alternate representative;

4 ili, Department of Justice, to be represented by the Secretary with an
1s officer holding at least an Assistant Secretary rank as alternate.
16 The Task Force shall also meet in Executive Session with all the agency

ITheads to deliberate on possible appointees for the position of Chairperson and
18Associate Commissioners of the Commission for submission to and consideration
190f the President of the Philippines.

20 The Task Force shall also commence the coordinated advocacy for this
21Act within ninety (80) days from the effectivity thereof. It shall also implement a
22broad-based consultation on inputs for the Implementing Rules and Regulations
230f this Act which must be completed within one hundred twenty (120) days from
24the effectivity of this Act. The report on the consultations shall be submitted to the
25Commission within fifteen (15) days from its establishment a copy of which will be
26furnished to the Congressional Oversight Committee on Fair Competition.

27 SEC. 46. Suppletory Application. - For purposes of this Act, the
28Revised Penal Code, as amended, and other applicable laws shall be applied in
29a suppletory character.

30 SEC. 47. Separability Clause. — If any clause, sentence, section or part
31of this Act shall be adjudged by a court of competent jurisdiction to be invalid,
32such judgment shall not affect, impair or invalidate the remainder of this Act, but


1 32

Ishall be confined in its operation to the clause, sentence, paragraph, section, or
2part thereof directly involved in the controversy

3 SEC. 48. Repealing Clause. — The following laws, insofar as they are
4inconsistent with any of the provisions of this Act, are hereby repealed, amended
Sor otherwise modified accordingly:

6 (a) Sec. 5 (3) of Republic Act No. 7581 or The Price Act;

7 (b) Sec. 5 (f) of Republic Act No. 7925 or The Public Telecommunications

8 Policy Act;
9 (c) Sec. 11 (a) and (b).of Republic Act No. 8479 or The Downstream Oil
10 Industry Deregulation Act;

11 (d) Sec. 45 of Republic Act No. 9136 or The Electric Power Industry Reform
12 Act;

13 (e) Sec. 13 of Republic Act No. 9295 or The Domestic Shipping Development
14 Act;

15 (f) Sec. 24 and 25 of Republic Act No. 9502 or The Universally-Accessible
16 Cheaper and Quality Medicines Act.

7 Provided, That in case of conflict between this Act and such provisions of
1Sexisting competition laws and regulations, the provisions of this Act shall prevail
19 SEC. 49. Effectivity Clause. — This Act shall take effect fifteen (15) days
20following its publication in the Official Gazette and in at least two (2) national
2Inewspapers of general circulation: Provided, however, That in order to allow
22affected parties time to renegotiate agreements or restructure their business to
23comply with the new competition law, the penal provisions under Section 12 of
24this Act, except for those already prohibited under the Revised Penal Code, shall
25be imposed one (1) year after the effectivity of the Implementing Rules and
26Regulations of this Act.

27 Approved,