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

EIGHTEENTH CONGRESS
First Regular Session

House Bill No. 6243

Introduced by Representative SHARON S. GARIN

AN ACT STRENGTHENING THE POWERS OF THE PHILIPPINE COMPETITION
COMMISSION AND LEGISLATING THE NATIONAL COMPETITION POLICY,
AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 10667,
OTHERWISE KNOWN AS THE “PHILIPPINE COMPETITION ACT”

EXPLANATORY NOTE

Since its enactment in July 2015, Republic Act No. 10667, otherwise known as
the Philippine Competition Act ("PCA"), has been regarded to be revolutionary and
game-changing. Almost three decades in the making, the PCA is the country’s first
comprehensive legal framework on competition. It codifies the government's adoption of
the recognized principle that genuine and effective market competition encourages
innovation among market players, rewards efficient and productive use of resources,
and ultimately redounds to the benefit of consumers by lowering prices and enhancing
their right of choice over goods and services offered in the market.

Taking the lead in the promotion of the PCA's policy objectives is the Philippine
Competition Commission ("PCC"), the country's first central competition authority.
Formally established in 2016, the PCC has dutifully served its statutory role of leveling
the playing field across all markets by enforcing the three pillars of competition law
provided for under the PCA: anti-competitive agreements, abuse of dominant position,
and anti-competitive mergers and acquisitions.

Within four years after its establishment, PCC has undertaken the
implementation of competition law in the country, and stands shoulder-to-shoulder with
its fellow competition authorities in other jurisdictions with a far more advanced level of
competition enforcement. Despite being a relatively young agency, PCC has been
recognized by global peers and practitioners for its active and advanced merger control
regime. From 2016 to 31 December 2019, the PCC had received 204 notifications for
M8<A transactions, cumulatively worth PHP 3.3 trillion, of which 188 had been approved.


The PCC had also intensified its enforcement activities across a broad range of
industries in 2019. As a result of its greater public visibility, the PCC had received a total
of 309 queries to date, 135 of which are informal complaints on possible cartels and
abuses of dominance. Recognizing that market competition can also be stifled by
existing laws and regulations, the PCC has also increased its competition research and
policy advocacy efforts, especially in priority sectors identified by the Commission.

Despite all these efforts, however, mainstreaming a culture of competition in the
country remains to be a gargantuan undertaking. While the Philippines’ competition
regime is a marked improvement from its previous state prior to the passage of the
PCA, the PCC has experienced constraints in carrying out some enforcement activities
due to the current wording of its charter that prevents full potential of detecting and
prosecuting anti-competitive activities.

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Hence, this measure aims to improve the PCC’s ability to investigate cartels,
market foreclosure activities, and other types of monopolistic conduct. It also seeks to
amend relevant the provisions of the PCA to strengthen the organizational and
administrative structure of the PCC to ensure a more effective and efficient exercise of
its mandate.

Finally, in recognition of the vital role that the government plays in ensuring fair
competition, this measure seeks to institutionalize and legislate the principles of the
National Competition Policy. A whole-of-government approach towards imbibing
competition policy can be achieved by applying the principle of competitive neutrality in
government-owned and controlled corporations, as well as in the entire gamut of
government activities and interventions.

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

Rep. SI S. GARIN



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

Eighteenth Congress
First Regular Session

6243
House Bill No.

Introduced by Representative SHARON S. GARIN

AN ACT
STRENGTHENING THE POWERS OF THE PHILIPPINE COMPETITION
COMMISSION AND LEGISLATING THE NATIONAL COMPETITION POLICY,
AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 10667,
OTHERWISE KNOWN AS THE “PHILIPPINE COMPETITION ACT”

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

SECTION 1. Section 4 of Republic Act No. 10667 shall be amended to read as follows:
“Sec. 4. Definition of Terms. — As used in this Act:
“Xxx

“(g) Dominant position refers to a position of economic strength that an entity or entities hold
which makes it capable of controlling the relevant market independently from any or a
combination of the following: competitors, customers, suppliers, or consumers. FOR
PURPOSES OF THIS ACT, DOMINANT POSITION SHALL ALSO MEAN SIGNIFICANT
MARKET POWER;

“(b) Entity refers to any person, natural or juridical, sole proprietorship, partnership, combination
or association in any form, whether incorporated or not, INCLUDING JOINT VENTURE
AGREEMENTS OR CORPORATIONS WHETHER REGISTERED OR NOT, domestic or
foreign, including those owned or controlled by the government} engaged directly or
indirectly in any economic activity;

"Xo
“(L) JOINT VENTURE REFERS TO A BUSINESS ARRANGEMENT WHEREBY AN ENTITY

OR GROUP OF ENTITIES CONTRIBUTE CAPITAL, SERVICES, ASSETS, OR A
COMBINATION OF ANY OR ALL OF THE FOREGOING, TO UNDERTAKE AN


INVESTMENT ACTIVITY OR A SPECIFIC PROJECT, WHERE EACH ENTITY SHALL
HAVE THE RIGHT TO DIRECT AND GOVERN THE POLICIES IN CONNECTION
THEREWITH, WITH THE INTENTION TO SHARE BOTH PROFITS AND RISKS AND
LOSSES SUBJECT TO AGREEMENT BY THE ENTITIES.

SECTION 2. A new chapter shall be inserted, and the numbering of sections shall be
revised accordingly:

“CHAPTER __
“NATIONAL COMPETITION POLICY

“SEC. __. KEY ELEMENTS OF NATIONAL COMPETITION POLICY. IN THE EXERCISE
OF THEIR RESPECTIVE FUNCTIONS, ALL NATIONAL GOVERNMENT AGENCIES,
OFFICES, INSTRUMENTALITIES, LOCAL GOVERNMENT UNITS AND GOVERNMENT-
OWNED OR CONTROLLED CORPORATIONS (GOCCs)SHALL ADOPT AND BE GUIDED
BY THE FOLLOWING KEY ELEMENTS:

(A) ALL GOVERNENT POLICIES, LAWS, RULES AND REGULATIONS, ISSUANCES
AND OTHER INTERVENTIONS SHALL PROMOTE MARKET EFFICIENCY AND
ENHANCE CONSUMER WELFARE, AND SHALL NOT DISTORT COMPETITION BY
CREATING BARRIERS TO ENTRY, PROMOTONG COLLUSIVE MARKET
OUTCOMES, OR RESTRICTING TRADE, EXCEPT WHEN THE RESTRICTIONS ARE
PROVEN CONSISTENT WITH THE PROMOTION OF CONSUMER WELFARE AND
CANNOT BE ACHIEVED BY OTHER MEANS, OR WHEN THE BENEFITS TO THE
COMMUNITY OUTWEIGH THE COSTS; AND

(B) GOCCS AND PRIVATE SECTOR BUSINESSES SHALL COMPETE ON A LEVEL
PLAYING FIELD. GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS
SHALL BE HELD TO THE SAME STANDARDS AS PRIVATE SECTOR BUSINESSES
AND SHALL NOT ENJOY NET COMPETITIVE ADVANTAGES OR DISADVANTAGES
OVER PRIVATE SECTOR BUSINESSES SIMPLY BY VIRTUE OF PUBLIC SECTOR
OWNERSHIP, UNLESS IT CAN BE CLEARLY DEMONSTRATED THAT THE
GREATER PUBLIC INTEREST WILL BE SERVED AND THERE IS LACK OF
COMMERCIAL VIABILITY.

“SEC. ___. REVIEW OF RELEVANT POLICIES. — ALL NATIONAL GOVERNMENT
AGENCIES, OFFICES, INSTRUMENTALITIES, LOCAL GOVERNMENT UNITS, AND
GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS ARE MANDATED TO
REVIEW THEIR RESPECTIVE POLICIES, LAWS, RULES AND REGULATIONS,
ISSUANCES AND INTERVENTIONS AND OTHER RELEVANT LAWS APPLICABLE TO
THEIR RESPECTIVE OFFICES TO DETERMINE WHETHER THEY RESTRICT, PREVENT
OR LESSEN COMPETITION, IN COMPLIANCE WITH THE PRINCIPLES ABOVE AND
SUBJECT TO THE GUIDELINES FORMULATED BY THE NATIONAL ECONOMIC AND
DEVELOPMENT AUTHORITY AND THE PHILIPPINE COMPETITION COMMISSION.

“SEC. __. ENFORCEMENT OF COMPETITION-RELATED LAWS AND ISSUANCES. —
“TO ASSIST THE PHILIPPINE COMPETITION COMMISSION IN ENFORCING AND

ATTAINING THE OBJECTIVES AND PURPOSES OF THIS ACT, ALL
NATIONAL GOVERNMENT AGENCIES, OFFICES, INSTRUMENTALITIES, LOCAL


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GOVERNMENT UNITS, AND GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS
SHALL:

(A) COORDINATE WITH THE PHILIPPINE COMPETITION COMMISSION TO.
IDENTIFY SPECIFIC ACTIONS THAT THEY CAN UNDERTAKE IN THEIR AREAS.
OF RESPONSIBILITY TO PROMOTE COMPETITION, ELIMINATE ANTI-
COMPETITIVE BEHAVIOR AND UNDUE REGULATORY BURDENS

ON COMPETITION;

(B) ESTABLISH CHANNELS OF COMMUNICATION AND COOPERATION WITH THE
PHILIPPINE COMPETITION COMMISSION AND REQUEST ITS ASSISTANCE IN
THE CRAFTING OF POLICY INITIATIVES RELATING TO COMPETITION;

(C) COOPERATE WITH AND EXTEND ASSISTANCE TO THE PHILIPPINE
COMPETITION COMMISSION IN THE ENFORCEMENT OF THIS ACT, AS WELL AS
ITS ORDERS AND DECISIONS; AND

(D) CONSULT THE PHILIPPINE COMPETITION COMMISSION IN ESTABLISHING A
FAIR, PREDICTABLE AND TRANSPARENT PROCESS OF RESOLVING
COMPETITION-RELATED DISPUTES THAT ARE WITHIN THEIR JURISDICTION.”

SECTION 3.The following sections of Chapter II, entitled “Philippine Competition
Commission” of Republic Act No. 10667 shall be amended to read as follows:

“Sec. 6. Composition of the Commission. - The Commission shall be A COLLEGIAL BODY
composed of a Chairperson and four (4) Commissioners. The Chairperson and the
‘Commissioners shall be citizens and residents of the Philippines, of good moral character, of
recognized probity and independence and must have distinguished themselves professionally in
Public, civic or academic service in any of the following fields: economics, law, finance,
‘commerce or engineering. They must have been in the active practice of their professions for at
least ten (10) years, and must not have been candidates for any elective national or local office
in the immediately preceding elections, whether regular or special: Provided, That at least one
(1) shall be a member of the Philippine Bar with at least ten (10) years of experience in the
active practice of law, and at least one (1) shall be an economist. The Chairperson and the
Commissioners who shall have the rank equivalent of cabinet secretary and undersecretary,
respectively, shall be appointed by the President.”

Xxx

“Sec. 8. Prohibitions and Disqualifications. — The Commissioners shall not, during their tenure,
hold any other office or employment. They shall not, during their tenure, directly or indirectly
practice any profession, except in a teaching capacity, 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 or their subsidiaries. They shall strictly avoid conflict of interest in
the conduct of their office. [Fhey-shall-net-be-qualified-to-run-for-ary-office_in_the election

hereot i ra S niang-Kaba e Provided, they shall not
be allowed to personally appear or practice as counsel or agent on any matter pending before
the Commission for [two-{2)}ONE (1) years following their cessation from office.


“No spouse of relative by consanguinity or affinity within the fourth civil degree of any of the
Commissioners, the Chairperson and the Executive Director of the Commission may appear as.
counsel nor agent on any matter pending before the Commission or transact business directly
or indirectly therein during incumbency and within [fwe-{2JONE (1) years from cessation of
office.

“Sec. 9. Compensation and Other Emoluments for Members and Personnel of the

JALL POSITIONS FOR THE MEMBERS AND PERSONNEL OF THE
COMMISSION SHALL BE GOVERNED BY A COMPENSATION AND POSITION
CLASSIFICATION SYSTEM AND QUALIFICATION STANDARDS APPROVED BY THE
COMMISSION BASED ON A COMPREHENSIVE JOB ANALYSIS AND AUDIT OF ACTUAL
DUTIES AND PERSONAL RESPONSIBILITIES. THE COMPENSATION PLAN SHALL BE
COMPARABLE WITH THE PREVAILING SALARIES, BENEFITS AND EMOLUMENTS OF
THAT OF THE BANGKO SENTRAL NG PILIPINAS, AND SHALL BE SUBJECT TO
PERIODIC REVIEW BY THE COMMISSION NO MORE THAN ONCE EVERY TWO (2)
YEARS, WITHOUT PREJUDICE TO YEARLY MERIT REVIEW OR INCREASES BASED ON
PRODUCTIVITY AND EFFICIENCY. THE COMMISSION SHALL, THEREFORE, BE EXEMPT
FROM LAWS, RULES, AND REGULATIONS ON COMPENSATION, POSITION
CLASSIFICATION, AND QUALIFICATIONS STANDARDS PROMULGATED BY THE CIVIL
SERVICE COMMISSION.

“Sec. 10. Quorum. —Three (3) members of the Commission shall constitute a quorum, provided
however, that the affirmative vote of AT LEAST three (3) members shall be necessary for the
adoption of any rule, ruling, order, resolution, decision or other acts of the Commission.

“Sec. 11. Staff. — The Commission shall appoint, fix the compensation, and determine the
status, qualifications, and duties of an adequate staff, which shall include an Executive Director
of the Commission. The Executive Director, WHO SHALL HAVE A TERM OF FIVE (5) YEARS,
RENEWABLE FOR ANOTHER FIVE-YEAR PERIOD, shall be appointed by the Commission
and shall have relevant experience in any of the fields of law, economics, commerce,
management, finance or engineering for at least ten (10) years. The members of the technical
staff, except those performing purely clerical functions, shall possess at least a Bachelor's
Degree in any of the following lines of specialization: economicslaw, finance, commerce,
engineering, accounting, or management.

“Sec. 12. Powers and Functions. — The Commission shall have original and primary jurisdiction
over the enforcement and implementation of the provisions of this Act, and its implementing
rules and regulations. The Commission shall exercise the following powers and functions:

“(a) xx

“(b) Review proposed mergers and acquisitions, determine thresholds for notification, determine
the requirements and procedures for notification, and upon exercise of its powers to review,
prohibit mergers and acquisitions that wiHHAVE OR ARE LIKELY TO substantially prevent,
restrict, or lessen competition in the relevant market


(0) xxx

“(d) Upon finding, based on substantial evidence, that an entity has entered into an anti-
competitive agreement or has abused its dominant position after due notice and hearing, stop or
Tedress the same, by applying remedies, such as, but not limited to, issuance of injunctions,
requirement of divestment, REQUIREMENT OF MODIFICATION OR TERMINATION OF
CONTRACTS, OPENING ACCESS TO COMPETITORS, PROHIBITIONS ON RESTRICTIVE
CONTRACTING PRACTICES, SETTING UP OF INFORMATION FIREWALLS, MAKING
INFORMATION AVAILABLE TO THIRD PARTIES,and disgorgement of excess profits under
such reasonable parameters that shall be prescribed by the rules and regulations implementing
this Act;

“(e) xxx

“(P) Issue subpoena duces fecum and subpoena ad testificandum to require the production of
books, records, or other documents or data which relate to any matter relevant to the
investigation and personal appearance before the Commission, summon witnesses, administer
oaths, and issue [inter show cause orders [and-sease-and-desist-ordersafter
: ing] in accordance with the rules and regulations implementing this Act;
*(g) [Upon-order-of-the-court, uJUndertake, BY ITSELF OR THROUGH ITS DEPUTIZED LAW
ENFORCEMENT AGENCY, TO SEARCH ANDinspections-oflNSPECT business premises and
other offices, STRUCTURES, SPACES, land and vehicles, as used by the entity, where it
reasonably suspects that relevant [beoks, tax recordeor-other decuments]INFORMATION which
relate to any matter relevant to the investigation are kept, in-order-to-prevent_the-removal,

EXAMINE, COPY, PHOTOGRAPH, RECORD OR PRINT SUCH INFORMATION;

“(h) Issue adjustment or divestiture orders including orders for corporate reorganization or
divestment in the manner and under such terms and conditions as may be prescribed in the
rules and regulations implementing this Act. [Adjustment-or—divestiture—orderswhich—are

“() xxx
“@) xx
“() xxx
“() xxx

“(m) xxx


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“(n) xxx
*(0) xxx
“(P) xx
“(q) x xx
“(@) Advocate pro-competitive policies of the goverment by:
(1) Reviewing economic and administrative regulations, motu proprio or upon request, as to
or not they adversely affect relevant market competition, and advising the
concerned agencies against such regulations; and

(2) Advising the Executive Branch on the competitive implications of govemment actions,
Policies and programs; [and]

“(s) Charging reasonable fees to defray the administrative cost of the services rendered.;
“(T) ISSUE WARNINGS FOR ANY POTENTIAL VIOLATIONS OF THIS ACT;

“(U) ISSUE AND IMPOSE INTERIM MEASURES;

“(V) ISSUE, AFTER DUE NOTICE AND HEARING, CEASE AND DESIST ORDERS; AND

“(W) DEVELOP AND UTILIZE A RESEARCH AND INVESTIGATION FUND FOR PURPOSES
OF ENFORCEMENT OPERATIONS, INFORMANT’S BENEFITS OR PROTECTION.

“SEC. 12 — A _. POWERS AND FUNCTIONS OF THE CHAIRPERSON. - THE
CHAIRPERSON OF THE COMMISSION SHALL ACT AS THE CHIEF EXECUTIVE OFFICER
OF THE COMMISSION. THE MANAGEMENT OF THE PCC SHALL BE VESTED IN THE
CHAIRPERSON WHO SHALL HAVE THE FOLLOWING POWERS AND DUTIES:

(A) PRESIDE OVER THE MEETINGS OF THE COMMISSION;

(B) SUBJECT TO THE APPROVAL OF THE COMMISSION, DETERMINE THE STAFFING
PATTERN AND THE NUMBER OF PERSONNEL OF THE COMMISSION AND
DEFINE THEIR DUTIES AND RESPONSIBILITIES;

(C)SUBJECT TO THE APPROVAL OF THE COMMISSION, APPOINT, REMOVE,
SUSPEND, OR OTHERWISE DISCIPLINE FOR CAUSE, ANY EMPLOYEE OF THE
COMMISSION; AND

(D) PERFORM SUCH OTHER DUTIES AS MAY BE DELEGATED OR ASSIGNED TO
HIM/HER BY THE COMMISSION FROM TIME TO TIME.

“Sec. 13. Office for Competition (OFC), Powers and Functions. — The OFC under the
Department of Justice (DOJ-OFC) shall only conduct preliminary investigation and undertake
prosecution of all criminal offenses arising under this Act and other competition-related laws in
accordance with Section 31 of Chapter VI of this Act, UPON THE FILING OF A CRIMINAL
COMPLAINT BY THE PCC WITH THE DOJ. The OFC shall be reorganized and allocated
resources as may be required therefor to effectively pursue such mandate.


SECTION 4.The following sections of Chapter III, entitled “Prohibited Acts” of Republic
Act No. 10667 shall be amended to read as follows:

“Sec. 14. Anti-Competitive Agreements. —
(a) The following agreements, between or among competitors, are per se prohibited:

(1) DIRECTLY OR INDIRECTLY FIXING PURCHASE OR SELLING PRICES, [Restricting
competition as-te-price], or components thereof, or other terms of trade;

(2) {Fixing-price-at-an-austion-or in] RIGGING any form of bidding including THROUGH
cover bidding, bid suppression, bid rotation and market allocation and other analogous
Practices of bid manipulation;

{3) Setting, limiting, or controlling production, markets, technical development, or
investment;

{(2)(4) Dividing or sharing the market, whether by volume of sales or purchases, territory,
type of goods or services, buyers or sellers or any other means;

{K@)(B) Agreements other than those specified in (a) and (b) of this section which have the
object or effect of substantially preventing, restricting or lessening competition shall also be
prohibited: Provided, Those which contribute to improving the production or distribution of
goods and services or to promoting technical or economic progress, while allowing

consumers a fair share of the resulting benefits, may not necessarily be deemed a violation
of this Act.

xxx

“SEC. 15. Abuse of Dominant Position. — It shall be prohibited for one or more entities to abuse
their dominant position by engaging in conduct that would substantially prevent, restrict or
lessen competitionSUCH AS BUT NOT LIMITED TO THE FOLLOWING:

bod
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peed

(€) Imposing restrictions on the lease or contract for sale or trade of goods or services
concerning where, to whom, or in what forms goods or services may be sold or traded, such as
fixing prices, giving preferential discounts or rebate upon such price, or imposing conditions not
to deal with competing entities, where the object or effect of the restrictions is to prevent, restrict
or lessen competition substantially: Provided, That nothing contained in this Act shall
NECESSARILY [prohibit-of render unlawful:

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agreement]THOSE AGREEMENTS OR PRACTICES WHICH CONTRIBUTE TO
IMPROVING THE PRODUCTION OR DISTRIBUTION OF GOODS OR TO
PROMOTING TECHNICAL OR ECONOMIC PROGRESS, WHILE ALLOWING
CONSUMERS A FAIR SHARE OF THE RESULTING BENEFIT, AND WHICH DOES
NOT:

(A) IMPOSE ON THE ENTITIES CONCERNED RESTRICTIONS WHICH ARE
NOT INDISPENSABLE TO THE ATTAINMENT OF THESE OBJECTIVES; AND

(B) AFFORD SUCH ENTITIES THE POSSIBILITY OF ELIMINATING COMPETITION
IN RESPECT OF A SUBSTANTIAL PART OF THE PRODUCTS IN QUESTION; or

(2) Agreements protecting intellectual property rights, confidential information, or trade
secrets;

XXX
XXX
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“Provided, finally, That the foregoing shall not constrain the Commission [or-the-relevant
regulator] from pursuing measures that would promote fair competition or more competition as
provided in this Act, INCLUDING THE IMPOSITION OF SIGNIFICANT MARKET POWER
OBLIGATIONS.

“SEC. 18. Effect of Notification. — If within the relevant periods stipulated in the preceding
section, the Commission determines that such agreement prohibitedHAS OR IS LIKELY TO
SUBSTANTIALLY PREVENT, RESTRICT, OR LESSEN COMPETITION[under Section 26} and
does not qualify for exemption under Section 21 of this Chapter, the Commission may:

(@) Prohibit the implementation of the agreement;

(b) Prohibit the implementation of the agreement unless and until it is modified by changes
specified by the Commission:;

(c) Prohibit the implementation of the agreement unless and until the pertinent party or parties
enter into legally enforceable agreements specified by the Commission-; OR

(D) APPROVE OR TAKE NO FURTHER ACTION ON THE AGREEMENT, SUBJECT TO
COMPLIANCE WITH SPECIFIC CONDITIONS.”

Section 5. A new chapter is hereby inserted and numbering of sections adjusted
accordingly to read as follows:

“CHAPTER __

“GOVERNMENT INCENTIVES


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“SEC. ___ REVIEW OF GOVERNMENT INCENTIVES. — THE COMMISSION SHALL HAVE
‘THE POWER TO REVIEW POSSIBLE ANTI-COMPETITIVE EFFECTS OF INCENTIVE
‘SCHEMES OF THE GOVERNMENT BASED ON THE FOLLOWING FACTORS:

(1) WHETHER THE INCENTIVE SCHEME GRANTS UNDUE COMPETITIVE ADVANTAGE
TO AN ENTITY OR ENTITIES;

(2) WHETHER THE INCENTIVE SCHEME IS PROPORTIONATE AND NECESSARY TO
ACHIEVE A GIVEN EFFICIENCY OR EQUITY OBJECTIVE;

(3) WHETHER THE ACTUAL BENEFIT ACHIEVED THROUGH THE INCENTIVE SCHEME
OUTWEIGHS THE COST OF DISTORTING COMPETITION; AND

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(4) OTHER FACTORS THAT MAY BE DETERMINED BY THE COMMISSION.
}

“SEC. ___. RECOMMENDATION ON GOVERNMENT INCENTIVES. — FOR INCENTIVES
WHICH THE COMMISSION DEEMS TO HAVE ADVERSELY AFFECTED COMPETITION IN
THE RELEVANT MARKET OR IN THE MARKET FOR GOODS AND SERVICES
ACCORDING TO SECTION 24, THE COMMISSION SHALL ISSUE A RULING TO THE
FISCAL INCENTIVES REVIEW BOARD, INCLUDING A RECOMMENDATION FOR,
REMEDIES SUCH AS THE REVISION OR REVOCATION OF SUCH INCENTIVE SCHEME
AND THE RECOVERY OF INCENTIVES WITH INTEREST.”

Section 6. The following provisions under Chapter V, entitled “Disposition of Cases” of
R.A. No. 10667 are hereby amended to read as follows:

“SEC. 26. Determination of Anti-Competitive Agreement or Conduct. — In determining whether
an anti-competitive agreement or conduct [has—beer—committed]) SUBSTANTIALLY
PREVENTS, RESTRICTS, OR LESSENS COMPETITION, the Commission, IN
APPROPRIATE CASES, shall, INTER ALIA:

XxX
"SEC. 28. Forbearance. — The Commission may forbear from applying the provisions ofthis Act,
for a limited time, in whole or in part, in all or specific cases, on an-entity-0FA group of entities, if
in its determination:
XXX
“The Commission's order exempting the relevant [entity-or} group of entities under this section
shall be made public. Conditions may be attached to the forbearance if the Commission deems
it appropriate to ensure the long-term interest of consumers.”

Section 7.The provisions found under Chapter VI, entitled “Fines and Penalties” of R.A.
No. 10667 shall be amended to read thus and renumbered accordingly:

“Sec. 28, Administrative Penalties. —

(a) Administrative Fines. — In any investigation under Chapter Ill, Sections 14 and 15, and
Chapter IV, a iach 17 and 20 of this Act, after due notice and hearing, the Commission

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may impose the-follewing-schedule—of-administrative fines EQUIVALENT UP TO TEN
PERCENT OF THE TOTAL GLOBAL TURN-OVER OF THE ULTIMATE PARENT
ENTITYon-anyOF THE entity found to have violated the said sections[:}.

In fixing the amount of the fine, the Commission shall have regard to both the gravity and the
duration of the violation.

(b) Failure or Refusal to Comply with a Ruling, Order, or Decision of the Commission— An
entity which fails or refuses to comply with a ruling, order or decision issued by the Commission
shall pay a penalty of not less than [fityJONE HUNDRED thousand pesos
((P50,000.00}P 100,000.00) up to [twoJFIVE million pesos ({P2,000,000.00}P5,000,000.00) for
each violation and a similar amount of penalty for each day thereafter until the said entity fully
complies. Provided that these fines shall only accrue daily beginning forty-five (45) days from
the time that the said decision, order or ruling was received.

(c) Supply of Incorrect, INCOMPLETE or Misleading Information. - The Commission may
likewise impose upon any entity fines of up to [one}TWO milion pesos (P{}}2,000,000.00) where,
intentionally or negligently, they supply incorrect, INCOMPLETE or misleading information in
any document, application or other paper bled 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.

(d) Any other violations not specifically penalized under the relevant provisions of this Act OR
ITS IMPLEMENTING RULES OR REGULATIONS shall be penalized by a fine of not less
thanffiftyJONE HUNDRED thousand pesos (P[5}100,000.00) up to twoFIVE million pesos
(P52,000,000.00).

(&) OBSTRUCTION. — THE COMMISSION MAY IMPOSE A FINE OF NOT LESS THAN ONE
HUNDRED THOUSAND PESOS (P100,000.00) UP TO FIVE MILLION PESOS
(P5,000,000.00) ON ANYONE WHO COMMITS ANY OBSTRUCTION OF ANY
INVESTIGATION OR PROCEEDINGS OF THE COMMISSION, THE IMPLEMENTATION OF
THE ORDERS, RULINGS, OR DECISIONS OF THE COMMISSION, OR THE
ENFORCEMENT OF THE ACT, ITS IMPLEMENTING RULES, OR OTHER COMPETITION
LAWS

(F) REPRISAL OR DISCRIMINATION. — ANY PERSON THAT COMMITS ANY FORM OF
REPRISAL OR DISCRIMINATION AGAINST ANYONE COOPERATING OR FURNISHING
INFORMATION, DOCUMENT, OR DATA TO THE COMMISSION IN CONNECTION WITH AN
INVESTIGATION OR PROCEEDING BEING CONDUCTED, SHALL BE PENALIZED WITH A
FINE OF NOT LESS THAN ONE HUNDRED THOUSAND PESOS (P100,000.00) UP TO FIVE
MILLION PESOS (P5,000,000.00).

REPRISAL OR DISCRIMINATION SHALL INCLUDE REMOVAL, DISCHARGE, DEMOTION,
SUSPENSION, THREATS, HARASSMENT, OR ANY FORM OF RETALIATION IN THE

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TERMS AND CONDITIONS OF EMPLOYMENT, AGENCY, OR ENGAGEMENT, AS THE
CASE MAY BE.

(G) FAILURE TO NOTIFY THE COMMISSION OF SALE, DISPOSITION, OR ANY OTHER
TRANSFER DURING ADJUDICATION. — A RESPONDENT THAT FAILS TO NOTIFY THE
‘COMMISSION OF ANY SALE, DONATION, DISPOSITION, OR ANY OTHER TRANSFER,
WHETHER ABSOLUTE OR OTHERWISE, MADE DURING ADJUDICATION, OF ITS
INTEREST IN BUSINESSES, SHAREHOLDINGS, BUSINESS UNITS, ASSETS, OR ANY
OTHER INTEREST RELATED TO MATTERS UNDER ADJUDICATION SHALL BE
PENALIZED WITH A FINE OF NOT LESS THAN ONE HUNDRED THOUSAND PESOS
(P100,000) UP TO FIVE MILLION PESOS (P5,000,000.00).

“Provided that the schedule of fines indicated in this section shall be increased by the
Commission every five (5) years to maintain their real value from the time it was set.

“SEC. 30. Criminal Penalties. - An entity that enters into any anti-competitive agreement as
covered by Chapter Ill, Section 14(a) and 14(b) under this Act shall, for each and every
violation, be penalized by imprisonment from two (2) to seven (7) years, and a fine of not less
than fifty million pesos (P50,000,000.00) but not more than two hundred fifty million pesos
(P250,000,000.00). The penalty of imprisonment shall be imposed upon the responsible
officers, and directors of the entity.

“When the entities involved are juridical persons, the penalty of imprisonment shall be imposed
on its officers, directors, or employees holding managerial positions, who are knowingly and
willfully responsible for such violation

“SECTION ___ LIABILITY OF FACILITATORS. — ANY PERSON THAT:

(A) HAS AIDED, ABETTED, OR PROCURED A PERSON TO CONTRAVENE A SECTION OF
THE PCA;

(B) HAS INDUCED A PERSON, WHETHER BY THREATS OR PROMISES OR OTHERWISE,
TO CONTRAVENE SUCH A SECTION;

(C) HAS BEEN IN ANY WAY, DIRECTLY OR INDIRECTLY, KNOWINGLY CONCERNED IN,
OR PARTY TO, THE CONTRAVENTION BY A PERSON OF SUCH SECTION; OR

(D) HAS CONSPIRED WITH OTHERS TO CONTRAVENE SUCH A SECTION
“SHALL BE LIABLE FOR VIOLATION OF THE SAID SECTION.”

Section 8.The following provisions of Chapter Vil, entitled “Enforcement” of R.A. No.
10667, shall be amended to read as follows and renumbered accordingly:
|

“Sec. 32. Relationship With Sector Regulators. — The Commission shall have original and
primary jurisdiction jin the enforcement OF THIS ACT and THE regulation of all competition-
related issues. _

“THE COMMISSION SHALL EXERCISE ORIGINAL AND EXCLUSIVE JURISDICTION OVER
THE ADJUDICATION OF ALL COMPETITION-RELATED CASES.

1


“The Commission shall still have jurisdiction if the issue involves both competition and
noncompetition issues, but the concerned sector regulator shall be consulted and afforded
reasonable opportunity to submit its own opinion and recommendation on the matter before the
Commission makes a decision on any case.

“Where appropriate, the Commission and the sector regulators shall work together to issue rules
and regulations to promote competition, protect consumers, and prevent abuse of market power
by dominant players within their respective sectors.

“Sec. 35. Leniency Program. — The Commission shall develop a Leniency Program to be
granted to any entity in the form of immunity from suit or reduction of any fine which would
otherwise be imposed on a participant in an anti-competitive agreement as provided in Section
14(a) and 14(b) of this Act in exchange for the voluntary disclosure of information regarding
such an agreement which satisfies specific criteria prior to or during the fact-finding or
preliminary inquiry stage of the case.

“Immunity from suit will be granted to an entity reporting illegal anti-competitive activity before a
fact-finding or preliminary inquiry has begun if the following conditions are met:

(a) At the time the entity comes forward, the Commission has not received information about the
activity from any other source;

(b) Upon the entity's discovery of illegal activity, it took prompt and effective action to terminate
its participation therein, UNDERTAKEN IN CONSULTATION AND WITH THE APPROVAL
OF THE COMMISSION;

(c) The entity reports the wrongdoing with candor and completeness and provides full,
continuing, and complete cooperation throughout the investigation; and

(4) The entity did not coerce another party to participate in the activity [and-clearly-was-not-the
“Even after the Commission has received information about the illegal activity after a fact-finding
or preliminary inquiry has commenced, the reporting entity will be granted leniency, provided
Preceding conditions (b) and (c) and the following additional requirements are complied with:

(1) The entity is the first to come forward and qualify for leniency;

(2) At the time the entity comes forward, the Commission does not have evidence against the
entity that is likely to result in a sustainable conviction; and

(3) The Commission determines that granting leniency would not be unfair to others.

“Such program shall include the immunity from any suit or charge of affected parties and third
Parties, exemption, waiver, or gradation of fines andlor penalties giving precedence to the entity
submitting such evidence,

“Nothing in this section shall preclude prosecution for entities that report to the Commission

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cy

42

false, misleading, or malicious information, data or documents damaging to the business or
integrity of the entities under inquiry as a violation of said section. An entity found to have
reported false, misleading or malicious information, data, or document may be penalized by a
fine not less than the penalty imposed in the section reported to have been violated by the entity
complained of.

“The DOJ-OFC may likewise grant leniency or immunity as provided in this section in the event
that there is already a preliminary investigation pending before it.”

Xxx

“Sec. 37. Non-Adversarial Remedies. — As an implementing and enforcement policy, the
Commission shall, under such rules and regulations it may prescribe, encourage voluntary
compliance with this Act and other competition laws by making available to the parties
concerned the following and other analogous non-adversarial administrative remedies, before
the institution of administrative, civil or criminal action:

(a) Binding Ruling. — Where no prior complaint or investigation has been initiated, any entity
that is in doubt as to whether a contemplated act, course of conduct, agreement, or decision,
is in compliance with, is exempt from, or is 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: Provided, That the ruling is for a
specified period, subject to extension as may be determined by the Commission, and based
‘on substantial evidence[,]

(b) Show Cause Order. — Upon preliminary findings motu proprio or on written complaint
under oath by an interested party that any entity is conducting its 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 entity or entities
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 entity or entities 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 its identified business conduct, or pay the administrative fine therein specified, or
readjust its business conduct or practices;

(©) Consent Order. — At any time prior to the conclusion by the Commission of its inquiry,
any entity under inquiry 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
@ consent order, specifying therein the terms and conditions of the proposed consent
order which shall include among others the following:

(1) Fhe nent_of_an—amount_within_the-range-of_finesprovided_for_under_this
AcPAYMENT OF DAMAGES TO ANY PRIVATE PARTY/PARTIES WHO MAY

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ous

HAVE SUFFERED INJURY;

(2) The required compliance report as well as an entity to submit regular compliance
reports;

(3) AN UNDERTAKING TO PAYAN AMOUNT WITHIN THE RANGE OF FINES
PROVIDED FOR UNDER THIS ACT[Rayment—ot—damages—te—any—private

partyiparties-who-may-have suffered injury}; and

(4) Other terms and conditions that the Commission deems appropriate and necessary
for the effective enforcement of this Act or other Competition Laws:

Provided, That a consent order shall not bar any inquiry for the same or similar acts if
continued or repeated;

PROVIDED, FURTHER, THAT THIS REMEDY iS NOT AVAILABLE TO ANY ENTITY
‘UNDER INQUIRY FOR VIOLATIONS OF SECTION 14 (A) AND (B) OF THIS ACT.

(d) xxx

(€) Inadmissibilty of Evidence in Criminal Proceedings. ~ The request for abinding ruling,

the proposal for consent order; the facts, data, and information

‘therein contained or subsequently supplied by the entity or entities concerned;

admissions, oral or written, made by them against their interest; all other documents bled

by them, including their evidence presented in the proceedings before the Commission;

and the judgment or order rendered thereon; shall not be admissible as evidence in any

criminal proceedings arising from the same act subject of the binding ruling, show cause

order or consent order against such entity or entities, their officers, employees, and
agents.

“See. 38. Contempt— The Commission may [summarily Jpunish for contemptfby imprisonment

$100,000.00} er-both_any-enty guilty of cucRIANY. OF THE FOLLOWING ACTS COMMITTED
AGAINST OR BEFORE THE COMMISSION OR AGENCY, OFFICER, OR PERSON VESTED
WITH AUTHORITY OR DEPUTIZED BY THE COMMISSION:

(A) MISCONDUCT THAT SERIOUSLY INTERRUPTS ANY HEARING, SESSION, OR
PROCEEDING.

(B) REFUSAL TO BE SWORN AS A WITNESS OR TO ANSWER QUESTIONS OR TO
FURNISH INFORMATION WHEN LAWFULLY REQUIRED TO DO SO, AT A HEARING,
PROCEEDING, SESSION, OR INVESTIGATION;

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20
2

22
23

24

(C) WILLFUL FAILURE OR REFUSAL, WITHOUT JUST CAUSE, TO COMPLY WITH A
‘SUMMONS OR SUBPOENA; AND

(0) FAILURE OR REFUSAL TO COMPLY WITH ANY ORDER, RULING OR DECISION OF
THE COMMISSION.

“CONTEMPT SHALL, AFTER DUE NOTICE AND HEARING, BE PUNISHED BY
imprisonment not exceeding thirty (30) days or by a fine not exceeding one hundred thousand
pesos (P100,000.00), or both:PROVIDED, THAT WHEN THE PERSON COMMITS ANY OF
THE ACTS UNDER (A) AND (B) IN THE PRESENCE OF THE COMMISSION, THE PERSON
SHALL BE PUNISHED SUMMARILY.

“WHEN THE CONTEMPT CONSISTS IN THE REFUSAL OR OMISSION TO DO AN ACT
WHICH IS YET IN THE POWER OF THE PERSON TO PERFORM, HE MAY BE
IMPRISONED BY ORDER OF THE COMMISSION UNTIL HE PERFORMS IT.

“Sec. 39. Appeals of the Decisions of the Commission. — Decisions of the Commission shall be
appealable to the Court of Appeals in accordance with [the]RULE 65 OF THE Rules of Court.
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. In the appeal,
the Commission shall be included as a party respondent to the case.”

Section 9.Sections 46 and 47 of Chapter VIII entitled “Other Provisions” of R.A. No.
10667 are hereby amended to read as:

“Sec. 46. Statute of Limitations. — Any action arising from a violation of any provision of this Act
shall be forever barred unless commenced within five (5) years from:

* For criminal actions, the time the violation is discovered by the offended party, the
authorities, of their agents;

+ For [adminietrative-and] civil actions, the time the cause of action accrues.

* For administrative actions, [the—time—the—cause—of—action—accrues]THE TIME THE
VIOLATION IS DISCOVERED BY THE COMMISSION.

“Sec. 47. Prohibition on the Issuance of Temporary Restraining Orders, Preliminary Injunctions
and Preliminary Mandatory Injunctions. — Except for the Court of Appeals and the Supreme
Court, no other court shall issue any temporary restraining order, preliminary injunction or
preliminary mandatory injunction against the Commission 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 bled by entities or those claiming
to have rights through such entities: [Provided—howeverThat--thie-prohibition-shall-net-apply

the public:]Provided, further, That, the applicant shall file a bond, in an amount to be fixed by the
Court, but in no case shall it exceed twenty percent (20%) of the imposable fines provided for
under Chapter VI, Section 29 of this Act: Provided, finally, That in the event that the court finally

decides that the applicant was not entitled to the relief applied for, the bond shall accrue in favor
of the Commission.

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RUN

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

Section 10. Sections 51 and 55 of Chapter IX entitled “Final Provisions” of R.A. No.
10667 are hereby amended to read as follows:

“Sec. 51. Appropriations and Use of Fees, Charges and Penalties. - The initial budgetary
requirements of the Commission of three hundred million pesos (P300,000,000.00) is hereby
appropriated.

A mission,
‘but_will_be—remitted_to-the-National_Treasury_and_shall_accrue-to-the-generalfunds.]THE
COMMISSION SHALL BE AUTHORIZED TO RETAIN 50% OF ALL FEES, FINES, AND
PENALTIES COLLECTED BY THE COMMISSION FOR THE PURPOSE OF CREATING THE
ANTITRUST FUND, WHICH SHALL BE USED TO DEVELOP AND UTILIZE A RESEARCH
AND INVESTIGATION FUND FOR PURPOSES OF ENFORCEMENT OPERATIONS,
INFORMANT’S BENEFITS OR PROTECTION, FUND STAFF DEVELOPMENT AND
SCHOLARSHIPS, REWARDS FOR REPORTING VIOLATIONS OF THE PCA, THE
ESTABLISHMENT OF A COMPLIANCE PROGRAM, RESEARCH AND DEVELOPMENT,
EDUCATION AND ADVOCACY, AND OTHER NECESSARY EXPENDITURES TO PROMOTE
FAIR MARKET COMPETITION AND THE OBJECTIVES OF THIS ACT. THE USE OF SUCH
ADDITIONAL AMOUNT SHALL BE SUBJECT TO THE AUDITING REQUIREMENTS,
STANDARDS, AND PROCEDURES UNDER EXISTING LAWS.

“Such funds necessary for the continuous and effective operation of the Commission shall be
included in the annual General Appropriations Act.

“Sec. 55. Repealing Clause. — The following laws, and all other laws, decrees, executive orders
and regulations, or part or parts thereof inconsistent with any provision of this Act, are hereby
repealed, amended or otherwise modified accordingly:

(a) ArticleS 185 AND 186 of Act No. 3815, otherwise known as the Revised Penal Code:
Provided, That violations of ArticleS 185 AND 186 of the Revised Penal Code committed
before the effectivity of this Act may continue to be prosecuted unless the same have been
barred by prescription, and subject to the procedure under Section 31 of this Act;

(b) 200

(©) Section 43 (K), (R), (S), (u) on Functions of the ERC and SECTION 45 of Republic Act No.
9136, entitled “An Act Ordaining Reforms in the Electric Power Industry, Amending for the
Purpose Certain Laws and for Other Purposes’, otherwise known as the “Electric Power
Industry Reform Act of 2001", insofar as the provision thereof ARE inconsistent with this
Act;

(d) xxx

(©) xx

(F) SECTION 5(3) OF REPUBLIC ACT NO. 7581, OTHERWISE KNOWN AS THE PRICE

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aue WON

wor

10
1
12

2B

ACT, AS AMENDED; AND

(G) SECTIONS 87 AND 91 OF REPUBLIC ACT NO. 8293, OTHERWISE KNOWN AS THE
INTELLECTUAL PROPERTY CODE OF THE PHILIPPINES.”

Section 11. Separability Clause. — Should any provision of this Act or any part hereof
be declared unconstitutional, the other provisions or parts not affected thereby shall
remain valid and effective.

Section 12. Repealing Clause. — All laws, presidential decrees, executive orders,
resolutions, rules and regulations or parts thereof which are inconsistent with the
provisions of this Act are hereby repealed, amended or modified accordingly.
Section 13. Effectivity Clause. — This Act shall take effect after fifteen (15) days
following its publication in the Official Gazette or in two (2) newspapers of general
circulation.

Approved,

7