1
SIXTEENTH CONGRESS ) a
REPUBLIC OF THE PHILIPPINES )

FIRST REGULAR SESSION )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

388

House Bill No.,
EXPLANATORY NOTE

This bill originally filed in the Fifteenth Congress by the undersigned
Rufus B. Rodriguez as House Bill No. 1980. It was consolidated into House Bill
No. 4835 and approved by the Committee on Trade and Industry. It was
subsequently approved on Second Reading but was reconsidered and remained
un-acted upon

This bill seeks to penalize monopolies and unfair competition and
establish the Fair Trade Commission, defining its powers and functions.

The 1987 Constitution expressly provides that the State shall regulate or
prohibit monopolies when the public interest so requires. It also stipulates that no
combinations in restraint of trade or unfair competition shall be allowed
However, despite the constitutional guarantees and the existence of laws that
affect competition, such laws are inadequate. The economy continues to be
dominated by groups of businesses with substantial market power and political
influence. Also, competition in the domestic market remains restricted in key
sectors.

The lack of genuine competition in certain industries impairs public
welfare and undermines the country's credibility to provide a business climate
conductive to investment

The proposed bill aims to encourage fair and free economic competition
by prohibiting the abuse of market-dominant positions and the excessive

‘ay

A
G



concentration of economic power by regulating improper concerted acts and
unfair business practices, thereby stimulating creative business activities,
Protecting consumers and promoting the balanced development of the national
economy. Among the key features of the bill are the creation of a Fair Trade
Commission that shall investigate, gather evidence and initiate prosecution of
those engaged in unfair trade practices, the description of monopoly and cartels
ad the imposition of defined sanctions and penalties for violation of the fair
competition.

With this bill, it is believed that unfair competitions, monopolies and
cartels shall be properly regulated if not totally eradicated which will ultimately
protect the consumers from abuses of market powers.

In view of the foregoing, approval of this bill is highly and earnestly

recommended

RuF ss B. ROI EZ

wane llasee JR.


SIXTEENTH CONGRESS
REPUBLIC OF THE PHILIPPINES )
FIRST REGULAR SESSION )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B, Rodriguez and
Representative Maximo B, Rodriguez, Jr.

House Bill No. 388

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 House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Title. — This Act shall be known and cited as the “Philippine Fair
Competition Act of 2013."

SEC. 2. Declaration of Policy. - Pursuant to the constitutional mandate that the
State shall regulate or prohibit monopolies when the public interest so requires
and that no combinations in restraint of trade or unfair competition shall be
allowed, the State shall:
(a) promote and enhance economic efficiency and free, full and fair
competition in trade, industry and all commercial economic activities;
(b) prevent the concentration of economic power in a few persons who
threaten to control the production, trade, or industry in order to stifle
competition, distort, manipulate or constrict the discipline of free
markets, increase market prices in the Philippines; and
(©) penalize all forms of anti-competitive agreements, abuse of dominant
position, and anti-competitive mergers, with the objective of protecting
consumer welfare and advancing domestic and international trade and
economic development.

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

The Act shall apply to: (a) alll 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.

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

(a) “Agreement” 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 refer to 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 a 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 interests 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 refer to the Philippine Fair Competition
Commission created under this Act;

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

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

(h) "Goods" and “Services”; “Goods” shall refer to all types of tangible and
intangible property that could be bought and sold, and the possession
of which could be transferred in whole or in part, temporarily or
permanently;

“Services” shall refer to the provision of things of value or articles or
items that could be used by one person, whether natural or juridical
through human interaction or through the use, without transfer of
ownership, of the facilities of the provider by the client, or a
combination of both. It shall include all non-tangible goods. It is the


non-material equivalent of a good, consumed at the point of sale and
does not result in ownership;

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

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

() “Mergers” shall refer to two or more undertakings, previously
independent of one another, join together. This definition includes
transactions whereby two firms legally merge into one (mergers), one
firm takes sole control of the whole or part of another (acquisitions or
takeovers), two or more firms acquire joint control over another firm
(joint ventures) and other transaction, whereby one or more
undertakings acquire control over one or more undertakings, such as
interlocking directorates; and

(k) "Monopoly" shall refer to a privilege or undue advantage of one or
more firms, consisting in the exclusive right to carry on a particular
business or trade, and/or manufacture a particular product, article or
object of trade, commerce or industry. It is a form of market structure in
which one or only a few firms dominate the total sales of a product or
service.

()) “Subsidiary” shall refer to a corporation more than fifty percent (50%)
of the voting stock of which is owned or controlled, directly or indirectly,
through one or more intermediaries, by another corporation, which
thereby becomes its parent corporation.

Chapter Il
PHILIPPINE FAIR COMPETITION COMMISSION

SEC. 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, to be known as the Philippine Fair Competition
Commission (PFCC), which shall hereinafter be referred to as the Commission,
and 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


(b)

(o)

(@)

(e)

recognized competence in the field of economics preferably in
industrial organization economics, or finance, commerce, accounting, or
Management. They must have actively practiced their professions for
at least ten (10) years, but must not have been candidates for any
elective national or local office in the immediately preceeding
elections, whether regular or special.

Term of Office. - The Chairperson and the Associate Commissioners
shall be appointed by the President of the Philippines. The term of
office of the Chairperson and the Associate Commissioners shall be six
(6) years without reappointment. The Chairperson shall hold office for
six years and of the first four (4) Associate Commissioners, two (2)
shall hold office for a term of four (4) years and two (2) for a term of two
(2) 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,

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

No spouse or relative by consanguinity or affinity within the fourth civil
degree and no former law, business, or professional partner or
associate of any of the Commissioners, the Chairperson and the
Secretary of the Commission may appear as Counsel or agent on any
matter pending before the Commission or transact business directly or
indirectly therein during his/her incumbency and within one (1) year
from his/her cessation of office.

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.

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

Principal Office, Branch and Venue. - The Commission shall hold its
principal office in Metro Manila but it may conduct hearings outside of
Metro Manila upon prior notice for inquiries, studies or any other
Proceedings required for the proper and efficient exercise of its power


and the discharge of its duties. It may establish branch office outside
of Metro Manila as may be necessary for the effective discharge of its
functions.

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

SEC. 6. Original and Exclusive Jurisdiction, Powers and Functions — The
Commission shall have the original and exclusive Jurisdiction to enforce and
implement the administrative provisions of this Act, its implementing rules and
regulations, and all other compensation 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 actio

(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;

(6) 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, and if he has



none, the Commission shall appoint a de officio counsel for him;
and of his right to avail of the privilege of immunity from
prosecution 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 and Functions 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 performances 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 costumers, 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 seem advisable.

Sec. 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 the 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 III
PROHIBITED ACTS

SEC. 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;
ji, “Vertical Agreement’ means an agreement entered into between two
or more enterprises, each of which operates, for the purposes of the
agreement, at different levels 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 complimentary 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,


10

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 of cartel
or lessening competition.

(b) Bid Rigging - Any agreement to fix prices 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 agrees 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 reason to explain the difference.

SEC. 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;


ct

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

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

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

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

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

(5) Price Differentials Due to Changing Market Conditions or Marketability of
Goods — Price changes from time to time in response to changing
conditions affecting the market or the marketability of the goods 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 when a business is going to be
discontinued,

(f) Exclusivity Arrangement — Any arrangement 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 or merchandising agreements;

(9) Tie-In Arrangements — Any agreement making the supply of particular
goods dependent upon the purchase or lease of other goods from the
supplier or his consignee, where the purpose and effect of such sale or
lease or such condition is to substantially lessen competition or to create a
monopoly or cartel;

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

() Applicability of the Prohibited Acts to Non-dominant Persons or Firms ~ It
shall be unlawful for person or firms who may not be holding a dominant
Position to commit the same acts specified in this section.

SEC. 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


12

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 stocks 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
Tequired to make the notification in a tender offer. The contemplated
acquisition shall be deemed approved, unless the Commission, within
thirty (30) calendar days from receipt of the notification, orders the
acquiring firm to show cause why the proposed acquisition shall not be
declared as prohibited under this Act, The show cause order shall set
forth the facts upon which it is based. The acquiring or selling firm may
contest the show cause order, in which case, the proposed acquisition
shall be considered enjoined until the Commission shall have rendered
a decision on the proposed acquisition after due notice and hearing,
within further sixty (60) calendar days in accordance with the
procedure prescribed herein for the disposition of a show cause order.
If the Commission fails to make a decision within the prescribed 60
calendar day limit, the acquisition shall be deemed approved and the
parties may proceed to implement it.

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

(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) Acquisition 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;



13

(5) Transactions exempted from the provision 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 not likely to violate the provisions
of this Act or any other proper and applicable law.

CHAPTER IV
FINES AND PENALTIES

SEC. 11. Administrative Penalties

(a) Without prejudice to the violation of other laws, any firm that shall be
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 unjustifiably fails or neglects to comply with any term or condition of
a binding ruling, or a cease and desist order issued by the Commission, shall pay
a fine of not less than Fifty thousand pesos (Php50,000.000 for each violation.
Each violation shall be deemed a separate offense. In the case of continued non-
compliance, the legal interest (herein fixed at 6% per annum) shall be levied on
the fine imposed until the orders are complied with

(c) Supply of Incorrect or Misleading Information. — The
Commission may likewise impose upon persons or entities fines of not less than
Five thousand pesos (Php 5,000.00) to not more than One hundred thousand
pesos (Php 100,000.00) 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.


14

SEC. 12. Criminal Penalties. — Without prejudice to the violation of other laws,
any firm that shall be found to have violated Sections 8, 9, and 10 of this Act, or
any combination thereof, shall, for each and every violation, be punished by a
fine of not less than 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 II, Articles 16, 17, 18, and 19 on criminal liability of
principals, accomplices, and accessories shall apply.

CHAPTER V
ENFORCEMENT

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

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

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

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

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

SEC.16.Self-Incrimination. - Pursuant to the preceding section, a person who
is the subject of any preliminary inquiry or investigation by the Commission shall


15

produce the specified document or information when so required by written
Notice subject only to the limitations provided for in Article Ill, Section 17 of the
1987 Philippine Constitution,

SEC. 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.

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

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

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

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

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


16

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

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

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

SEC. 22. Implementing Policy; Non-Adversarial Administrative Remedies.
~ As an implementing and enforcement policy, the Commission shall, under such
rules and 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:

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

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

(c), Proposal for Consent Judgment - At any time prior to the issuance of
a binding ruling, the promulgation of cease and desist judgment
under a show cause order or the promulgation of a decision of
judgment in any administrative, civil, or criminal case, the person or
Persons, whose business conduct is under inquiry in the particular


7

proceedings may, without in any manner admitting a violation of this

‘Act or any other competition laws, submit to the Commission a written

proposal for the entry of a consent judgment, specifying therein the

terms and conditions of the proposed consent judgment.

(d) Consultations - Prior to the filing of a request for a binding ruling or
the submission of a proposal for consent judgment, the person or
persons concerned may communicate, in writing, with the Commission
on matters that should be included or excluded in such request or
proposal, which the Commission may consider necessary for the
effective enforcement of this Act or other competition laws.

(e) Binding Ruling, Cease and Desist Order, and Consent Judgment. -
Based upon the facts, data, and information disclosed or supplied by
the persons concerned, or established by substantial evidence during
the hearing, the Commission shall issue a binding ruling, a cease and
desist order 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 thereform,
or constitutes a violation thereof. If the Commission finds that there is
substantial evidence tending to show that the act, course of conduct,
agreement, decision or practice of the person or persons concerned is
prohibited, it shall include in its decision the appropriate order requiring
the person or persons concerned to perform certain acts:

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

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

() Monitoring of Compliance. - The Commission shall monitor the
compliance by the person or persons concerned, their officers, and
employees, with the final and executory binding ruling, cease and
desist order, or approval of a consent judgment. Upon motion of an
interested party, the Commission shall issue a certification to the effect
that the person or persons concerned have, or have not, as the case
may be, complied with a final and executory ruling, order, or approval;

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

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


18

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

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

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

(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 reversai thereof, except, that the party who is guilty of
Unjustified failure or refusal to comply as specified in paragraph (2) hereof,
or have deliberately supplied such falsified material fact, data or
information as specified in paragraph (3) above, is barred from claiming
any vested right therein,

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

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

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

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

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

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

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

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

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

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

() 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;

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

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


19

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

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

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

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

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

SEC. 26. Appeal to the Court of Appeals. - Any party who has actively
participated in the proceedings before the Commission and is adversely affected
by a binding ruling, order, or resolution, decision, judgment, rule or regulation
promulgation after notice and hearing by the Commission sitting en banc, may
appeal, by means of a notice of appeal and a verified petition for review served
upon the Commission and other parties who actively participated in the
proceedings, to the Court of Appeals within thirty (30) days from receipt thereof,
‘on the ground that the appealed action of the Commission:
i. is arbitrary to constitutional rights, power, privilege, or immunity;
is contrary to the constitutional rights, power, privilege, or immunity;
ili, is in excess of statutory jurisdiction, authority, or limitations, or is
contrary to law;
iv. is without observance of the procedure required by law; and
v._ is not supported by substantial evidence.
The Commission shall be included as a party respondent to the case and
shall be represented by its own legal staff.

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

SEC. 28. Reception of Additional Evidence. - Any party in the appellate
proceedings may apply for leave to the Court of Appeals or the Supreme Court,
to adduce additional evidence before the Commission. The Court may, under
such terms and conditions as it may prescribe, order the Commission to receive
such additional evidence upon showing that it is material and there are
reasonable grounds for the failure to present said evidence in the proceedings
before the Commission. The Commission, sitting en banc, may modify its findings


20

as to the facts, or make new findings, by reason of the additional evidence taken,
and it shall file with the appellate court such modified or new findings and its
recommendations for the affirmation, modification, or setting aside of the
appealed binding ruling, order, resolution, decision, judgment, rules or regulation

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

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

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

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

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

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

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

SEC. 33. Private Action - Regardless of the status or pendency of any
proceedings, any firm that suffers injury by reason of any violation of this Act may
institute a separate and independent civil action, irrespective of the amount
involved in the controversy against the defendant or defendants and shall recover
treble damages sustained, the costs of suit and reasonable attorney's fees:


21

Provided, however, That no filing fees shall be collected: Provided, further, That
the filing fees shall constitute a first lien in the award of damages

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

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

SEC. 36. Distribution of Damages Recovered. - The damages _recovered in
a civil action under Section 20 if this Act shall be distributed in the following
manner: (1) as determined and to be authorized by the Court having jurisdiction
of the case; and, (2) the remainder of which total amount of damages shall be
deemed a civil penalty by the Court and shall be deposited to the National
Treasury as part of the general fund of the government: Provided, That any
distribution procedure adopted by the Court shall give preference to individual
consumers and afford each interested person a reasonable opportunity to secure
his appropriate portion of the net damages obtained.

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

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

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

CHAPTER VI
OTHER PROVISIONS

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


22

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 plaintif is
too speculative to prove, the cause of action does not accrue until the damage
becomes probable; Provided, however, That if the plaintif'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.

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

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

SEC, 41. Congressional Oversight Committee. - To oversee the
implementation of this Act, there shall be created a Congressional Oversight
Committee on Fair Competition (COCFC) to be composed of the Chairpersons of
the Senate Committees on Trade and Commerce, Economic Affairs, and
Finance; the Chairpersons of the House of Representatives Committees on
Trade and Industry, Economic Affairs and Appropriations; and two members each
from the Senate and the House of Representatives who shall be designated by
the Senate President and the Speaker of the House of Representatives;
Provided, That one of the two Senators and one of the two House Members shall
be nominated by the respective Minority Leaders of the Senate and the House of
Representatives. The Congressional Oversight Committee shall be jointly chaired
by the Chairpersons of the Senate Committee on Trade and Commerce and the
House of Representatives Committee on Trade and Industry. The Vice-Chair of
the Congressional Oversight Committee shall be jointly held by the Chairpersons
of the Senate Committee on Economic Affairs and the House of Representatives
Committee on Economic Affairs.

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

CHAPTER VII
FINAL PROVISIONS

SEC. 42. Implementing Rules and Regulations. - The Commission _shall
prepare the necessary rules and regulations within one hundred twenty (120)
days from the effectivity of this Act: Provided, That, where the same would apply
to an industry or a sub-sector of industry that is subject to the jurisdiction of a
regulatory agency, the Commission shall, in preparing the guidelines, consult,


23

with the concerned regulatory agency and stakeholders: Provided, further, That
the Commission may revise such guidelines as it deems necessary: Provided,
however, That such revised guidelines shall only take effect following its
Publication in two newspapers of general circulation.

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

SEC. 44. Transitory Provision. - For the purpose of ensuring that the
Commission is organized within the mandated period of one hundred eighty (180)
days after the approval of this Act, an Inter-Agency Task Force shall be created
and composed of the following agencies:
a.) Agencies which will provide administrative support to the Commission:
i. Office of the President, to be represented by the Executive
Secretary with the Deputy Executive Secretary for Legal Affairs as
alternate;
ii, Department of Budget and Management, to be represented by the
Secretary with the Undersecretary in charge of organization of new
offices and position classifications as alternate;
b.) Agencies which currently perform functions germane or are related to
the purposed of the Commission:
i. Tariff Commission, to be represented by the Chairperson and with
an Associate Commissioner permanently designated as alternate;
ii. Department of Trade and Industry, to be represented by the
Secretary with the Director of the Bureau of Trade Regulation and
Consumer Protection as alternate representative;
iii, Department of Justice, to be represented by the Secretary with an
officer holding at least an Assistant Secretary rank as alternate.
The Task Force shall also meet in Executive Session with all the agency
heads to deliberate on possible appointees for the position of Chairperson and
Associate Commissioners of the Commission for submission to and consideration
of the President of the Philippines.
The Task Force shall also commence the coordinated advocacy for this
Act within ninety (90) days from the effectivity thereof. It shall also implement a
broad-based consultation on inputs for the Implementing Rules and Regulations
of this Act which must be completed within one hundred twenty (120) days from
the effectivity of this Act. The report on the consultations shall be submitted to the
Commission within fifteen (15) days from its establishment a copy of which will be
furnished to the Congressional Oversight Committee on Fair Competition

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

SEC. 46. Separability Clause. - 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


24

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

SEC. 47. Repealing Clause. - The following laws, insofar as they are
inconsistent with any of the provisions of this Act, are hereby repealed, amended
or otherwise modified accordingly
(a) Sec. 5(3) of Republic Act No. 7851 or the Price Act;
(b) Sec. 5(f) of Republic Act No. 7925 or The Public Telecommunications
Policy Act;
(c) Sec. 11(a) and (b) of Republic Act No. 8479 od the Downstream Oil
Industry Deregulation Act;
(d) S3c. 45 of Republic Act No. 9136 or The Electric Power Industry Reform
Act;
(e) Sec. 13 of Repubiic Act No. 9295 or The Domestic Shipping Development
Act;
(f) Sec. 24 and 25 of Republic Act No. 9502 or The Universally-Accessible
Cheaper and Quality Medicines Act.
Provided, That in case of conflict between this Act and such provisions of
existing competition laws and regulations, the provisions of this Act shall prevail.

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

Approved,