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

16" Congress
First Regular Session

House Bill NoA S20

Introduced by Honorable Sergio A. F. Apostol

EXPLANATORY NOTE

This bill aims to regulate trade manipulations and other forms of activities which restrain
free market competition.

Section 19, Article XII of the 1987 Constitution provides that “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’. Furthermore, Section 22 of the same Article states
“Acts which circumvent or negate any of the provisions of this Article shall be considered
inimical to the national interest and subject to criminal and civil sanctions, as may be provided
bylaw”.

Indeed, various legislations have been passed in accordance with the above-quoted
Constitutional mandate. The increased deviousness and complexity of schemes in perpetuating
monopolies in the free market necessitates an equally sophisticated legislation that would
effectively address this concern. Protection against price manipulators is an effective way by
which the government can provide people better access to various goods and commodities in
the market. By providing an equal playing field in the business sector, consumers will have an
improved access to affordable and at the same time quality goods.

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

Second District, Leyte


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

16" Congress
First Regular Session

House silNo,_ 4920

Introduced by Honorable Sergio A. F. Apostol

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

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

CHAPTER |
GENERAL PROVISIONS

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

SECTION 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.


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

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

SECTION 4. Definition of Terms. ~ As used in this Act, the following terms shall be
defined as:

(a) “Agreements” shall refer to any type or form of arrangement, understanding,
undertaking or concerted action, whether formal or informal or tacit, written or oral;

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

(c) “Commission” shall mean the Philippine Fair Competition Commission created under
this Act;

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

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

(f) “Dominant Position” shall refer to a situation where a firm, either by itself or acting in
collusion with other firms, is in a position to control a relevant market for the sale of a


particular good or service by fixing its prices, excluding competitor firm, or controlling
the market in a specific geographical area;

(g) “Firms” shall include any person, natural or juridical, partnership, combination or
association in any form, whether incorporated or not, domestic or foreign, including
those owned or controlled by the government, engaged directly or indirectly in any
economic activity: Provided, That, two firms, one of which is controlled by the other,
shall be treated as one firm: Provided, further, That two or more firms that are
controlled by a single firm shall be treated as one firm;

(h) “Goods” and “Services”: “Goods” shall include 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, to another 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 for
commercial activity, which may be a city, province, region, the whole area of the
Philippines, or which may extend beyond the borders of the Republic of the Philippines,
where articles are bought or sold. It shall also refer to the geographical or economic
extent of commercial demand;

“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.

(i) “Mergers” shall be when 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 contro! 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 mean a privilege or undue advantage of one or more firms,
consisting in the exclusive right to carry on a particular business or trade, and/or
manufacture a particular product, article or object of trade, commerce or industry. It is a
form of market structure in which one or only a few firms dominate the total sales of a
product or service.


CHAPTER Il
PHILIPPINE FAIR COMPETITION COMMISSION

SECTION 5. Philippine Fair Competition Commission. - To implement the national
policy and attain the objectives and purposes of this Act, an independent Commission is hereby
created, which shall be known as the Philippine Fair Competition Commission (PFCC),
hereinafter referred to as the Commission, and which shall be organized within one hundred
eighty (180) days after the approval of this Act.

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

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

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

(c) Prohibition and Disqualifications. — The Commissioners shall not, during their tenure,
hold any other office of employment. They shall not, during their tenure, directly or
irectly 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.

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

(e) Quorum. - Three (3) members of the Commission shall constitute a quorum and the
affirmative vote of three members (3) shall be necessary for the adoption of any rule,
ruling, order, resolution, decision or other acts of the Commission en banc.

(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 offices outside of
Metro Manila as may be necessary for the effective discharge of its functions.

(g) Staff, - The Commission shall appoint, fix the compensation in accordance with the
Revised Compensation and Position Classification Law, determine the status,
qualifications and duties of an adequate staff, which shall include an Executive Director
of the Commission. The Executive Director shall be appointed by the President and shall
have relevant experience in any of the fields of law, economics, commerce,
management or finance for at least ten (10) years.

Provided, that, he shall be a Career Executive Service Officer (CES). The members of
the technical staff, except those performing purely clerical functions, shall possess at
least a Bachelor Degree in the following lines of specialization: economics, preferably in
industrial organization; law; finance; commerce; accounting; or management.

SECTION 6. Original and Exclusive Jurisdiction. ~ The Commission shall have original
and exclusive jurisdiction to enforce and implement the administrative provisions of this Act, its
implementing rules and regulations, and all other competition laws, and in particular:

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


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

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

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

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

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

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

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

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

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

(1) Binding Rules ~ To issue binding rulings;

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

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


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

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

(c) Other Powers of the Commission:

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

(2) Annual and Special Reports. - To require, by general or special orders, firms engaged
in trade, commerce, or industry to file with the Commission in such form as the
Commission may prescribe, annual or special reports, or answers in writing to specific
questions, furnishing the Commission such information as it may require as to the
organization, business, conduct, practices, management and relation to other persons of
the respective natural or juridical persons or entities filing such reports or answers in
writing except that the Commission shall not require, either by a specific order or by a
subpoena, the disclosure or production of trade secrets such as a secret formula,
pattern, device or compilation of information, including names of customers, which is
used in one’s business and which gives one an opportunity to obtain advantage over
competitors who do not know or use it. Trade secrets shall include a plan or process,
tool, mechanism, or compound known only to the owner and his employees to whom it
is necessary to confide it;

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

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


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

SECTION 7. Jurisdiction of Regional Trial Courts. ~ The Regional Trial Court shall have
jurisdiction over cases arising from violations of the provisions of this Act.

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

CHAPTER Il
PROHIBITED ACTS
SECTION 8. Anti-competitive Agreements. ~ It shall be unlawful for firms to engage in
horizontal and vertical agreements that prevent, distort or restrict competition, unless
otherwise exempted.

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

ii. “Vertical agreement” means an agreement entered into between two or more
enterprises, each of which operates, for the purposes of the agreement, at a different
level of the production or distribution chain, and relating to the conditions under which
the parties may purchase, sell or resell certain goods or services;

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

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


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

In determining whether there is price fixing or bid rigging, the following circumstances
may be considered:

(1) generally, any considered evidence that two sellers of similar goods have agreed to
set the price of their goods, to sell only a certain amount of their goods, or to sell only to
a limited number of buyers or consumers;

(2) a drastic change in prices of goods and services involving more than one seller of
similar goods of different brands, particularly if the changes in prices take place in equal
amount and about the same time;

(3) a seller refusing to sell based on an agreement with a competitor;

(4) the same firm has repeatedly been the low bidder who has been awarded contracts
for a certain service or a particular bidder seems to win bids on a fixed-rotation;

(5) there is an unusual and unexplainable difference between the winning bid and all
other bids; and

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

SECTION 9. Abuse of Dominant Position. — It 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 shalll be considered permissible price differentials:

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

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

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

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

(5) Price Differentials Due to Changing Market Conditions or Marketability of Goods ~
Price changes from time to time in response to changing conditions affecting the market
or the marketability of the goods concerned such as, but not limited to, actual or
imminent deterioration of perishable goods, obsolescence of seasonal goods, distress
sales under court process, or sale on good faith in discontinuance of business.

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

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


consignee, where the purpose and effect of such sale or lease or such condition is to
substantially lessen competition or to create a monopoly or cartel;

(h) Boycott ~ Any concerted refusal to sell or conspiracy not to sell or to stop 20 doing
business on the part of the suppliers of any goods, unless for a legitimate purpose.

SECTION 10. Anti-competitive Mergers ~ No firm engaged in commerce or trade shall
acquire, directly or indirectly, the whole or any part of the stock or other share capital, or the
whole or any part of the assets, of one or more firms engaged in any line of commerce or trade
where the effect of such acquisition of such stocks, share capital, or assets, or of the use of such
stock by voting or granting of proxies or otherwise maybe to substantially lessen competition,
or tend to create a monopoly.

{a) Permissible Stock or Asset Acquisition or Ownership. ~ Nothing contained herein,
however, shall be construed to prohibit:

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

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

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

(b) Notification Prior to Stock or Asset Acquisition. — No firm shall acquire, directly or
indirectly, the shares of stock or assets of any other firm, if as a result of the acquisition,
the acquiring firm would own twenty percent (20%) or more of the shares of stock or
assets of the acquired firm, unless, the acquiring and selling firm notify, prior to the
conclusion of the agreement for such acquisition and in the prescribed form, the
Commission of such proposed acquisition. Only the acquiring firm is required to make
the notification in a tender offer. The contemplated acquisition shall be deemed
approved, unless the Commission, within thirty (30) calendar days from receipt of the
notification, orders the acquiring firm to show cause why the proposed acquisition shall
not be declared as prohibited under this Act. The show cause order shall set forth the
facts upon which it is based. The acquiring or selling firm may contest the show cause
order, in which case, the proposed acquisition shall be considered enjoined until the
Commission shall have rendered a decision on the proposed acquisition after due notice
and hearing, within a further sixty (60) calendar days in accordance with the procedure
prescribed herein for the disposition of a show cause order. If the Commission fails to


make a decision within the prescribed 60 calendar day limit, the acquisition shall be
deemed approved and the parties may proceed to implement it.

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

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

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

(3) Acquisitions of voting securities of an issuer at least fifty percent (50%) of the voting
securities of which are owned by the acquiring firm prior to such acquisition;

(4) Transfers to, or from, government agencies or instrumentalities, including
government-owned or controlled corporations;

(5) Transactions exempted from the provisions of this Act and other proper and
applicable laws;

(6) Transactions which require the approval of a specialized agency which regulates the
particular industry;

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

(8) Acquisitions of voting securities pursuant to the preemptive rights of the acquiring
firm; or, if, as a result of such acquisition, the voting securities acquired do not increase,
directly or indirectly, the acquiring firm’s per centum share of outstanding voting
securities of the issuers; or

(9) Such other acquisitions, transfers, or transactions which the Commission may
declare as are not likely to violate the provisions of this Act or any other proper and
applicable law.

CHAPTER IV
FINES AND PENALTIES

SECTION 11. Administrative Penalties.
{a) 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 Ten Million Pesos


(Php10,000,000.00) and not exceeding Fifty Million Pesos (Php50,000,000.00) if a
natural person; by a fine of not less than Two Hundred Fifty Million Pesos
(Php250,000,000.00) but not exceeding Seven Hundred Fifty Million Pesos
(Php750,000,000.00) 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 fails or
neglects to comply with any term or condition of a binding ruling, a cease and desist
order or an order for readjustment issued by the Commission, shall pay a fine of not less
than Fifty Thousand Pesos (Php50,000.00) for each violation. Each violation shall be
deemed a separate offense: Provided, That in the case of a violation through a
continuing failure or neglect to comply, each day of continuance of such failure or
neglect shall be deemed a separate offense.

() 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.

SECTION 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 Ten Million
Pesos (Php10,000,000.00) and not exceeding Fifty Million Pesos (Php50,000,000.00) if a natural
person; by a fine of not less than Two Hundred Fifty Million Pesos (Php250,000,000.00) but not
exceeding Seven Hundred Fifty Million Pesos (Php750,000,000.00) 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 il, Articles 16, 17, 18 and 19 on criminal liability of principals, accomplices, and
accessories shall apply.


CHAPTER V
ENFORCEMENT

SECTION 13. Preliminary Inquiry. - The Commission shall motu proprio, 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.

SECTION 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.

SECTION 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 or experts. It shall determine
if any provision of this Act has been violated, enforce its orders and carry out its resolutions by
making use of any available means, provisional or otherwise, under existing laws and
procedures including the power to punish for contempt and to impose fines.

SECTION 16. Self-incrimination.- Pursuant to the preceding section, a person subject of
any preliminary inquiry or investigation by the Commission shall produce the specified
document or information when so required by written notice: Provided, That no person shall be
excused from disclosing any document or information to the inquiring officer on the ground
that the disclosure of the information or document may be incriminating: Provided, further,
That such document or information produced by the person subject of investigation shall not
be admissible as evidence against him in criminal proceedings: Provided, finally, That such
document or information shall be admissible in evidence in civil proceedings including those
arising from or in connection to the implementation of this Act. 23

SECTION 17. Privileged Communication Exclusion.- Nothing in the preceding section
shall compel the disclosure of privileged communication: Provided, That the person who
refuses to disclose the information or produce the document or other material required by the


inquiring officer in relation to the preliminary inquiry being conducted shall nevertheless be
obliged to give the name and address of the firm to whom, or by whom, or on whose behalf,
such privileged communication was made.

SECTION 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).

SECTION 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 under this Act shall
be immune from any suit or charge including from affected parties and third parties: Provided,
That the person or firm is not the most guilty. Provided, further, That any person or firm which
cooperates or furnishes information, document or data to the Commission in connection to an
investigation being conducted shall not be subjected to any form of reprisal or discrimination:
Provided, furthermore, That such reprisal or discrimination shall be considered a violation of
this Act and subjected to the penalties provided for under Section 11.

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.

SECTION 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
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 to 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


fee. 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.

SECTION 21. Nolo Contendere Resolution. — Any firm under inquiry under 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; 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, ten percent (10%) of the amounts paid under this section
shall equitably accrue to the Commission: Provided, further, That a nolo contendere resolution
shall not bar any inquiry for the same or similar acts if continued or repeated.

SECTION 22. Implementing Policy; Non-Adversarial Administrative 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
and non-adjudicatory administrative remedies, before the institution of administrative, civil
or criminal action:

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

(b) 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, or readjust its business conduct or practices;

(c) Proposal for Consent Judgment. — At any time prior to the issuance of a binding
ruling, the promulgation of a cease and desist judgment under a show cause order or
the promulgation of 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 fitting of a request for a binding ruling or the submission
of a proposal for consent judgment, the person of persons concerned may
communicate, in writing, with the Commission on matters that should be included or
excluded in such request or proposal, which the Commission may consider necessary for
the effective enforcement of this Act or other competition laws.

(e) Binding Ruling, Cease and Desist Order, and Consent Judgment. ~ Based upon the
facts, data, and information disclosed or supplied by the persons concerned, or
established by substantial evidence during the hearing, the Commission shall issue a
binding ruling, a cease and desist order or an approval of the proposal for a consent
judgment, as the case may be, with or without conditions, to the effect that the
particular act, course of conduct, agreement, decision or practice is in accord with this
Act or other competition laws, or is exempt therefrom, or is constitutive of a violation
thereof. If the Commission finds that there is substantial evidence tending to show that
the act, course of conduct, agreement, decision or practice of the person or persons
concerned is prohibited, it shall include in its decision an order requiring the person or
persons concerned:

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

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

(3) Readjustment of Business Methods. ~ To readjust, within a reasonable period therein
fixed, its method of doing business, including a corporate reorganization or divestment
in the manner and under the terms and conditions prescribed by the Commission, as it
may deem proper for the protection of the public interest,

(f) Suspension of Administrative, Civil or Criminal Proceedings. - No pending
administrative, civil or criminal proceedings or those filed thereafter, against any
person, corporation or any other juridical entity or its officers and employees, shall be
suspended, except upon order of the Commission on proper motion, on the ground of
the filing of a request for binding ruling, the issuance of a show cause order or the filing
of a proposal for a consent judgment based, in whole or in part, on the same set of facts
and issues as that of the proceedings sought to be suspended;

(g) Monitoring of Compliance. ~ The Commission shall monitor the compliance by the
person or persons concerned, their officers, and employees, with the final and
executory binding ruling, cease and desist order, or approval of a consent judgment.
Upon motion of an interested party, the Commission shall issue a certification to the


effect that the person or persons concerned have, or have not, as the case may be,
complied with a final and executory ruling, order, or approval;

(h) Inadmissibility in Evidence. The request for a binding ruling, the show cause order,
or the proposal for consent judgment; the facts, data, and information therein
contained or subsequently supplied by the person or persons concerned; admissions,
oral or written, made by them against their interest; all other documents filed by them
including their evidence presented in the proceedings before the Commission; and the
judgment rendered thereon, shall not be admissible as evidence in any administrative,
civil or criminal proceedings against such person or persons, their officers, employees,
and agents nor constitute a basis for the introduction of the binding ruling, the cease
and desist order, or the consent judgment as prima facie evidence against such persons
in any such action of proceeding;

(i) Modification or Reversal of Ruling, Order or Approval. ~ The 30 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 changed 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,
including an order to readjust their method of doing business; or

(3) When the ruling, order, or approval was based on deliberately falsified material fact,
data, or information supplied by an interested party benefited by such ruling, order, 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.

SECTION 23, Standards. - In the exercise of its powers or in the discharge of its duties

under this act, the Commission shall consider:

(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) whether or not the particular market conduct has an appreciable impact on market
conditions;

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

(f) 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;

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

(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;

{o) 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 accelerated industrialization; and

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


SECTION 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 summons,
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.

SECTION 25. Decisions 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.

SECTION 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:

(a) is arbitrary to constitutional rights, power, privilege, or immunity;
(b) is contrary to constitutional rights, power, privilege, or immunity;

(0) isin excess of statutory jurisdiction, authority, or limitations, or is contrary to law;
(d) is without observance of the procedure required by law; and

(e) 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.

SECTION 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.

SECTION 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, rule or regulation.

SECTION 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.

SECTION 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.

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 the 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 he was unaware of the violation, unless, he shall have
established to the satisfaction of the court that even with the exercise of due diligence and
proper supervision, he could not have avoided or prevented the violation.

‘Any agreement between an officer, partner or any other officer and a corporation or
partnership whereby the latter directly or indirectly agrees to assume, satisfy or indemnify, in
whole 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.

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

SECTION 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.

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

SECTION 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 against such defendant under this Act as to all matters respecting which said
judgment would be an estoppel as between the parties concerned.

SECTION 35. Distribution of Damages Recovered. - The damages recovered in a civil
action under Section 20 of this Act shall be distributed in the following manner: (1) as
determined and to be authorized by the Court having jurisdiction of the case; (2) ten percent
(10%) of the total amount of damages shall accrue to the Commission and/or regulatory agency
to be used exclusively in the enforcement of this Act; and, (3) the remainder of which total
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 person having an interest a reasonable opportunity to secure his appropriate
portion of the net damages obtained.

SECTION 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.

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

SECTION 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 plaintiff's 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.

SECTION 39. Prohibition on the Issuance of Temporary Restraining Orders, Preliminary
Injunctions and Preliminary Mandatory Injunctions. — Except for the Supreme Court, no other
court shall issue any temporary restraining order, preliminary injunction or preliminary
mandatory injunction against the regulatory agency in the exercise of its duties or functions:
Provided, That, this prohibition shall apply in all cases, disputes or controversies instituted by a
private party, including, but not limited to, cases filed by regulated firms or those claiming to
have rights through such firms: Provided, however, That, this prohibition shall not apply when
the matter is of extreme urgency involving a constitutional issue, such that the non-issuance of
a temporary restraining order will result in grave injustice and irreparable injury to the public:
Provided, further, That, the applicant shall file a bond, in an amount to be fixed by the Court,
but in no case shall it be less than half of the imposable fines provided for under Section 11 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 regulatory agency.

‘Any temporary restraining order, preliminary injunction or preliminary mandatory
injunction issued in violation of this section is void and of no force and effect. Any judge 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.

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


SECTION 40. 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.

SECTION 41. 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.

SECTION 42. 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
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

SECTION 43. 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.


SECTION 44, 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. Provided, That all moneys recovered or charges or
composition sums collected under this Act, other than financial penalties, shall be paid into and
form part of the moneys of the Commission.

SECTION 45. 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:

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 alternat:

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 purposes
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
representative;

ili, 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.


SECTION 46. Separability Clause. ~ If 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.

SECTION 47. Suppletory Application. — For purposes of this Act, the Revised Penal Code,
as amended, and other applicable laws shall be applied in a suppletory character.

SECTION 48. 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. 7581 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 or 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.

SECTION 49, 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,