Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Sixteenth Congress
First Regular Session

4587

House Bill No

Introduced by AKBAYAN Representatives
Ibarra “Barry” M. Gutierrez III and Walden F. Bello

EXPLANATORY NOTE

‘The 1987 Philippine Constitution in its Article XII (National Economy and Patrimony), Section 19

mandates the State to regulate or prohibit monopolies when public interest so requires, and

contains an express prohibition against combinations in restraint of trade or unfair competition.

Indeed, policies and laws on competition are key economic issues that we, as a people, must
address. Laying down rules and regulations on competition is fundamental in order for us to
modernize our economy. Cartels, bid-rigging in public contracts, abuse of dominant position by

big players in certain industries, monopoli

., monopsonies and oligopolies continuously violate
basic competition precepts but lack of clear and modern competition laws allow unscrupulous

business entities to violate these precepts with impunity

Particular attention must be given to the welfare of marginalized producers and service
providers—mostly farmers and fisherfolk with regard to their agricultural products—who
become victims of monopsonies or the nefarious practice whereby a single buyer dictates the
price of products and services. Oftentimes, the monopsonist, as the creditor who advanced
financial capital to the marginalized producer, does not give any bargaining power to
marginalized producers and service providers. It is not surprising, therefore, that the harmful
effects of unfair business conducts fall upon the shoulders of marginalized sectors and,

unfortunately, fall so more heavily during times of calamities.


At present, Philippine laws that regulate business conduct, commerce and trade are confined to
provisions of Act No. 3815 ot the Revised Penal Cade of the Philippines, These penal provisions lack

teeth and ate not effective to deter anti-competitive behavior in a modern setting,

‘The Philippines need competition laws that will better protect the marginalized consumers and

producers. Busine

should be allowed to operate and compete solely on the basis of fairness,
innovation, efficiency and competence instead through cartels, abuse of dominant position,

monopolistic mergers and similar business practices.

Proposals in this bill would enable the State to provide greater protection to its people by

prohibiting and penalizing unscrupulous and unfair business conducts.

In view of the foregoing, the immediate passage of this bill is earnestly sought.

IBARRA “BARI a Crnne i WALDEN'F. BELLO


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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Sixteenth Congress
First Regular Session

House bill No, 4587

Introduced by AKBAYAN Representatives
Ibarra “Barry” M, Gutierrez III and Walden F. Bello

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

Be it enacted by the Senate and the Hlouse of Representatives of the Philjppines in Congres assembled:

CHAPTER I
GENERAL PROVISIONS

SECTION 1, Title—This Act shall be known and cited as the “Fair Competition Act of 2014.”

SECTION 2. Declaration of policy—Pursuant to Section 19, Article XI of the 1987
Philippine Constttuion, which mandates the State to regulate or prohibit monopolies when the
public interest so requires and which contains an express prohibition against. allowing
combinations in restraint of trade and unfair competition, it is hereby declared the policy of the

State to:

(@ Protect the interest of consumers, especially the economically marginalized sectors of

society:

(b) Promote and enhance economic efficiency and free, full and fair competition in trade,

industry and all commercial economic activities;


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(©) Prevent the concentration of economic power in a few persons or firms which threaten to
control the production, tade, or commerce in goods and services in order to stifle
competition, distort, manipulate or constrict the discipline of free markets, increase market

pices in the Philippines; and

(@) Penalize all forms of anti-competitive agreements, abuse of dominant position, anti
competitive mergers, and other forms of anti-competitive behavior, with the objective of
protecting consumer welfare and advancing domestic and international trade and economic

development.

all be enforced within

SECTION 3. Scope and application—Che provisions of this Act s

the territory of the Philippines and shall apply to all areas of manufacturing, services, trade,

industry and all kinds of commercial economie activity.

Its 1, substantial

and reasonably foreseeable effects on trade, industry or commerce in the Philippines, including

all also apply to international trade activities committed abroad that have di

those effects that result from acts done outside the territory of Republic of the Philippines.

‘The Act shall apply to:

(a) All firms and persons as defined hereunder and all their commercial agreements, actions ot

transactions involving goods, services or intellectual property; and,

(b) All agents, officers, employees, partners, owners, directors, consultants, stockholders,
representatives, managers, supervisors, and all other natural persons who, acting on behalf of
juridical persons, shall authorize, engage or aid in the commission of restrictive practices

prohibited under this Act.
This Act does not apply to combinations, activities, agreements or arrangements of employees,
or between employees and employers, which are designed solely to facilitate collective bargaining

in respect of terms and conditions of employment.

SECTION 4. Definition of terms.—As used in this Act:


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(a) “Agrement®” refer to any type or form of contract, arrangement, understanding, undertaking

‘of concerted action, whether formal or informal, written or verbal.

(b) “Carte?” refers to:

(1) A combination of at least two (2) firms providing goods in a relevant market, acting or
joined together in order to unduly affect or control production, sale and price, or in
order to obtain control in any particular industry or commodity,

2 A group of firms that agree to restrict trade, or

irms or sections of firms having common interest designed to promote the exchange of

and

knowledge resulting from scientific and technical research, exchange of patent rights
standardization of products among themselves with the intent of preventing, restricting,

or distorting competition,

(©) “Commission?” refers to the Philippine Fair Competition Commission,

(@) “Competition” shall mean the process by which economic agents, acting independently in a

market, limit each other’s ability to control the prevailing conditions in the market,

(©) “Conglomerate? refers to

(1) A firm or business enterprise having different economic activities in different unrelated
industries,

2) A group of separate corporations or firms engaged in different economic activities in
unrelated industries and owned by a common parent or holding company, ot

(3) Different firms with interlocking ownership that allows them to act in concert, as if they

were simply divisions of a single entity,

Conglomerate firms may emerge through mergers and acquisitions and/or investments across a
diverse range of industries for a variety of reasons such as minimization of tisk, increased

access to financial and management resources, and more efficient allocation of resources.


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“Contro?? refers to at least twenty percent (20%) ownership, directly or indirectly, of a firm or

a group of firms by another firm or person.

“Dominant position” refers 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

excluding competitor firms, or controlling the market in a

or service by fixing its price

specific geographical area.

“Firms? refers 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, which is engaged directly or indirectly in any economic

‘one of which is controlled by the other, shall be treated as

activity: Provided, That two firm:

‘one firm: Provided, further, That two or more firms that are controlled by a single firm shall be

treated as one firm.

“Goods? refer to all types of tangible and intangible property that could be bought and sold,
and the possession of and/or rights over which could be transferred in whole ot in part,

temporatily or permanently.

“Semiees” refer to provision of things of value or articles or items that could be used by one
person, whether natural or juridical, to another through human interaction ot 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 which does not result in ownership.

“Market” refers to a place ot 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. Market also refers to the

geographical or economic extent of commercial demand,

“Relenant marke?” refers to the line of commerce in which competition has been restrained.
also refers to the geographic area involved, including all reasonably substitutable goods, and
all competitors, t> which consumers could turn if the restraint or abuse results in the

significant increase in prices.


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(W) “Mergen?” refer to situations where two or more undertakings, previously independent of one

another, join together.

Mergers include transactions whereby:

(1) ‘Two companies legally merge into one (mergers)

(2) One firm takes sole control of the whole or part of the stock or assets of another
(acquisitions or takeovers),

(3) Two or more firms acquire joint control over the stock or assets of another firm (joint
ventures), and

(4) Similar transactions, whereby one or more undertakings acquire control over one or

mote undertakings, such as interlocking directorates.

It shall also include acquisition of all or substantially all of the assets of one or more firms by

‘one or more firms.

() “Monopoly” refers to a privilege or undue advantage of one or more firms, consisting in the

exclusive tight to carry on a particular business or trade, and/or manufacture a particular
product, article or object of trade, commerce ot industry. Monpoly is a market structure in

which one of only a few firms dominate the total sales of a product or service.

CHAPTER IL
PROHIBITION AGAINST CARTELS
AND OTHER ANTI-COMPETITIVE AGREEMENTS

SECTION 8. Cartels and other anti-competitive agreements—All agreements, collective
decisions and recommendations, and concerted practices, which have for their object, result in,
translate into, or have the possibility to restrict, impede, distort, or reduce competition in the

relevant market in the Philippines or any part thereof shall be prohibited.

(a) Prive fixing—Any agreement among competitors to raise, suppress, fix ot otherwise maintain
the purchase or selling prices of goods and services such as, but not limited to, establishing or

adhering to price discounts, holding prices firmly, eliminating or reducing discounts, adopting


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a standard or formula for computing prices, maintaining certain price differentials between
different types, sizes or quantities of products, adhering to a minimum fee or schedule and

other analogous schemes, is hereby prohibited.

(1) Particular importance shall be given to protecting marginalized farmers, fishers, service
providers, small or individual contractors, and other marginalized sectors from price-fixing
agreements that impose unfair prices paid for their products and/or services.

(2) ‘The implementing rules and regulations of this Act shall provide for enforcement
mechanisms to promote the interest of marginalized farmers, fishers, service providers,
small or individual contractors,

Predatory bebavior towards competitors. —Any agreement, including, but not limited to, selling goods

and/or services at below relevant cost with the intent of driving other competitors out of the

market, or creating barriers to entry, is hereby prohibited.

Limitation and contral of markets, production, technical development, or investment—Any agreement to

limit or control production, markets, technical development, or investment is hereby

prohibited.

Market allocation:

Any agreement to divide the market, whether by volume of sales ot
purchase ot by territory, by type of goods sold or purchased, by customers o sellers/suppliers

ot by any other means, is hereby prohibited.

Arrangements to share markets or sources of supply.—Any agreement to share markets ot sources of

supply of raw materials is hereby prohibited,

Price and other forms of diserimination-—Any agreement to apply dissimilar conditions to equivalent

transactions with other trading parties, thereby placing them at a competitive disadvantage,

including price discrimination, or an agreement prescribing or charging, directly or indirectly,
disctiminatory pricing terms or conditions in the supply or purchase of goods of like grade and
quality is heteby prohibited: Provided, hat nothing in this Act shall be interpreted 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 for the less fortunate sectors and areas of the economy.
(2) Changes in prices in response to changing conditions affecting the market or the
marketability of the goods and/or services concerned such as, but not limited to, actual or
imminent deterioration of perishable goods, technological improvements in new
substitutable products and/or services, lower prices of new products and/or services,
obsolescence of goods and/or services, distress sales under court process, or sale on good

faith in discontinuance of business.

(g) Exclusivity amagement—Any agreement imposing restrictions upon the buyer-distributor,
client, of lessee concerning where, to whom, or in what forms goods may be sold or traded by
the latter, such as, but not limited to, fixing prices, or giving preferential discounts, ot rebate
upon such price, or imposing conditions not to deal with competing firms, is hereby
prohibited; Provided, That nothing in this Act shall be interpreted as a prohibition against

permissible franchising, licensing or exclusive distributorship agreements.

(h) Tien arrangement—Any agreement making the supply of particular goods and/or the rendering
of services dependent upon the purchase or lease of other goods and/or services from the
supplier or its consignee, and all other acts, obligations, and conditions that make the
conclusion of contracts subject to acceptance by the other party of supplementary obligations
which, by their nature ot according to commercial usage, have no connection with or could be

separate from the subject of such contacts, is hereby prohibited.

Reasonable exemptions from the prohibited acts in subparagraphs (a) to (h) of this Section should

be provided for in the implementing rules and regulations.

( Boyeott—Any concerted refusal to sell or conspiracy not to sell or to stop doing business on

the part of the s for a legitimate purpose, is hereby

suppliers of any kind of goods, unl

prohibited.

() Bid rigging—Any agreement to fix price at auctions or in any other form of bidding, with the
purpose and effect of creating a monopoly or cartel, or lessening competition such as, but not
limited, to cover bidding, bid suppression, bid rotation and market allocation and other

analogous practices of bid manipulation is hereby prohibited.


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In determining whether there is price fixing or bid rigging, as prohibited under subparagraphs (a) and

@) of this Section, 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 o consumers.

2) Unjustifiable 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) Whenever a seller refuses to sell by reason of on an agreement with a competitor

(4) That a firm has repeatedly been the low bidder and has been awarded contracts for a certain
service, or that a particular bidder wins bids on a fixed-rotation.

Unusual and unexplainable difference beeween the winning bid and all other bids.

(6) That the same bidder bids substantially higher on some bids than on others, and there is no

logical cost reason to explain the difference,

SECTION 9.

the prohibited acts of cartel and other anti-competitive agreements as enumerated
in this Chapter may consist of horizontal or vertical agreements, or both, that prevent, distort ot

restrict competition.

“Horizontal agreement? means an agreement entered into between two or more enterprises operating,

at the same level in the market. “Vertical agreement” means an agreement entered into between two

arate entities

or mote enterprises, regardless of ownership thereof, ench of which operates as s

for the purposes of the agreement, at a different level of the production or distribution chain, and

relating to the conditions under which the parties may purchase, sell or resell certain goods or

service:

‘ndings by the Commission that (1) two or more firms which are ostensibly competing for the
same relevant market are actually performing uniform or complementary acts between themselves,
which acts tend to bring artificial and unreasonable increase, decrease or fixing in the price of
goods, or (2) two or more firms simultaneously and unreasonably increase, decrease ot fix the

prices of their seemingly competing goods, which increased, decreased or fixed price lessens


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competition in the relevant market, shall be considered prina facie evidence of an anti-competitive

agreement.

‘The Commission shall provide guidelines that may be used to determine that anti-competitive

behavior caused changes in prices of goods or services.

CHAPTER III
PROHIBITION AGAINST MONOPOLY, MONOPSONY AND ABUSE OF
DOMINANT POSITION,

SECTION 10. Notwithstanding the provisions of Article 186 of Act No. 3815 otherwise known
as the Revised Penal Code of the Philjppines which penalizes monopolies and combinations in restraint
of trade, any abuse by one or more firms of a dominant position within the relevant market or a

substantial part of the relevant market, including acts which constitute monopsony, is hereby

prohibited.

Abuse of dominant position may consist of any of the following

a) Directly or indirectly imposing unfaiely low selling prices directed at driving out competition or
ly ly imposing ly iB 8 r
preventing new firms from entering the market or unfairly imposing unusually high selling

prices in order to exploit the absence of choices available to consumers, buyers and clients.

(b) Ditectly or indirectly imposing unfairly low purchase prices for the goods and/or services of,
among others, marginalized agricultural producers, fisherfolk, micro-, small- and medium-seale
enterprises, and other marginalized service providers and producers, by taking advantage of

their inability to bargain for fair prices for their products and services.

(©) Limiting production, markets or technical development to the prejudice of consumers.

(@ Applying dissimilar conditions to equivalent transactions with other trading parties, thereby

placing them at a competitive disadvantage.


(© Making the conclusion of contracts subject to acceptance by the other parties of
supplementary obligations which, by their nature or according to commercial usage, have no

connection with or could be made separable from the subject of such contracts.

CHAPTER IV
PROHIBITION AGAINST ANTI-COMPETITIVE MERGERS AND ACQUISITIONS

SECTION 11. Anti-competitive mergers and acquisitions —No firm engaged in commerce or

trade shall acquire, directly or indirectly, the whole or any part of the stock or other share capital,

or the whole ot any part of the assets, of one or more firms engaged in any line of commerce or

trade where the effect of such acquisition of such stocks, share capital, or assets, or of the use of

such stock by voting or granting of proxies or otherwise may be to substantially lessen
competition, or tend to create a monopoly, or allows an entity, whether alone or with related

entities, to obtain a dominant position within the relevant market.

(a) Nothing in this Act shall be interpreted 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, ot in
attempting to bring about, the substantial lessening of competition; or

2) A corporation from causing the formation of subsidiary corporations, or from owning and

holding all or part of the stock of such subsidiary corporations, for the actual carrying on
of their immediate lawful business, or the natural and legitimate branches or extensions

thereof.

(b) No fitm shall acquire, directly or indirectly, the shares of stock or assets of any other firm, if as
a result of the acquisition, the acquiting firm would own twenty percent (20%) or more of the
shares of stock ot assets of the acquired firm, unless both the acquiring and selling firm have
notified the Commission of such proposed acquisition, Such notification shall be made prior
to the conclusion of the agreement for such acquisition and shall be accepted only if made in

compliance to the required form of the Commission,

Only the acquiring firm is required to make the notification in a tender offer.

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(© The following classes of transactions ai

notwithstanding, the following acts

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 would not violated any of the provisions of 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, in accordance with the procedure prescribed herein for the disposition

of a show cause order.

exempt from the prior notice requirement under this

Section:

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

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

(3) Acquisitions of an issuer's voting securities by an acquiring firm which owns at least fifty
percent (50%) of the voting securities of the issuer prior to such acquisition.

(4) Transactions expressly exempted and not covered by this Act and other laws.

(8) Acquisitions, solely for the purpose of investment, of voting securities, if as a result of such
acquisition the securitics acquired or held do not exceed ten percent (10%) of the
outstanding voting securities of the issuer.

(6) Acquisitions of voting securities pursuant to the preemptive rights of the acquiring firm.

@ Acquisitions of voting securities which do not result to an inerease, directly or indireetly, of

the acquiring firm’s per centum share of outstanding voting securities of the issuers.

(8) Such other acquisitions, transfers, or transactions which the Commission may declare as

are not likely to violate this Act or other laws.

CHAPTER V
PROHIBITION AGAINST OTHER FORMS OF ANTI-COMPETITIVE BEHAVIOR

SECTION 11, Other prohibited acts —The absence of dominant position or monopoly power

ire prohibited and made unlawful:

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(a) For a lessor ot landowner to compel the lessee, sub-lessee or tenant to obtain one or more
goods and/or services only from sources determined or specified by the former.

(b) For a lessor or landowner to unduly influence the sourcing of inventory of the tenant, lessee
ot sub-lessee, or the latter’s choice of suppliers and service providers

(©) Fora cteditor to compel the debtor to buy or sell goods and/or services only from the former,

or persons designated by the said creditor.

(@) Other acts of similar narure.

SECTION 12. Conglomerates—The use by a conglomerate, or any of its member firms, of
economic power in order to impede or frustrate fair competition or in order to take advantage of

consumers is hereby prohibited

CHAPTER VI
PHILIPPINE FAIR COMPETITION COMMISSION

ion

SECTION 13. Philippine Fair Competition Commis

which shall be known as the Philippine Fair Competition Commission, referred to in this Act as

—An independent Commission,

Commission, is hereby created. It shall be under the Office of the President for budgetary

purposes,

‘The Commission shall implement the national policy and shall enforce the provisions of this

Act. It shall be organized within one hundred eighty (180) days after the approval of this Act.

(8) Composition of the Commission

The Commission shall be composed of a Chairperson and four (4) A

Commissioners
‘The Commissioners shall be citizens and residents of the Philippines, at least forty (40) but
not more than sixty-five (65) years of age, of good moral character and of recognized probity

and independence.

‘The Chairperson and two (2) of the Associate Commissioners shall be members of the

Philippine Bar and the remaining two (2) shall be of recognized competence in the field of

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(b)

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economics preferably in industrial organization economics, or finance, commerce,
accounting or management. They must have been in the active practice of their professions
for at least ten (10) years, and must not have been losing candidates for any elective national

or local office in the immediately preceding elections, whether regular or special.
‘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) y

ars.

In case a vacancy occurs before the expiration of the term of office, the appointment to such

‘essor,

vacancy shall be only for the unexpired term of the pred
Probibition and Disqualifcations

‘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 ot any subdivision, agency, ot 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

ation from office. They

run for any office in the election immediately succeeding their ces

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 and

of the Chairperson may be allowed to (1) appear as counsel or agent on any matter pending

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@)

3)

before the Commission or (2) transact business directly or indirectly therein during their

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

Compensation of Commissioners
The Chairperson shall hold the rank of and shall have the privileges and compensation
equivalent to that of a Presiding Justice of the Court of Appeals, ‘The Associate

Commissioners shall each hold the rank of and shall have the privileges and compensation

equivalent to that of an Associate Justice of the Court of Appeal:

Quorn

‘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,

jion em bane.

decision or other acts of the Commis

Principal office, branch and venue

The Commission shall hold its principal office in Metro Manila but it is allowed 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.

Stafy

‘The Commission shall appoint, fix the compensation in accordance with the Revised
Compensation and Position Classification Law, determine the status, qualifications, and duties of

an adequate staff, which shall include an Executive Director of the Commission.

‘The Executive Director shall be appointed by the President and shall have relevant
experience in any of the fields of law, economies, commerce, management or finance for at

least ten (10) years: Provided, That, he shall be a

vareer Executive Service Officer.

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‘The members of the technical staff, except those performing purely clerical functions shall
possess at least a Bachelor Degree in the following lines of specialization: economics

preferably in industrial organization, law, finance, commerc:

counting or management.

SECTION 14. Original and exclusive jurisdiction—The Commission shall have original and
exclusive jurisdiction to enforce and implement the administrative provisions of this Act and
other competition laws, It shall also have the power and duty to promulgate the necessary

s Act.

implementing ru

and regulations for the efficient implementation of this

In particular, the powers of the Commission include those powers upon prior notice and hearing

and those which can be exercised even without hearing,

(a) Powers of the Commission upon prior notice and hearing

(1) To issue binding rules and regulations and Commission rulings;

(2) To issue cease and desist orders, status quo ante orders, preliminary injunctions,
preliminary mandatory injunctions, and other interlocutory orders;

3) To approve or disapprove proposals for consent judgment;

(4) To conduct the required preliminary inquiry of cases

volving violations of this Act and
other competition laws;

(5) To sign and file a criminal complaint with the Department of Justice for prosecution, if
the Commission deems it appropriate and necessary after the conduct of a preliminary
inquiry; and

©) To impose the appropriate administrative fines or penalties.

(b) Powers of the Commission even without bearing

(1) To investigate, on its own initiative or upon the complaint of any person, any and all
violations of this Act and other competition laws prior to the commencement of a
preliminary investigation, or the issuance of a show cause order, or the institution of a
civil or administrative action;

(2) 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;


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To attest and file all complaints for appropriate administrative relief from, or against,
violations of this Act or other trade competition laws;

istance and information

To require and deputize any government agency to lend

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;

To gather and compile information and invest

igate, from time to time, the way a given
industry is structured ot organized whether as a monopoly, oligopoly, or competitive; the

s in such matters as

way the firms within that industry act, behave, or conduct themselv
setting prices, determining output, and the resulting performance of the industry as a
whole; the organization, business, conduct, practices and management of any person,

partnership, or corporation engaged in trade, commerce, or industry and its relation to

individuals, partnerships, associations, corporations, firms and other business enterprises;
To issue subpoena, subpoena duces tecum and subpoena ad testficandum in the exercise of its

functions, powers and duties under this Aet, subject to the following:

(@ No subpoena shall be issued to requite the production or disclosure of trade
secrets as defined in subparagraph (7) hereof;
(i) 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;

Gi) A person appearing before the Commission, or any of its Divisions, in obedience

to a sibpoena shall be advised, before he is required to testify or produce any

documentary or real evidence of his right to be assisted or represented by a

counsel of his choice, or if he has none, the Commission shall appoint a de officio.

counsel for him and of his rights to avail of the immunity from prosecution

privilege herein prescribed;

‘To require, by general or special orders, firms engaged in trade, commerce, or industry to

file with’ the Commission in such form as the Commission may prescribe, annual ot

special reports, o answers in writing to specific questions, furnishing the Commission
such information as it may require as to the organization, business, conduct, practices,
management and telation to other persons of the respective natural or juridical persons
ot entities filing such reports or answers in writing, The Commission shall not require,
either by a specific order or by a subpoena, the disclosure or production of trade secrets

such as a secr.t formula, pattern, device or compilation of information, including names

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of customets, which is used in one’s business and which gives one an opportunity to
obtain advantage over competitors who do not know or use it, Trade secrets. shall
include a plan or process, tool, mechanism, o compound known only to the owner and
his employees to whom it is necessary to confide it;

(8) To make public, from time to time, such postions of the information obtained by it
under this Act, except trade secrets and names of customers, as it shall deem expedient in
the public interest;

(9) To submit annual and special reports 10 Congress, including proposed legislation for the
regulation of trade, commerce, oF industry, and provide for the publication of its reports
and resolutions in such form and manner as may be best adopted for public information
and transparency; and

(10) To study, from time to time, trade conditions in and with foreign countries where
associations, combinations, or practices of manufacturers, merchants, or traders, ot other
conditions, may affect the foreign trade of the Philippines, and report to Congress its

findings and recommendations thereon as it may deem advisable,

SECTION 15. Jurisdiction of regional trial courts—Vhe regional tial courts shall have
original and exclusive jurisdiction, regardless of the penalties and fines herein imposed, of all
criminal and civil cases involving violations of this Act and other trade competition laws. The

venue shall be based on the provisions of the Rules of Court.

CHAPTER VII
FINES AND PENALTIES

SECTION 16. Administrative penalties —

(@) Without prejudice to the provisions of other laws, any person found to have violated
Sections 8, 9, 10 and 11 of this Act or any combination thereof, shall, for each and every
violation, be punished by:

(1) A fine of not less than ten million Philippine pesos (PhP10,000,000.00) but not more

fifty million Philippine pesos (PhP50,000,000.00) if the violator is a natural person, at the

discretion of the Commission.

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2) A fine of not less than two hundred fifty million Philippine pesos (PhP250,000,000.00)
but not mote than seven hundred fifty million Philippine pesos (PhP750,000,000.00) if
the violator is a juridical person or a firm as the latter is defined in this Act, at the
discretion of the Commission,

(3) In the alternative, a fine in an amount double the gross proceeds gained by the violator

ot double the gross loss suffered by the private complainants.

(b) Any person who fails or neglects to comply with any term or condition of a binding ruling,
any interlocutory order, including a cease and desist order or an order for readjustment, duly
issued by the Commission, shall pay a fine of not less than fifty thousand Philippine pesos
(PhP50,000.00) but not more than one million Philippine pesos (PhP1,000,000.00) for each

violation,

Each violation shall be deemed a separate offense: Pronided, That in the case of a violation
through a continuing failure or neglect to comply, each day of continuance of such failure ot

neglect shall be deemed a separate offense.

(6) The Commission may likewise impose upon persons or entities fines of not less than five
thousand Philippine pesos (PhP5,000.00) to not more than one hundred thousand Philippine
pesos (PhP100,000.00) where, intentionally or negligently, they supply incorrect or
misleading information in any document, application or other paper filed with or submitted
to the Commission or supply incorrect or misleading information in an application or other
paper filed with or submitted to the Commission or supply incorrect or misleading
information in an application for a binding ruling, a proposal for a consent judgment,
proceedings relating to a show cause order, or application for modification of the

Commission’s ruling, order or approval, as the case may be.

SECTION 17. Criminal penalties —Without prejudice to the provision of other laws, any
person that shall be found to have violated Sections 8, 9, 10 and 11 of this Act, or any
combination thereof, shall, for cach and every violation, be punished by life imprisonment ot a

fine, or both, at the discretion of the court.

‘The fine shall be:

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(a) Not less than ten million Philippine pesos (PhP10,000,000.00) but not exceeding fifty million
Philippine pesos (PhP50,000,000.00) if the violator is a natural person, at the discretion of

the court

(b) Not less than qwo hundred fifty million Philippine pesos (PhP250,000,000.00) but not
exceeding seven hundred fifty million Philippine pesos (PhP750,000,000.00) if the violator is
a juridical person or a firm as the latter is defined in this Act, at the discretion of the court.

proceeds gained by the violator or double

(©) In the alternative, in an amount double the gr

the gross loss suffered by the private complainants.

CHAPTER VII
ENFORCEMENT

SECTION 18. Preliminary Inquiry.—The Commission shall mot proprio, or upon the filing of

I by the concerned regulatory agency,

a verified complaint by an interested party or upon tefer

initiate a preliminary inquiry under this Act.

SECTION 19, Powers of other regulatory agencies—Notwithstanding the provisions of
Section 18 of this Act, the exercise of regulatory powers by different government agencies,
including local government units, over an industry or a subsector of an industry shall be
cumulative, The provisions of this Act shall not be interpreted as a hindrance of the exercise of

such power and authority of the concerned age

For this purpose, the government agencies shall cooperate and coordinate with one another in
the exercise of their powers in order to prevent overlap of efforts, to facilitate and share
confidential information, or for other effective measures. The Commission can seek technical

assistance from other regulators

‘The Commission shall have primary and sole jurisdiction over competition issues, while the
regulatory body shall continue to exercise jurisdiction over all matters with regard to the firms?
operation and existence: Provided, however, That before issuing any ruling, opinion, issuance,
regulation or decision, the Commission must first coordinate with the concerned regulatory

agency, if any, and shall request for a written opinion of the latter,

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SECTION 20. Power to investigate and to enforce orders and resolutions.—The

Commission shall conduct preliminary inquiries by administering oaths, issuing subpoena ducer

ecu and summoning witnesses, and commissioning consultants or experts. It shall determine if

any provision of this Act has been violated, enforce its orders and carry out its resolutions by

making use of any available means, provisional or otherwise, under existing laws and procedures

including the power to punish for contempt and to impose fines.

SECTION 21, Self-incrimination—Pursuant to the preceding Section, a person subject of

any preliminary inquiry or investigation by the Commission shall produce the specified

document or information when so required by written notice: Provided, That no person shall be

excused from producing any document of disclosing any information to the inquiring officer on
the ground that the disclosure of the information or document may be incriminating: Provided,
further, That such document o information produced by the person subject of investigation shall

dings: Provided, finaly, That such

not be admissible as evidence against him in criminal pro«
document or information shall be admissible in evidence in civil proceedings including those

arising from or in connection to the implementation of this Act.

Sections 20 and 21 shall

SECTION 22. Privileged communication, exclusion —Nothing in
compel the disclosure of privileged communication: Provided, ‘That the person who refuses to
disclose the information or produce the document or other material required by the inquiting
officer in relation to the preliminary inquiry being conducted shall nevertheless be obliged to
give the name and address of the firm to whom, or by whom, or on whose behalf, such

privileged communication was made.

SECTION 23. Confidentiality of information —Any document or information submitted by

firms, as determined and marked confidential by the Commission, relevant to any investigation
being conducted pursuant to this Act shall not, in any manner, be directly or indirectly disclosed,
published, transferred, copied, or disseminated. The identity of persons who provide
information to the Commission and who need confidentiality to protect themselves against
economic retaliation, and any Commission deliberations in regard to current or still uncompleted

matters, shall remain confidential

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Any violation of this provision shall be punished with a fine of not less than one hundred
thousand Philippine pesos (PhP 100,000.00) but not more than five hundred thousand Philippine
pesos (PhP500,000.00)

SECTION 24. Leniency.—Any person or firm which cooperates or furnishes any information,
document or data to the Commission before or during the conduct of the preliminary inquiry
that constitutes material evidence as determined by the under this Act shall be immune from any
suit or charge including from affected parties and third parties: Provided, That the person or firm
is not the most guilty. Provided, further, That any person or firm which cooperates or furnishes
information, document or data to the Commission in connection to an investigation being
conducted shall not be subjected to any form of reprisal or discrimination: Provided, finaly, That
such reprisal ot disctimination shall be considered a violation of this Act and subjected to the

penalties provided for under Section 16

Nothing in this Section shall preclude prosecution for persons and firms who reported to the
Commission with malicious information, data and falsified documents which is damaging to the
business and integrity of the persons and firms under inquiry, which shall likewise be considered

as an unfair rade practice punishable under this Act.

SECTION 25. Termination and action on preliminary inguity.—The Commission, after
considering the statements made, or documents or atticles produced, in the course of an inquiry

conducted by it shall terminate the preliminary inquiry by issuing a resolution:

(a) Ordering its closure if no violation or infringement of this Act is found; or

(b) Which has the effect of a nolo contendere resolution as provided in Section 26 of this Act;
or

(©) To, singly or cumulatively
(1) Impose penalties in the range provided under Section 16 hereof,
(2) Order the rectification of certain acts or omissions; or

(3) Order the restitution to the affected patties.

When determined by the facts and circumstances, the Commission shall institute a civil action by

class suit in the name of the Republic of the Philippines, as parens patriae, on behalf of persons

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residing in the Philippines, to secure treble damages for any injury sustained by such persons by

reason of any violation of this Act, plus the cost of suit and reasonable attorney's fee.

‘ion shall file criminal cases for violation of this Act or

If the evidence so warrants, the Commi

relevant laws before the Department of Justice pursuant to Section 17 of this Act.

SECTION 26. Nolo contendere resolution—Any firm under inquiry by reason of the
implementation and cnforcement of the provisions of this Act may submit to a solo contendere

resolution at any time before the termination of the preliminary inquiry by:

(a) Paying an amount within the range of penalties provided for under Section 16;
(b) Entering into an undertaking to effectively stop and rectify the acts complained of, make

restitution to the affected parties, who may be private complainants or witnesses; and

(©) Submitting regular compliance reports as may be directed.

Pronided, ‘Uhat, ten percent (10%) of the amounts paid under this Section shall equitably accrue to
the Commission: Provided, further, That « nolo contendere resolution shall not bar any inquiry for the

same or similar acts if continued or repeated

SECTION 27. Non-adversarial administrative remedies —As an implementing and

enforcement policy, te Commission shall, under such rules and regulations it may prescribe,

encourage voluntary compliance with this Act and other competition laws by making available to

the parties concered the following and other analogous non-adversarial and non-adjudicatory

administrative , before the institution of administrative, civil or criminal action:

(a) Request for binding ruling
Any person who is in doubt as to whether his contemplated or existing act, course of
conduct, agreement, decision or practice is in compliance with, is exempt from, or in
violation of any of the provisions of this Act, other trade competition laws, or implementing,
rules and regulations thereof, may request the Commission, in writing, to render a binding

ruling thereon.

(b) Show cause order

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Upon preliminary findings mot proprio or on written complaint under oath by an interested
party, that any person is conducting his business, in whole or in part, in a manner that may

not be in accord with the provisions of this Act or other wade competition laws, and it finds

that the issuance of a show cause order would be in the interest of the public, the
‘Commission shall issue and serve upon such person or persons a written description of its
business conduct complained of, a statement of the facts, data, and information together

with a summary of the evidence thereof, with an order requiting the said per

son or persons
to show cause, within the period therein fixed, why no order shall issue requiring such

jiness conduct,

from continuing with ties identified b

person or persons to cease and de

or pay the administrative fine therein specified, or readjust its business conduct or practices;

Proposal for consent judgment

At any time prior to the issuance of a binding ruling, the promulgation of a cease and desist
judgment under a show cause order or the promulgation of @ decision of judgment in any
administrative, civil, or criminal case, the person or persons, whose business conduct is

lation

under inquity in the particular proceedings may, without in any manner admitting a vi
of this Act or any other ade 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,

Consultations

Prior to the fitting of a request for a binding ruling or the submission of a proposal for
consent judgment, the person or persons concerned may communicate, in writing, with the
Commission on matters that should be included or excluded in such request or proposal,

which the Commission may consider necessary for the effective enforcement of this Act or

other trade competition laws.

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

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binding ruling, a cease and desist order or an approval of the proposal for a consent
judgment, as the case may be, with or without conditions, to the effect that the particular act,
course of conduct, agreement, decision or practice is in accord with this Act or other trade

competition laws, or is exempt therefrom, or is constitutive of a violation thereof. If the

Commission finds that there is s , course of

substantial evidenee tending to show that the a
conduct, agreement, decision or practice of the person or persons concerned is prohibited, it

concerned

shall include in its decision an order requiring the person or persons

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

(2) To pay the administrative penalty or fine therein fixed; and.

(3) To readjust, within a reasonable period therein fixed, its method of doing business,
including a corporate reorganization or divestment in the manner and under the terms

and conditions prescribed by the Commission, as it may deem proper for the protection

of the public interest.

Suspension of administrative, civil or oniminal proceedings

No pending administrative, civil or criminal proceedings or those filed thereafter, against any
petson, corporation or any other jutidical 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 of the filing of a
proposal for a consent judgment based, in whole ot in part, on the same set of facts and

issues as that of the proceedings sought to be suspended.

xe and desist order or other similar

No temporary injunction, restraining order, ce:

injunctions shall be issued by any court, except by the Supreme

lourt, to stop any

proceeding of the Commission,

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,

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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.

Inadmissibility in Fividence
‘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

of the consent judgment as

introduction of the binding ruling, the cease and desist ord

prima facie evidence against such persons in any such action of proc

eding,
‘Modification or reversal of ruling, order or approval

‘The Commission may mo/ proprio or upon petition of an interested party, after notice and
hearing, reopen and alter, modify, or set aside, in whole or in part, a binding ruling, a cease

and desist order, or an approved consent judgment:

(1) Whenever conditions of material fact or law have so changed as to require such actions

2) When the concerned person or persons fail or refuse, without justifiable cause therefo:

to comply with any condition attached to such ruling, order, or approval, including an

order to readjust their method of doing business; ot
3) When the ruling, order, or approval was based on deliberately falsified material fact, data,
or information supplied by an interested party benefited by such ruling, order, ot

approval

‘The modification or reversal of a binding ruling, a cease and desist order, or an approved
consent judgment shall have no retroactive effect and shall not affect or impair any right
legally acquired prior to the modification or reversal thereof, except, that the party who is

guilty of unjustified failure or refusal to comply as specified in paragraph (2) hereof, or have

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deliberately supplied such falsified material fact, data or information as specified in paragraph

(3) above, is barred from claiming any vested right therein.

SECTION 28. Standards—In the exercise of its powers or the discharge of its duties under

this Cet, the Commission shall consider the following:

(@) The way a given industry is structured or organized whether monopolistic, oligopolistic, or
competitive;
(b) The ways the persons engaged in business within a given industry act, behave or conduct

int factors

themselves in such matters as setting prices, determining output, and other relev:

a whole;

and the resulting performance of the industry

(©) The supply and demand situation for the relevant goods or servic
(@ Whether or not the particular market conduct has an appreciable impact on market

condition

(©) The need to bring together complimentary skills to avoid duplication and promote efficiency

in the industry;

() Whether or not the anticompetitive effect of a particular market conduct may be offset by

increased effici

‘acy and reduction of excessive or unnecessary expenses;
(@) ‘The cost and profit levels of the industry;

fh) The need to increase productivity in the particular industry involveds

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

states

@) The need of the industry to work more rationally and increase their productivity and
competitiveness on a larger market;

(I) The need to respond to international competition and other developments in the
international marker;

ed industries;

() ‘The need to encourage or develop small and medium:

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

(n) The need to pool capital resources;

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

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

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

() The extent to which less restrictive practices are available,

SECTION 29, Contempt—Lhe Commission or any of its Divisions may summarily. punish

for contempt by imprisonment not exceeding thirty (30) days or by fine, or both, any person

guilty of such misconduct in the presence of the Commission o any of its Divisions in its
vicinity as to seriously interrupt any hearing, session or any proceedings before it, including cases
in which a person willfully fails or refuses, without just cause, to comply with a summons,
subpoena ox subpoena duces feeum legally issued by the Commission or any of its Division, being
present at « hearing, proceeding, session or investigation, refused to be sworn as a witness or to
answer questions or to furnish information when lawfully required to do so.

SECTION 30. Decisions of the Commission —Decisions of the Commission en bane shall be

appealable to the Supreme Court. The appeal shall not stay the order, ruling or decision sought
to be reviewed, unless the Supreme Court shall direct otherwise and upon such terms and

conditions it may deem just.

SECTION 31. Appeal to the Supreme Court—Any party who has actively participated in the
proceedings before the Commission and is adversely affected by a binding ruling, order, or
resolution, decision, judgment, rule or regulation promulgation after notice and hearing by the
Commission sitting «dane, may appeal, by means of a notice of appeal and a verified petition
for review served upon the Commission and other parties who actively participated in the
proceedings, to the Supreme Court within thirty (30) days from receipt thereof, upon the

grounds that the appealed action of the Commission is:

(a) Arbitrary to constitutional rights, powers, privileges, or immunities;
(b) Contrary to constitutional rights, power, privilege, or immunity;

or is contrary to law;

(©) Made in excess of statutory jurisdiction, authority, or limitatio
(@) Without observance of the procedure required by law; and

(©) Not supported by substantial evidence.

‘The Commission shall be included as a party respondent to the case and shall be represented by

its own legal staff.

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SECTION 32, Reception of additional evidence-—Any party in the appellate proceedings
may apply for leave with the Supreme Court to adduce additional evidence before the
Commission, The Court may, under such terms and conditions as it may prescribe, order the
Commission to receive such additional evidence upon showing that it is material and there are

reasonable grounds for the failure to present said evidence in the proceedings before the

Commission, ‘The Commission, sitting e” banc, may modify its findings as to the facts, or make
new findings, by reason of the additional evidence taken, and it shall file with the appellate court

such modified or new findings and its recommendations for the affirmance, modification, ot

setting aside of the appealed binding ruling, order, resolution, decision, judgment, rule or

regulation

SECTION 33. Writ of execution—Upon the finality of its binding ruling, order, resolution,
decision, judgment, or rule or regulation, the Commission may issue a writ of execution to
enforce its decision and the payment of the administrative fines provided in the preceding

Sections.

SECTION 34. Violation by cosporation, partnership, association, and other entity—
Whenever a corporation, partnership, association, fitm or other entity, whether domestic or

foreign, shall commit any of the acts declared to be unlawful under this Act, the chairperson of

the board of directo's, the president, the general manager of the corporation, the general
partners of a partnership, and the officers and employees ditectly responsible, shall be jointly and

severally liable with the fitm for the fine imposed therein.

Should a foreign corporation licensed to do business in the Philippines commit the offense, the
person ot persons directly responsible in the Philippines for the management and operation
shall be

thereof, shall be liable. In addition, its license to do business in the Philippine:

cancelled.

It shall not be a defense for the chairperson of the board of directors, the president or the
general manager of the corporation or the general partners of a partnership, ot the persons
responsible for the management and operation of a foreign corporation licensed to do business

, he shall have established to the

in the Philippines, that he was unaware of the violation, unles

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satisfaction of the court that even with the exereise of due diligence and proper supervision, he

could not have avoided or prevented the violation,

Any agreement between an officer, partner or any other officer and a corporation or partnership
whereby the latter directly or indirectly agrees to assume, satisfy or indemnify, in whole ot in
part, the fine of civil obligation imposed under this Act of such corporate officer, partner,

manager or other officer found guilty of violating this Act, shall be void.

SECTION 35. Alien violators —If the person violating any provision of this Act is a foreigner,
he shall, in addition to the other penalties imposed herein, be deported after service of sentence

without need of any further proceedings.

SECTION 36. Essential commodities —If the violation involves the trade or movement of
prime commodities such as rice, cor, sugat, chicken, pork, beef, fish, vegetables, and other

articles or commodities of prime or basic necessity as declared by the appropriate government

agency, through publication, the fine imposed by the Commission or the courts, as the case may

be, shall automatically be tripled and the offender shall pay such threefold fine.

SECTION 37. Private action Regardless of the status or pendency of any proceedings, any
firm that suffers injury by reason of any violation of this Act may institute a separate and
independent civil action, irrespective of the amount involved in the controversy against the
defendant or defendants and shall recover treble damages sustained, the costs of suit and
reasonable attorney's fees: Provided, however, That no filing fees shall be collected: Provided, further,

‘That filing fees shall constitute a first lien in the award of damages.

SECTION 38. Effect of final judgment.

brought by the Commission on behalf of the People of the Philippines under this Act to the

Any final judgmene in a civil or criminal action

effect that a defendant has violated any of all of the provisions of this Act shall be res jdivata as
to any claim by any person on whose behalf such action was brought: Pronided, That such petson

notifies the court having jurisdiction of the case within the period given by the court: Provided,

further, That such period shall not be less than ninety (90) days.

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Tt shall be prima facie evidence against such defendant in any civil action brought by any other
party against such defendant under this Act as to all matters respecting which said judgment

would be an estoppel as between the parties concerned.

SECTION 39. Distribution of damages recovered —The damages recovered in a civil action

under Section 24 of this Act shall be distributed in the following manner

(1) As determined and to be authorized by the Court having jurisdiction of the case;

(2) Ten percent (10%) of the total amount of damages shall accrue to the Commission and/or

regulatory agency to be used exclusively in the enforcement of this Act; and,
3) The remainder of which total amoune of damages shall be deemed a civil penalty by the
court and shall be deposited to the National ‘Treasury as part of the general fund of the

government:

Provided, ‘That any distribution procedure adopted by the court shall. give preference to individual
consumers and afford each person having an interest a reasonable opportunity to secure his

appropriate portion 0: the net damages obtained.

SECTION 40. Measurement of damages—Damages may be proved and assessed in the
aggregate by statistical or sampling methods, by the computation of illegal overcharges, or by
such other reasonable system of estimating aggregate damages as the court in its discretion may

permit without the ity of separately proving the individual claim, of, or amount of damage

ect

to, persons on whose behalf the suit was brought.

SECTION 41. Imanity from suit—The Commissioners and staff of the Commission shall not
be subject to any action, claim or demand in connection with any act done or omitted by them in
the performance of their duties and exercise of theit powers, except for those acts and omissions

done in evident bad faith or gross negligence.

The Commission sha’? indemnify each Commissioner and staff of the Commission for all costs

and expenses reasonably incurred by such persons in connection with any civil or criminal

actions, suits or proceedings to which they may be or made a party by reason of the performance
of their duties or exercise of their powers, unless they are finally adjudged in such actions or

proceedings to be liable for evident bad faith or gross negligence.

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CHAPTER IX
OTHER PROVISIONS

SECTION 42. Statute of limitations—Any civil or criminal action to enforce any cause of
action arising from a violation of any provision of this Act shall be forever barred unless
commenced within twenty (20) years after the cause of action accrues. The running of the statute

of limitation shall be suspended during the pendeney of any proceeding,

For this purpose, the cause of action begins to run when the plaintiff suffers injury to its
business or property: Provided, ‘That when the damage suffered by the plaintiff is too speculative
to prove, the cause of action does not accrue until the damage becomes probable: Provided,
however, That if the plaintifs injury is the result of the continuing violations of this Act, each
independent anti-competitive act may restart the limitation petiod or when a plaintiff reasonably

fails to uncover a cause or action that was fraudulently concealed by a defendant.

SECTION 43. Prohibition on the issuance of temporary restraining orders, preliminary

injunctions and preliminary mandatory injunctions.—l'xcept for the Supteme Coust, no
other court shall issue any temporary restraining order, preliminary injunction ot preliminary
mandatory injunction against the regulatory agency in the exercise of its duties or functions
Provided, ‘That, this prohibition shall apply in all cases, disputes or controversies instituted by a

private party, including, but not limited to, cases filed by regulated firms or those claiming to

have rights through such firms: Provided, however, ‘hat, this prohibition shall not apply when the
matter is of extreme urgency involving a constitutional issue, such that the non-issuance of a
temporary restraining order will result in grave injustice and irreparable injury to the public:
Provided, further, ‘That, the applicant shall file a bond, in an amount to be fixed by the Supreme
Court, but in no case shall it be less than half of the imposable fines provided for under Section
16 of this Act: Prowided, finally, ‘That in the event that the Supreme Court finally decides that the
applicant was not entitled to the selief applied for, the bond shall accrue in favor of the

regulatory agency

Any temporary restraining order, preliminary injunction or preliminary mandatory injunction

issued in violation of this Section is void and of no force and effect. Any judge or justice who

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violates this Section shall be penalized by suspension of at least one (1) year without pay in

addition to other criminal, civil or administrative penalties.

‘The Supreme Court may designate regional trial courts to act as commissioners with the sole
function of receiving facts of the case involving the acts of the regulatory agency. The designated
regional trial court shall, within thisty (30) days from the date of receipt of the referral, forward

its findings of facts to the Supreme Court for appropriate action,

SECTION 44, Intellectual property rights—Vhe implementation of the provisions of this
Act shall be without prejudice to the tights, liabilities and remedies under Republic Act No.
8293, otherwise known as the Intellectual Property Code of the Philippines: Provided, ‘That, the exercise

of intellectual property rights shall not in any way be used to justify violations of this Act.

SECTION 45. Trade associations.—Nothing contained in this Act shall be construed to

prohibit the existence and operation of trade associations organi

d to promote quality standards

and safety issues: Provided, That, these associations shall not in any way be used to justify any

violation of this Act.

SECTION 46. Implementing rules and regulations —Uhe Commission shall prepare the

necessary rules and regulations within one hundred twenty (120) days from the effectivity of this

Act: Provided, ‘That, whete the same would apply to an industry or a sub-sector of industry that is
subject to the jurisdiction of a regulatory agency, the Commission shall, in preparing the

guidelines, consult with the concerned regulatory agency and stakeholders: Provided, further, ‘That

the Commission may revise such guidelines as it deems necessary: Provided, however, That such
revised guidelines shall only take effect following its publication in two newspapers of general

circulation,

SECTION 47. Congressional oversight committee—To oversce the implementation of this

Act, there shall be cteated a Congressional Oversight Committee on Fair Competition to be

composed of the Chairpersons of the Senate Committees on ‘Trade and Commerce, Economic
Affairs, and Finance; the Chairpersons of the House of Representatives Committees on Trade
and Industry, Economic Affairs and Appropriations; and two members each from the Senate
and the House of Representatives who shall be designated by the Senate President and the

Speaker of the House of Representatives: Provided, That one of the two Senators and one of the

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two House Members shall be nominated by the respective Minority Leaders of the Senate and

the House of Representatives. The Congressional Oversight Committee shall be jointly chaired

by the Chairpersons of the Senate Committee on Trade and Commerce and the House of
Representatives Committee on Trade and Industry. ‘The Vice-Chairperson of the Congressional
Oversight Committee shall be jointly held by the Chaigpersons of the Senate Committee on

Economic Affairs and the House of Representatives Committee on Economic Affairs.

‘The Secretariat of the Congressional Oversight Committee on Fair Competition shall be drawn
from the existing personnel of the Senate and House of Representatives committees comptising

the Congressional Oversight Committee

SECTION 48, Appropriations he amount necessary to implement the provisions of this
Act shall be included in the annual General Appropriations Act. However, for the initial
budgetary requirements of the Commission, the amount of one hundred million Philippine pesos
(P100,000,000) is hereby appropriated: Provided, ‘That all moneys recovered or charges ot
composition sums collected under this Act, other than financial penalties, shall be paid into and

form part of the moneys of the Commission.

CHAPTER X
FINAL PROVISIONS,

SECTION 49. Transitory provision—For the purpose of ensuring that the Commission is
organized within the mandated period of one hundted eighty (180) days after the approval of

this Act, an Inter-Agency ‘Task Force shall be created and composed of the following agencies:
(a) For administrative support to the Commission:

(1) Office of the President to be represented by the Executive Secretary with the Deputy
Executive Secretary for Legal Affairs as alternate;

2) Department cf Budget and Management to be represented by the Secretary with the
Undersecretary in chatge of organization of new offices and position classifications as

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

Commission:

(1) Tariff Commission to be represented by the Chaisperson and with an Associate
Commissioner permanently designated as alternate;

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

(3) Department of Justice to be represented by the Secretary with an officer holding at least

an As

sant Secretary rank as alternate.

‘The Inter-Agency Task Force shall ensure that the organizational structure of the Commission
will be completed within one hundred eighty (180) days from the effectivity of this Act, The
‘Task Force shall also meet in Executive Session all the agency heads to deliberate on possible
appointees for the position of Chairman and Associate Commissioners of the Commission for

submission to and consideration of the President of the Philippines,

The ‘Task Force shall also commence the coordinated advocacy for this Act within ninety (90)
days from the effectivity thereof. It shall also implement a broad-based consultation on inputs
for the implementing rules and regulations of this Act which must be completed within one

hundred fifty (150) days from the effectivity of this Act.. The report on the consultations shall be

submitted to the Commission within fifteen (15) days from its establishment a copy of which

will be furnished to the Congressional Oversight Committee on Fait Competition,

SECTION 50. Separability clause-Lf any clause, sentence, section ot part of this Act shall be
adjudged by a court of competent jurisdiction to be invalid, such judgment shall not affect,
impair or invalidate the remainder of this Act, but shall be confined in its operation to the clause,

sentence, paragraph, section, or part thereof directly involved in the controversy.

SECTION 51. Suppletory application—t'or purposes of this Act, Act No. 3815 (Revised Penal

Cade), as amended, and other applicable laws shall be applied in a suppletory character.
SECTION 52. Repealing clause—The following laws, insofar as they are inconsistent with

any of the provisions of this Act are hereby repealed, amended or otherwise modified

accordingly:

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(a) Section 5(3) of Republic Act No. 7381 (The Prive Act);

(b) Section 5(f) of Republic Act No, 7925 (The Public Telecommunications Policy Acts

(©) Section 11(a) and (b) of Republic Act No. 8479 (The Downstream Oil Industry Deregulation Act)
(@) Section 45 of Republic Act No. 9136 (The Electric Power Industry Reform Act),

(©) Section 13 of Republic Act No. 9295 (The Domestic Shipping Development Add),

(f) Sections 24 and 25 of Republic Act No. 9502 (The Unirersally: Accessible Cheaper and Quality

Medicines Act)

Pronided, ‘hat in case of conflict between this .Act and such provisions of existing competition

laws and regulations, the provisions of this Act shall prevail.

SECTION 53. Effectivity clause~This Act shall take effect fifteen (15) days following its
publication in the Official agent or in at least two (2) national newspapers of general circulation
Provided, homever, That in order to allow affected parties time to renegotiate agreements or
restructure their business to comply with the new competition law, the penal provisions of this

Act shall be imposed one (1) year after its effectivity.

In order to allow affected parties time to renegotiate agreements or restructure their business to

comply with the provisions of this Act, Sections 15 and 16 of this Act shall be imposed one (1)

year after the effectivity of the implementing rules and regulations of this Act. During the said
one (1) year period, the Philippine Fair Competition Commission shall undertake an advocacy

program in order to discuss the provisions of this Act to the stakeholders and the general public.

Approved,

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