SIXTEENTH CONGRESS OF THE )
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF Fa ne

Introduced by Representative Teodorico T. Haresco Jr.

EXPLANATORY NOTE

There is a need to promote and enhance economic efficiency as well as fair competition
in trade and all commercial economic activities. The Article 17, Section 19 of the Constitution
teads:

“Sec. 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.”

Except perhaps for the Energy Regulatory Commission in the case of the electric power
industry, the prosecution of persons engaged in anti-trust or unfair competition behavior as well
‘as recovery of civil damages arising therefrom jis the primary responsibility of the private
offended party. While the Department of Justice supervises the prosecutorial service for all
criminal complaints in the country, it does not function like a trade board or commission
dedicated to the enforcement of anti-competition legal provisions. Apart from this lack of
specialized implementation and the absence of a comprehensive law against monopoly, there
is also a dearth of jurisprudence on the matter. All laws relating to anti-trust are scattered in
different codes. The existing anti-trust laws do not provide for clear-cut guidelines,
elements/requisites or evidence to determine whether an act constitutes unfair competition,
monopolistic behavior or restraint of trade. We need a proper body to determine whether there
is any violation of anti-trust laws.

This bill seeks to prevent the concentration of economic power in a few by penalizing
combinations or conspiracies in restraint of trade or those that will prevent free market
competition. It prohibits anti-competitive agreements and mergers and abuse of dominant
position.

With the foregoing premises, approval of this bill is earnestly sought.

alee
REP. TED RICO\HARESCO, JR.



SIXTEENTH CONGRESS OF THE }
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRI NTATIVES
ine oes

Introduced by Representative Teodorico T. Haresco Jr.

AN ACT
PENALIZING ANTI-COMPETITIVE AGREEMENTS, ABUSE OF DOMINANT POSITION, AND
ANTI-COMPETITIVE MERGERS, ESTABLISHING
THE PHILIPPINE FAIR COMPETITION COMMISSION

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

SECTION 4. Title. - This Act shall be known and cited as the “Philippine Competition
Law of 2013."

SEC. 2. Declaration of Policy. - Pursuant to the constitutional mandate that the State
Shall regulate or prohibit monopolies when the public interest so requires and that no
combinations in restraint of trade or unfair competition shall be allowed, the State shall:

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

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

(c) penalize all forms of anti-competitive agreements, abuse of dominant position, and
anti-competitive mergers, with the objective of protecting consumer welfare and
advancing domestic and international trade and economic development.

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

The Act shall apply to: (a) all firms as defined hereunder and all their commercial
agreements, actions or transactions involving goods, services or intellectual property; and, (b)

1



1 all agents, officers, employees, partners, owners, directors, consultants, stockholders,
2 representatives, managers, supervisors, and all other natural persons who acting on behalf of
3 juridical persons shall authorize, engage or aid in the commission of restrictive practices
4 prohibited under this Act.

5 This Act shall apply neither to the combinations or activities of workers or employees nor
6 to agreements or arrangements with their employers when such combinations, activities,
7 agreements, or arrangements are designed solely to facilitate collective bargaining in respect of
8 conditions of employment.

9 SEC. 4. Definition of Terms. - As used in this Act, the following terms shall be defined
10 as

om (a) ‘Agreement’ shall refer to any type or form of arrangement, understanding,
12 undertaking or concerted action, whether formal or informal or tacit, written or oral;

13 (b) “Cartel” shall refer to a combination of firms, providing goods in relevant markets,
14 acting or joined together to obtain a shared monopoly to control production, sale and
15 price, or to obtain a obtain control in any particular industry or commodity, or a group
16 Of firms that agree to restrict trade. It shall also refer to firms or section of firms having
17 common interests designed to promote the exchange of knowledge resulting from
18 scientific and technical research, exchange of patent rights and standardization of
19 products among themselves with the intent of preventing, restricting or distorting
20 competition;

21 (c) “Commission” shall refer to the Philippine Fair Competition Commission created
22 under this Act;

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

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

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

32 (g) “Firm” shall refer to any person, natural or juridical, partnership, combination or

33 association in any form, whether incorporated or not, domestic or foreign, including

2



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;

(i) “Market” and “Relevant Market’: “Market” shall refer to a place or venue of

commercial activity, which may be a city, province, region, the whole area of the
Philippines, or which may extend beyond the borders of the Republic of the
Philippines, where articles are bought or sold, it shall also refer to the geographical or
economic extent of commercial demand;
“Relevant Market’ shall refer to the line of commerce in which competition has been
restrained. It shall also refer to the geographic area involved, including all reasonably
substitutable goods, and all competitors, to which consumers could turn if the restraint
or abuse results in the significant increase in prices;

(j) “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 of only a few firms dominate the total sales of

a product or service.


1 (|) “Subsidiary” shall refer to a corporation more than fifty percent (50%) of the voting

2 stock of which is owned or controlled, directly or indirectly, through one or more
3 intermediaries, by another corporation, which thereby becomes its parent corporation.
4 Chapter Il

5 PHILIPPINE FAIR COMPETITION COMMISSION

6 SEC. 5. Philippine Fair Competition Commission. - To implement the national policy

7 and attain the objectives and purposes of this Act, an independent Commission is hereby
8 created, to be known as the Philippine Fair Competition Commission (PFCC), which shall
9 hereinafter be referred to as the Commission, and shall be organized within one hundred eighty
10 (180) days after the approval of this Act.

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

12 (a) Composition. - The Commission shall be composed of a Chairperson and four (4)
13 Associate Commissioners. The Chairperson and Commissioners shall be citizens
14 and residents of the Philippines, at least forty (40) but not more than sixty-five (65)
15 years of age, of good moral character and of recognized probity and independence.
16 The Chairperson and two (2) of the Associate Commissioners shall be members of
17 the Philippine Bar and the remaining two (2) shall be of recognized competence in
18 the field of economics preferably in industrial organization economics, or finance,
19 commerce, accounting, or management. They must have actively practiced their
20 professions for at least ten (10) years, but must not have been candidates for any
21 elective national or local office in the immediately preceding elections, whether
22 regular or special,

23 (b) Term of Office. - The Chairperson and the Associate Commissioners shall be
24 appointed by the President of the Philippines. The term of office of the Chairperson
25 and the Associate Commissioners shall be six (6) years without reappointment. The
26 Chairperson shall hold office for six years and of the first four (4) Associate
27 Commissioners, two (2) shall hold office for a term of four (4) years and two (2) for a
28 term of two (2) years. In case a vacancy occurs before the expiration of the term of
29 office, the appointment to such vacancy shall be only for the unexpired term of the

30 predecessor,



(c) Prohibition and Disqualifications. - The Commissioners shall Not, during their tenure,

hold any other office of employment. They shall not, during their tenure, directly or
indirectly practice any profession, participate in any business, or be financially
interested in any contract with, or any franchise, or special privileges granted by the
government or any subdivision, agency, or instrumentality thereof, including
government-owned and controlled corporations of their subsidiaries. They shall strictly
avoid conflict of interest in the conduct of their office. They shall not be qualified to run
for any office in the election immediately succeeding their cessation from office. They
shall not be allowed to appear or practice before the Commission for two (2) years
following their cessation from office.
No spouse or relative by consanguinity or affinity within the fourth civil degree and no
former law, business, or professional partner or associate of any of the
Commissioners, the Chairperson and the Secretary of the Commission may appear
as Counsel or agent on any matter pending before the Commission or transact
business directly or indirectly therein during his/her incumbency and within one (1)
year from his/her cessation of office.

(4) 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,
tuling, order, resolution, decision or other acts of the Commission en banc.

(f) Principal Office, Branch and Venue. - The Commission shall hold its principal office
in Metro Manila but it may conduct hearings outside of Metro Manila upon prior
Notice for inquiries, studies or any other proceedings required for the proper and
efficient exercise of its power and the discharge of its duties. It may establish branch
office 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

§


1 Compensation and Position Classification Law and determine their status,

2 qualifications and duties. The Executive Director shall be appointed by the President
3 and shall have relevant experience in any of the fields of law, economics, commerce,
4 management or finance for at least ten (10) years. Provided, That the Executive
5 Director shall be a Career Executive Service Officer (CESO). The members of the
6 technical staff, except those performing purely clerical functions, shall possess at
a least a Bachelor's Degree in the following lines of specialization: economics,
8 preferably in industrial organization; law; finance; commerce; accounting; or
9 management.

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

11 Commission shall have the original and exclusive Jurisdiction to enforce and implement the
12 administrative provisions of this Act, its implementing rules and regulations, and all other
13 competition laws, and in particular:

14 (a) Powers of the Commission Without Hearing. — The Commission shall have the
15 power to do the following acts, without hearing:

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

oa (2) Administrative Action. — To attest and file all complaints for appropriate administrative
22 felief from or against violations of this Act or other competition laws:

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

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

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



1 i, No subpoena shall be issued to require the production or disclosure of trade

2 secrets as defined in paragraph (c)(2) hereof;

3 ii. A subpoena may be quashed only by means of a motion duly set for hearing and
4 on the grounds prescribed by the Rules of Court;

5 ili, A person appearing before the Commission in obedience to a subpoena shall be
6 advised, before he is required to testify or produce any documentary or real
7 evidence, of his right to be assisted or represented by a counsel of his choice,
8 and if he has none, the Commission shall appoint a de officio counsel for him;
9 and of his right to avail of the privilege of immunity from prosecution herein
10 prescribed;

i (b) Powers of the Commission Upon Prior Notice and Hearing. — The Commission may
12 _ exercise the following powers, only upon prior notice and hearing:

13 (1) Binding Rules — To issue binding rulings;

14 (2) Show Cause Order and Decision — To issue show cause orders, and thereafter,
15 render decision thereon;

16 (3) Consent Judgment — To approve, or disapprove, proposals for consent judgment;

7 (4) Preliminary Inquiry — To conduct the required preliminary inquiry of cases involving
18 violations of this Act and other competition laws; and thereafter, if appropriate, to
19 sign and file the proper criminal complaint before the Department of Justice; and

20 (5) Administrative Fines, Penalties and Sanctions — To impose the appropriate
21 administrative fines or penalties herein authorized to be imposed.

22 (c) Other Powers and Functions of the Commission:

23 (1) Industry Studies and Company Profile, — To gather and compile information and
24 investigate from time to time, the way a given industry is structured or organized
25 whether as a monopoly, oligopoly, or competitive; the way the firms within that
26 industry act, behave, or conduct themselves in such matters as setting prices,
27 determining output, and the resulting performances of the industry as a whole; the
28 organization, business, conduct, practices and management of any person,
29 partnership, or corporation engaged in trade, commerce, or industry and its
30 relation to individuals, partnerships, associations, corporations, firms and other
31 business enterprises;



1 (2) Public Disclosure of Information. — To make public, from time to time, such

2 Portions of the information obtained by it under this Act, except trade secrets and
3 names of customers, as it shall deem expedient in the public interest;

4 (3) Reports and Recommendations to Congress. — To submit annual and special
Ss reports to Congress, through the Congressional Oversight Committee on Fair
6 Competition created under this Act, including proposed legislation for the
7 regulation of trade, commerce, or industry, and provide for the publication of its
8 reports and resolutions in such form and manner as may be best adopted for
9 public information and transparency; and

10 (4) Trade Conditions, Domestic and Foreign. — To study from time to time, trade
nu conditions in and with foreign countries where associations, combinations, or
12 practices of manufacturers, merchants, or traders, or other conditions, may
13 affect the foreign trade of the Philippines, and report to Congress its findings
14 and recommendations thereon as it may seem advisable.

15 Sec. 7. Jurisdiction of Regional Trial Courts. — The Regional Trial Court shall

16 have jurisdiction over cases arising from violations of the provisions of this Act.
17 With respect to personal actions arising from the violations of the provisions of this Act,
18 actions may be commenced and tried where the plaintiff or any of the principal plaintiff
19 resides, or where the defendant or any of the principal defendants reside, or in the case of a
20 non-resident defendant, where he may be found, at the election of the plaintiff.

21 CHAPTER III
22 PROHIBITED ACTS
23 SEC. 8. Anti-competitive Agreements. — \t shall be unlawful for firms to engage in

24 horizontal and vertical agreements that prevent, distort or restrict competition, unless
25 otherwise exempted.

26 i. “Horizontal agreement” means an agreement entered into between two or more
27 enterprises operating at the same level in the market;
28 ii. “Vertical Agreement” means an agreement entered into between two or more
29 enterprises, each of which operates, for the purposes of the agreement, at different
30 levels of the production or distribution chain, and relating to the conditions under
31 which the parties may purchase, sell or resell certain goods or services;

8



1 There shall be a prima facie case for the existence of an anti-competitive agreement if
2 and when the Commission finds that two or more firms that are ostensibly competing for the
3 same relevant market and actually perform uniform or complimentary acts among themselves
4 which tend to bring about artificial and unreasonable increase, decrease or fixing in the price of
5 any goods or when they simultaneously and unreasonably increase, decrease or fix the prices of
6 their seemingly competing goods thereby lessening competition in the relevant market among
7 themselves.

8 (a) Price Fixing — Any agreement among competitors to raise, suppress, fix or
9 otherwise maintain the price at which their goods and services are sold such as, but
10 not limited to, establishing or adhering to price discounts, holding prices firmly,
my eliminating or reducing discounts, adopting a standard or formula for computing
12 prices, maintaining certain price differentials between different types, sizes or
13 quantities of products, adhering to a minimum fee or schedule and other analogous
14 schemes with the purpose and effect of creating a monopoly of cartel or lessening
15 competition.
16 (b) Bid Rigging - Any agreement to fix prices at auctions or in any other form of
i bidding, with the purpose and effect of creating a monopoly or cartel, or lessening
18 competition such as, but not limited to, cover bidding, bid suppression, bid rotation
19 and market allocation and other analogous practices of bid manipulation.
20 In determining whether there is price fixing or bid rigging, the following circumstances
21 may be considered:
22 (1) generally, any considered evidence that two sellers of similar goods have agreed
23 to set the price of their goods, to sell only a certain amount of their goods, or to
24 sell only to a limited number of buyers or consumers;
25 (2) a drastic change in prices of goods and services involving more than one seller
26 of similar goods of different brands, particularly if the changes in prices take
27 place in equal amount and about the same time;
28 (3) a seller refusing to sell based on an agreement with a competitor,
29 (4) the same firm has repeatedly been the low bidder who has been awarded
30 contracts for a certain service or a patticular bidder seems to win bids on a fixed-
31 rotation;
32 (5) there is an unusual and unexplainable difference between the winning bid and all
33 other bids; and



(6) 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 more firms to
abuse their dominant position, by engaging in unfair methods of competition, or in unfair or
deceptive trade practices, or entering into combinations in the form of trust or otherwise, or
Conspiracy, with the purpose and effect to prevent, restrict, or distort competition. Abusive
agreements such as, but not limited to, any of the following, shall be deemed to fall under the
crime of abuse of dominant position;

(a) Predatory Behavior Towards Competitors — Any 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 purpose and effect of creating a
monopoly or cartel, or lessening competition;

(c) 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;

(d) 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;

(e) 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;


1 (2) Volume Discounts — Price differentials which reflect an allowance for differences

B in the cost of manufacture, sale, or delivery resulting from differing methods or
3 quantities in which the goods are sold or delivered to the purchasers;
4 (3) Competitive Pricing — A price differential or other terms of sale in response to the
5 competitive price of payments, services or facilities furnished by a competitor;
6 (4) Bonafide Selection of Customers — the selection of customers on bona fide
7 transaction; and
8 (5) Price Differentials Due to Changing Market Conditions or Marketability of Goods —
9 Price changes from time to time in response to changing conditions affecting the
10 market or the marketability of the goods concerned such as, but not limited to,
i actual or imminent deterioration of perishable goods, obsolescence of seasonal
12 goods, distress sales under court process, or sale on good faith when a business
13 is going to be discontinued.
14 (f) Exclusivity Arrangement — Any arrangement imposing restrictions on the lease or contract
18 for sale or trade of goods concerning where, to whom, or in what forms goods may be sold
16 or traded, such as, but not limited to, fixing prices, or giving preferential discounts, or
17 rebate upon such price, or imposing conditions not to deal with competing firms, where the
18 purpose of such agreement is to lessen competition; Provided, That nothing contained
19 herein shall prohibit or render unlawful permissible franchising, licensing or exclusive
20 distributorship or merchandising agreements;
21 (g) Tie-In Arrangements — Any agreement making the supply of particular goods dependent
22 upon the purchase or lease of other goods from the supplier or his consignee, where the
23 purpose and effect of such sale or lease or such condition is to substantially lessen
24 competition or to create a monopoly or cartel;
25 (h) Boycott — Any concerted refusal to sell or conspiracy not to sell or to stop doing business
26 on the part of the suppliers of any goods, unless for a legitimate purpose.
27 (i) Applicability of the Prohibited Acts to Non-dominant Persons or Firms - \t shall be unlawful
28 for persons or firms who may not be holding a dominant position to commit the same acts
29 specified in this section.
30 SEC. 10. Anti-competitive Mergers — No firm engaged in commerce or trade shall

31 acquire, directly or indirectly, the whole or any part of the stock or other share capital, or the
32 whole or any part of the assets, of one or more firms engaged in any line of commerce or trade
33 where the effect of such acquisition of such stocks, share capital, or assets, or of the use of such

i



1 stock by voting or granting of proxies or otherwise maybe to substantially lessen competition, or
2 _ tend to create a monopoly.

3 (a) Permissible Stock or Asset Acquisition or Ownership. — Nothing contained herein,
4 however, shall be construed to prohibit:

5 (1) A firm from purchasing the stock or other share capital of one or more corporations
6 solely for investment and not using the same by voting or otherwise to bring about,
a or in attempting to bring about, the substantial lessening of competition;

8 (2) A corporation from causing the formation of subsidiary corporations, or from
9 owning and holding all or part of the stock of such subsidiary corporations, for
10 the actual carrying on of their immediate lawful business, or the natural and
ll legitimate branches or extensions thereof; and

12 (3) A firm from continuing to own and hold the stock or other share capital or assets
13 of another corporation which it acquired prior to the approval of this Act.

14 (b) Notification Prior to Stock or Asset Acquisition. — No firm shall acquire, directly or
15 indirectly, the shares of stocks or assets of any other firm, if as a result of the
16 acquisition, the acquiring firm would have the power to direct or cause the direction of
7 management policies of the acquired firm, unless, the acquiring and selling firm notify,
18 prior to the conclusion of the agreement for such acquisition and in the prescribed
19 form, the Commission of such proposed acquisition. Only the acquiring firm is
20 required to make the notification in a tender offer. The contemplated acquisition shall
21 be deemed approved, unless the Commission, within thirty (30) calendar days from
22 receipt of the notification, orders the acquiring firm to show cause why the proposed
23 acquisition shall not be declared as prohibited under this Act. The show cause order
24 shall set forth the facts upon which it is based. The acquiring or selling firm may.
25 contest the show cause order, in which case, the proposed acquisition shall be
26 considered enjoined until the Commission shall have rendered a decision on the
27 proposed acquisition after due notice and hearing, within further sixty (60) calendar
28 days in accordance with the procedure prescribed herein for the disposition of a
20 show cause order. If the Commission fails to make a decision within the prescribed 60.
30 calendar day limit, the acquisition shall be deemed approved and the parties may
31 proceed to implement it.

32 (c) Transactions Exempt from Prior Notice| Requirement. — The following classes of
33 transactions are exempt from the prior notice requirement under this Section:



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

a (2) Acquisitions of bonds, mortgages, deeds of trust, or other obligations which are
3 not voting securities;
4 (3) Acquisition of voting securities of an issuer at least fifty percent (50%) of the
5 voting securities of which are owned by the acquiring firm prior to such
6 acquisition:
i) (4) Transfers to, or from, government agencies or instrumentalities, including
8 government-owned or controlled corporations;
9 (5) Transactions exempted from the provision of this Act and other proper and
10 applicable laws;
ral (6) Transactions which require the approval of a specialized agency which
12 regulates the particular industry;
13 (7) Acquisitions, solely for the purpose of investment, of voting securities, if as
14 a result of such acquisition the securities acquired or held do not exceed ten
15 percent (10%) of the outstanding voting securities of the issuer;
16 (8) Acquisitions of voting securities pursuant to the preemptive rights of the
17 acquiring firm or, if, as a result of such acquisition, the voting securities
18 acquired do not increase, directly or indirectly, the acquiring firm's per
19 centum share of outstanding voting securities of the issuers; or
20 (9) Such other acquisitions, transfers, or transactions which the Commission
21 may declare as not likely to violate the provisions of this Act or any other
22 proper and applicable law.
23 CHAPTER IV
24 FINES AND PENALTIES
25 SEC. 11. Administrative Penalties. -
26 (a) Without prejudice to the violation of other laws, any firm that shall be found to have

27 — violated Sections 8, 9 and 10 of this Act, or any combination thereof, shall, for each and every
28 violation, be punished by a fine of not less than one hundred thousand pesos (Php100,000.00)
29 and not exceeding twenty million pesos (Php20,000,000.00) if a natural person; or by a fine of
30 not less than one million pesos (Php1,000,000.00) but not exceeding one hundred million
31 pesos (Php100,000,000.00) if a firm, at the discretion of the Commission.



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

(b) Failure to Comply With an Order of the Commission. — Any person who
unjustifiably fails or neglects to comply with any term or condition of a binding ruling, or a cease
and desist order issued by the Commission, shall pay a fine of not less than Fifty thousand
pesos (Php50,000.000) for each violation. Each violation shall be deemed a separate offense.
In the case of continued non-compliance, the legal interest (herein fixed at 6% per annum) shall
be levied on the fine imposed until the orders are complied with

(c) Supply of Incorrect or Misleading Information. — The Commission may likewise
impose upon persons or entities fines of not less than Five thousand pesos (Php 5,000.00) to
not more than One hundred thousand pesos (Php100,000.00) where, intentionally or
negligently, they supply incorrect or misleading information in any document, application or
other paper filed with or submitted to the Commission or supply incorrect or misleading
information in an application or other paper filed with or submitted to the Commission or supply
incorrect or misleading information in an application for a binding ruling, a proposal for a
consent judgment, proceedings relating to a show cause order, or application for modification of
the Commission's ruling, order or approval, as the case may be.

SEC. 12. Criminal Penalties. — Without prejudice to the violation of other laws, any
firm that shall be found to have violated Sections 8, 9, and 10 of this Act, or any combination
thereof, shall, for each and every violation, be punished by a fine of not less than one
hundred thousand pesos (Php100,000.00) and not exceeding twenty million pesos
(Php20,000,000.00) if a natural person; by a fine of not less than one million pesos
(Php1,000,000.00) but not exceeding one hundred million pesos (Php100,000,000.00) if a
firm, and by imprisonment not exceeding ten (10) years, or both, at the discretion of the court.

In the alternative, a fine shall be imposed in the amount double the gross proceeds
gained by the violator or double the gross loss suffered by the plaintiffs.

For purposes of determining the persons who will suffer the punishment of imprisonment
as provided under the preceding paragraph, provisions of the Revised Penal Code, Title II,

Articles 16, 17, 18, and 19 on criminal liability of principals, accomplices, and accessories shall
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CHAPTER V
ENFORCEMENT

SEC. 13. Preliminary Inquiry. — The Commission shall motu propio, or upon the filing
of a verified complaint by an interested party or upon referral by the concerned regulatory
agency, initiate a preliminary inquiry for the enforcement of this Act.

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

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

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

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

SEC.16. Self-Incrimination. — Pursuant to the preceding section, a person who is the
Subject of any preliminary inquiry or investigation by the Commission shall produce the
specified document or information when so required by written notice subject only to the
limitations provided for in Article Ill, Section 17 of the 1987 Philippine Constitution.


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SEC. 17. Privileged Communication. - Nothing in the preceding section shall
compel the disclosure of privileged communication

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

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

SEC. 19. Leniency. - Any person or firm which cooperates or furnishes any
information, document or data to the Commission before or during the conduct of the
preliminary inquiry that constitutes material evidence as determined by the Commission under
this Act shall be immune from any suit or charge including from the affected parties and third
parties: Provided, That the person or firm is not the most guilty. Provided, further, That any
person or firm which cooperates or furnishes information, document or data to the Commission
in connection to an investigation being conducted shall not be subjected to any form of reprisal
or discrimination: Provided, furthermore, that such reprisal or discrimination shall be
considered a violation of this Act and subjected to the penalties provided for under Section 11
hereof.

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

SEC. 20. Termination and Action on Preliminary Inquiry. - The Commission, after
considering the statements made, or documents or articles produced, in the course of an
inquiry conducted by it, shall terminate the preliminary inquiry by issuing a resolution ordering

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its closure if no violation or infringement of this Act is found; or by issuing a nolo contendere
resolution; or issuing a resolution to, singly or cumulatively, (a) impose penalties in the range
provided under Section 11 hereof; (b) order the rectification of certain acts or omissions; or (c)
order the restitution of the affected parties.

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

If the evidence so warrants, the Commission shall file criminal cases for violation of this
Act or relevant laws before the Department of Justice pursuant to Section 12 of this Act.

SEC. 21. Nolo Contendere Resolution. - Any firm under inquiry for violation of the
provisions of this Act may submit to a nolo contendere resolution at any time before the
termination of the preliminary inquiry by: a) the payment of an amount within the range of
penalties provided for under Section 11 hereof b) by entering into an undertaking to effectively
stop and rectify the acts complained against, make restitution to the affected parties, whether or
not the parties are plaintiffs or witnesses; and, c) by submitting regular compliance reports as
may be directed: Provided, That a nolo contendere resolution shall not bar any inquiry for the
same or similar acts if continued or repeated.

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

i Request for Binding Ruling - Any person who is in doubt as to whether the
contemplated or existing act, course of conduct, agreement, decision or practice is in
compliance with, is exempt from, or in violation of any of the provisions of this Act,
other competition laws, or implementing rules and regulations thereof, may request

the Commission, in writing, to render a binding ruling thereon:



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

(c) Proposal for Consent Judgment - At any time prior to the issuance of a binding
ruling, the promulgation of cease and desist judgment under a show cause order or
the promulgation of a decision of judgment in any administrative, civil, or criminal
case, the person or persons, whose business conduct is under inquiry in the particular
proceedings may, without in any manner admitting a violation of this Act or any other
competition laws, submit to the Commission a written proposal for the entry of a consent
judgment, specifying therein the terms and conditions of the proposed consent
judgment.

(d) Consultations - Prior to the filing 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 ot 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 thereform, 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

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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 of conduct, agreement, decision, or practice found to be
in violation of the provisions of this Act; and
(2) Administrative Penalty or Fine. - To pay the fine therein fixed;

(f. 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;

(g) 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;

(h) Modification or Reversal of Ruling, Order or Approval. - The Commission may motu
proprio or upon petition of an interested party, after notice and hearing,
reopen and alter, modify, or set aside, in whole or in part, a binding ruling, a cease-
and-desist order, or an approved consent judgment:

(1) Whenever conditions of material fact or law have so change as to require such
action;

(2) When the concerned person or persons fail or refuse, without justifiable cause
therefore, to comply with any condition attached to such ruling, order, or
approval; or

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(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
tuling, order, or approval.

The modification or reversal of a binding ruling, a cease and desist order, or an
approved consent judgment shall have no retroactive effect and shall not affect or impair
any right legally acquired prior to the modification or reversal thereof, except, that the
party who is guilty of unjustified failure or refusal to comply as specified in paragraph (2)
hereof, or have deliberately supplied such falsified material fact, data or information as
specified in paragraph (3) above, is barred from claiming any vested right therein.

SEC. 23. Standards.- In the exercise of its powers or in the discharge of its duties
under this act, the Commission shall consider the following:

(a) the way a given industry is structured or organized whether monopolistic, oligopolistic,
or competitive;

(b) the ways the persons engaged in business within a given industry act, behave or
conduct themselves in such matters as setting prices, determining output, and other
relevant factors and the resulting performance of the industry as a whole;

(c) the supply and demand situation for the relevant goods or services:

(d) the appreciable impact of the particular market conduct on market conditions, if any;

(e) the need to bring together complimentary skills to avoid duplication and promote
efficiency in the industry;

(f) the need to determine whether or not the anticompetitive effect of a particular market
conduct may be offset by increased efficiency and reduction of excessive or
unnecessary expenses;

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

(h) the need to increase productivity in the particular industry involved;

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

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

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

(\) the need to encourage or develop small and medium-sized industries;

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

(n) the need to pool capital resources;

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

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

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

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

SEC. 24. Contempt. The Commission or any of its Divisions may summarily punish
for contempt by imprisonment not exceeding thirty (30) days or by fine, or both, any person
guilty of such misconduct in the presence of the

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

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

SEC. 26. Appeal to the Court of Appeals. - Any party who has actively participated in
the proceedings before the Commission and is adversely affected by a binding ruling, order, or
resolution, decision, judgment, rule or regulation promulgation after notice and hearing by the
Commission sitting en banc, may appeal, by means of a notice of appeal and a verified
petition for review served upon the Commission and other parties who actively participated in
the proceedings, to the Court of Appeals within thirty (30) days from receipt thereof, on the
ground that the appealed action of the Commission:

i. is arbitrary to constitutional rights, power, privilege, or immunity;
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|. is contrary to the constitutional rights, power, privilege, or immunity;
is in excess of statutory jurisdiction, authority, or limitations, or is contrary to law;

iv. is without observance of the procedure required by law; and
v. is not supported by substantial evidence.
The Commission shall be included as a party respondent to the case and shall be
represented by its own legal staff.

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

Court.

SEC. 28. Reception of Additional Evidence. - Any party in the appellate
proceedings may apply for leave to the Court of Appeals or the Supreme Court, to adduce
additional evidence before the Commission. The Court may, under such terms and conditions
as it may prescribe, order the Commission to receive such additional evidence upon showing
that it is material and there are reasonable grounds for the failure to present said evidence in
the proceedings before the Commission. The Commission, sitting en banc, may modify its
findings as to the facts, or make new findings, by reason of the additional evidence taken, and
it shall file with the appellate court such modified or new findings and its recommendations for
the affirmation, modification, or setting aside of the appealed binding ruling, order, resolution,
decision, judgment, rules or regulation.

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

the preceding sections.

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


and severally liable with the firm for the fine imposed therein if they are directly involved in the
violation committed or guilty of gross negligence.

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

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

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

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

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

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

SEC. 33. Private Action - Regardless of the status or pendency of any proceedings,
any firm that suffers injury by reason of any violation of this Act may institute a separate and
independent civil action, irrespective of the amount involved in the controversy against the
defendant or defendants and shall recover treble damages sustained, the costs of suit and
reasonable attorney's fees: Provided, however, That no filing fees shall be collected: Provided,
further, That the filing fees shall constitute a first lien in the award of damages.

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SEC. 34. Effect of Final Judgment - Any final judgment in a civil or criminal action
brought by the Commission on behalf of the people of the Philippines under this Act to the
effect that a defendant has violated any or all of the provisions of this Act shall be res judicata
as to any claim by any person on whose behalf such action was brought: Provided, That such
person notifies the court having jurisdiction of the case within the period given by the court:
Provided, further, That such period shall not be less than ninety (90) days.

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

SEC. 35. Distribution of Damages Recovered. - The damages recovered in a civil
action under Section 20 if this Act shall be distributed in the following manner: (1) for restitution
of affected parties, as determined by the Court having jurisdiction of the case; and, (2) the
remainder of which total amount of damages shall be deemed a civil penalty by the Court and
shall be deposited to the National Treasury as part of the general fund of the government:
Provided, That any distribution procedure adopted by the Court shall give preference to
individual consumers and afford each interested person a reasonable opportunity to secure his
appropriate portion of the net damages obtained.

SEC. 36. Measurement of Damages. - Damages may be proved and assessed in the
aggregate by statistical or sampling methods, by the computation of illegal overcharges, or by
such other reasonable system of estimating aggregate damages as the court in its discretion
may permit without the necessity of separately proving the individual claim, of, or amount of
damage to, persons on whose behalf the suit was brought.

SEC. 37. Immunity from Suit. - The Commissioners and the Staff of the Commission
shall not be subject to any action, claim or demand in connection with any act done or omitted
by them in the performance of their duties and exercise of their powers, except for those acts
and omissions done in evident bad faith or gross negligence.

The Commission shall indemnify each Commissioner and Staff of the Commission for all
costs and expenses reasonably incurred by such persons in connection with any civil or
criminal actions, suits or proceedings to which they may be or made a party by reason of the

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performance of their duties or exercise of their powers, unless they are finally adjudged in such
actions or proceedings to be liable for evident bad faith or gross negligence.

CHAPTER VI
OTHER PROVISIONS

SEC. 38. Statute of Limitations. - Any civil or criminal action to enforce any cause of
action arising from a violation of any provision of this Act shall be forever barred unless
commenced within five (5) years after the cause of action accrues. The running of the statute of
limitation shall be suspended during the pendency of any proceeding.

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

SEC. 39. Intellectual Property Rights. - The implementation of the provisions of this
Act shall be without prejudice to the rights, liabilities and remedies under Republic Act No.
8293, otherwise known as the Intellectual Property Code of the Philippines: Provided, That, the
exercise of intellectual property rights shall not in any way be used to justify violations of this
Act.

SEC. 40. Trade Associations. - Nothing contained in this Act shall be construed to
prohibit the existence and operation of trade associations organized to promote quality
standards and safety issues. Provided, That, these associations shall not in any way be used to
justify any violation of this Act.

SEC. 41. Congressional Oversight Committee. - To oversee the implementation of
this Act, there shall be created a Congressional Oversight Committee on Fair Competition
(COCFC) to be composed of the Chairpersons of the Senate Committees on Trade and
Commerce, Economic Affairs, and Finance; the Chairpersons of the House of Representatives
Committees on Trade and Industry, Economic Affairs and Appropriations; and two members

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each from the Senate and the House of Representatives who shall be designated by the
Senate President and the Speaker of the House of Representatives; Provided, That one of the
two Senators and one of the two House Members shall be nominated by the respective Minority
Leaders of the Senate and the House of Representatives. The Congressional Oversight
Committee shall be jointly chaired by the Chairpersons of the Senate Committee on Trade and
Commerce and the House of Representatives Committee on Trade and Industry. The Vice-
Chair of the Congressional Oversight Committee shall be jointly held by the Chairpersons of the
Senate Committee on Economic Affairs and the House of Representatives Committee on
Economic Affairs.

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

CHAPTER VII
FINAL PROVISIONS

SEC. 42. Implementing Rules and Regulations. - The Commission shall prepare the
necessary rules and regulations within one hundred twenty (120) days from the effectivity of
this Act: Provided, That, where the same would apply to an industry or a sub-sector of industry
that is subject to the jurisdiction of a regulatory agency, the Commission shall, in preparing the
guidelines, consult, with the concerned regulatory agency and stakeholders: Provided, further,
That the Commission may revise such guidelines as it deems necessary: Provided, however,
That such revised guidelines shall only take effect following its publication in two newspapers of
general circulation.

SEC. 43. Appropriations. - The amount necessary to implement the provisions of this
Act shall be included in the annual General Appropriations Act. However, for the initial
budgetary requirements of the Commission, the amount of One hundred million pesos
(P100,000,000.00) is hereby appropriated.

SEC. 44. Transitory Provision. - For the purpose of ensuring that the Commission is
organized within the mandated period of one hundred eighty (180) days after the approval of

this Act, an Inter-Agency Task Force shall be created and composed of the following agencies:

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a.) Agencies which will provide administrative support to the Commission:

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

ii. Department of Budget and Management, to be represented by the Secretary with
the Undersecretary in charge of organization of new offices and position
Classifications as alternate;

b.) Agencies which currently perform functions germane or are related to the purposed

of the Commission:

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

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

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

The Task Force shall also meet in Executive Session with all the agency heads to
deliberate on possible appointees for the position of Chairperson and Associate Commissioners.
of the Commission for submission to and consideration of the President of the Philippines.

The Task Force shall also commence the coordinated advocacy for this Act within
ninety (90) days from the effectivity thereof. It shall also implement a broad-based consultation
on inputs for the Implementing Rules and Regulations of this Act which must be completed
within one hundred twenty (120) days from the effectivity of this Act. The report on the
consultations shall be submitted to the Commission within fifteen (15) days from its
establishment a copy of which will be furnished to the Congressional Oversight Committee on
Fair Competition.

SEC. 45. Suppletory Application. - For purposes of this Act, the Revised Penal
Code, as amended, and other applicable laws shall be applied in a suppletory character.

SEC. 46. Separability Clause. - \f any clause, sentence, section or part of this Act shall
be adjudged by a court of competent jurisdiction to be invalid, such judgment shall not affect,
impair or invalidate the remainder of this Act, but shall be confined in its operation to the
clause, sentence, paragraph, section, or part thereof directly involved in the controversy.

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SEC. 47. 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:

(a) Sec. 5(3) of Republic Act No. 7851 or the Price Act;
(b) Sec. 5(f) of Republic Act No. 7925 or The Public Telecommunications Policy Act;
(c) Sec. 11(a) and (b) of Republic Act No. 8479 od the Downstream Oil Industry

Deregulation Act;

(d) Sec. 45 of Republic Act No. 9136 or The Electric Power Industry Reform Act;
(e) Sec. 13 of Republic Act No. 9295 or The Domestic Shipping Development Act;
(f) Sec. 24 and 25 of Republic Act No. 9502 or The Universally-Accessible Cheaper and

Quality Medicines Act.

Provided, That in case of conflict between this Act and such provisions of existing
competition laws and regulations, the provisions of this Act shall prevail.

SEC. 48. Effectivity Clause. - This Act shall take effect fifteen (15) days following its
publication in the Official Gazette and in at least two (2) national newspapers of general
circulation: Provided, however, That in order to allow affected parties time to renegotiate
agreements or restructure their business to comply with the new competition law, the penal
provisions under Section 12 of this Act, except for those already prohibited under the Revised
Penal Code, shall be imposed one (1) year after the effectivity of the Implementing Rules and
Regulations of this Act.

Approved,

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