Republic of the Philippines
House of Representatives
Quezon City

SIXTEENTH CONGRESS
First Regular Session .

4446

HOUSE BILL NO.

Introduced by Representative Giorgidi B. Aggabao

Explanatory Note

We have enacted many laws relating to competition and anti-trust. Even the 1987
Constitution expressly prohibits monopolies and restraint of trade. Yet to this date, we
continue to lag behind our neighbouring Asean countries , not only in terms of
protection of our consumers and affording them access to the best products and services
available at reasonable cost, but likewise in levelling the playing field for investors

‘The answer appears to lie in the lack of a comprehensive competition or anti-
trust law, which incidentally is part of the country’s commitment to the economic
integration of ASEAN (Association of South East Asian Nations) in 2015.

One recent newspaper editorial has quoted a paper submitted to the 2014 Global
Competition Review (reputed to be the world’s leading anti-trust and competition law
journal ) which pointed out that the Philippines legal framework for a competition law
thas not been fully compliant with the ASEAN guidelines. The law journal said,
“Throughout the year, the Philippines has enacted fragmented legal provisions
(usually part of general statutes) and sector-specific issuances prohibiting certain anti-
competitive acts. The Philippines has yet to promulgate a comprehensive anti-trust
statute to fully cover the anti-competitive acts mentioned in the guidelines.”


Even the Philippine Chamber of Commerce and Industry (PCCI), the country’s
biggest business organization, has grim prospects if Congress once more fails to enact a
competition law. “If we give our neighbours a difficult time to do business here, (due to
the absence of a competition law), they will also give us a hard time accessing the
ASEAN market of 600 million consumers,” PCCI President Alfredo M. Yao pointed out.

This bill aims to address this situation by removing restrictions in the entry of
competitors that offer more efficient processes and lower costs. In the end, competition
promotes excellence which translates to better and reasonable cost of quality goods and
services that will redound to the benefit of our consumers.

Approval of this bill is earnestly urged.

GIORGIDI B. AVGABAO


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRE!
First Regular Session

4446

HOUSE BILL NO. _

Introduced by Representative Giorgidi B. Aggabao

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

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

CHAPTER I
GENERAL PROVISIONS

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

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

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

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

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



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

The Act shall apply to: (a) all firms as defined hereunder and all their commercial
agreements, actions or transactions involving goods, services or intellectual property;
and, (b) 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) “Agreements” shall refer to any type or form of arrangement, understanding,
undertaking or conceded 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 oblain 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 the power to ect or cause the direction of
management policies of a person by contract, agency or otherwise;

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 ina 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 properly 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.

j) 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 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 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 IT
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, 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 com posed 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 indirectly, practice any profession, participate in any business or be
financially interested in any contract with, ot any franchise, or special privileges
granted by the government or any subdivision, agency, or instrumentality thereof,
Including government-owned and controlled corporations or their subsidiaries. They
shall strictly avoid conflict of interest in the conduct of their office. 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 o 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.

(4) Principal Office, Branch and Venue. - The Commission shalt 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 (CESO). 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,

SEC. 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
Actand 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
ad ministrative action;

(2) Administrative Action. - To attest and file all complaints for appropriate
ad ministrative 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 properly 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
ecrets 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;

iii, 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 snow 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

(©) 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 of 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

6


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.

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 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

SEC. 8. Anti-competitive Conduct - It shall be unlawful for firms to engage in anti-
competitive conduct that prevent, distort or restrict competition unless otherwise
exempted.

There shall be a prima facie case for the existence of an anti-competitive conduct 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 conduct 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 toa 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 conduct 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 =

D) 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 toa limited number of buyers or consumers;

2) a drastic change in prices of goods and services involving more than
one seller or similar goods of different brands, particularly it the changes
in prices take place in equal amountand 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.

SEC. 9. Abuse of Dominant Position. - It shell 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

8


competition. Abusive conduct 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 conduct, 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 conduct to limit or control production,
markets, technical development, or investment with the purpose and effect of
creating a monopoly or cartel, or lessening com petition;

©) Market Allocation - Any conduct 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 conduct to share
markets or sources of supply of raw materials, with the purpose and effect of
creating a monopoly or cartel, or lessening com petition;

©) Price Discrimination - Any conduct 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 per sible 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

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

9


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 conduct 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, 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 conduct 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 or any goods, unless for a legitimate
purpose.

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 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.

10


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 have the power to direct or cause the
direction of management policies 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 setting 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;
}) 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 pre-emptive 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
firms per centum share of outstanding voting securities of the issuers; or

uw


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

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 ovary violation, be punished by a fine of not Jess than Ten Million Pesos
(Php 10,000,000) and not exceeding Fifty Million Pesos (Php 50,000,000) if a natural
person; by a fine of not less than Two Hundred Fifty Million Pesos (Php 250,000,000)
but not exceeding Seven Hundred Fifty Million Pesos (Php 750,000,000) 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 (Php 50,000) 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)
to not more than One Hundred Thousand Pesos (Php 1,000) where, intentionally or
negligently, they supply incorrect or misleading information in any document
application or other paper filed with or submitted to the Commission or supply
incorrect ‘or misleading information in an application or other paper filed with or
submitted to the Commission or supply incorrect or misleading information in an
application for a binding ruling, a proposal for a consent judgment, proceedings
relating to a show cause order, or application for modification of the Commission’s
ruling, order or approval, as the case may be.

SEC. 12. Criminal Penalties - Without prejudice to the violation of other laws, any firm
that shall be found to have violated Sections 8,9 and 10 of this Act, or any combination
thereof, shall, for each and every violation, be punished by a fime of not less than Ten
Million Pesos (Php 10,000,000) and not exceeding Fifty Million Pesos (Php
50,000,000) if a natural person, by a fine of not less than Two Hundred Fifty Million
Pesos (Php 250,000,000) but not exceeding Seven Hundred Fifty Million Pesos (Php
750,000,000) if a firm, and by imprisonment not exceeding ten (10) years, or both at the

12


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

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

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 he 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 firm’s 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 or experts. It shall
determine it 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, is person subject of any
preliminary inquiry or investigation of the Commission snail 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 to
investigation shall not be admissible as evidence against him in criminal proceedings:
Provided, finally, That such document or information shall he admissible in evidence in

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civil proceedings including those arising from or in Connection to the implementation
of this Act,

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 snail
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 not 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 he imposed a fine of not less than One
Hundred Thousand Pesos (Php. 100,000) but not more than Five Hundred Thousand
Pesos (Php. 500,000).

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 materiel evidence as determined by the under this Act shalt be
immune from any suit or charge Including from effected 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 1 1.

Nothing in this section shall preclude prosecution for persons and firms who
reported to the Commission with mal us 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, shell 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 contendre resolution; ot issuing a resolution to, singly or cumulatively
(a) impose penalties in the range provided under Section II hereof; b) order the

14


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 hurry
sustained by such persons by reason of any violation of this Act, plus the cost of suit
and reasonable attorneys fee.

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

SEC. 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 furthrer, 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 nor-adversarial and non- adjudicatory administrative remedies before the
institution of ad ministrative, civil or criminal action:

a) Request for Binding Railing. - 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 he in the interest of the public the Commission shall issue and serve upon
such person or persons a written description of ils 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 shell issue requiring such person or persons lo
cease and desist from continuing with ties identified business conduct, or pay the
administrative fine therein specified, or resdiust its business conduct or practices;

15


©) Proposal for Consent Judgment - Atany 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 s 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
completion 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 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
tor 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 Commission, 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 dec 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
persona concerne

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 judicial entity or its officers and employees, shall be
suspended, except upon order of the Court on proper motion, on the ground of the
filing of a request for binding ruling, the issuance of a show Cause order or the tiling of
a proposal for a consent judgment based in whole or in part, on the Same set of facts
end issues as that of the proceedings sought to he 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.

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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 Evidence - The request for a binding ruling, the show cause order
or the proposal tor 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 judgement as prima facie evidence against such persons
in any such action of proceeding;

i) Modification or Reversal of Ruling, Order or Approval ~The Commission may molt
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 lavy have so changed as to require

Such action;

(2) When the concerned person or persons fail or refuse, vvithout iustifiable

cause therefore, to comply with any condition attached to such ruling, order, ot

approval, including an order to readiust their method of doing business; or

(3) When the ruling, Order Ol' approval was based on deliberately falsifted

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 shalt 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.

EC, 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 e 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;

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

17



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 e 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 ona 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 or 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 ind ustrialization; and
1) the extent to which less restrictive practices are available.

SEC. 24. Contempt. - The Commission or any of its Divisions may summarily punish
for contempt by imprisonment not exceeding, thirty (30) days or by fine, or both, any
person guilty of such misconduct in the presence of the Commission or any of its
Divisions in its vicinity as to seriously interrupt any hearing, session or any proceedings
before it. including cases in which a person willfully fails or refuses, without just cause,
to comply with a 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.

SEC. 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 shail
direct otherwise upon such terms and conditions it may deem just.

SEC. 26. Appear 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 bans, may appeal, by means of a notice of

18


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;

©) is in 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.

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 Count may, under such terms and
conditions as it may prescribe, order the Commission to receive such additional
evidence upon showing that it is materiel and there are reasonable grounds for the
failure to present said evidence in the proceedings before the Commission. The
Commission, sitting on bane, 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.

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
ad ministrative 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

19


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 shail 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.

SEC, 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.

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

20


SEC. 34, Effect of Final Judgment. - Any final judgment in a civil or criminal action
thoroughly 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.

SEC. 35. Distribution of Damages Recovered. - The damages recovered in a civil action
under Section 26 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 shalll 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.

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 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

2


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 shalll 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.

SEC. 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 favour 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.

22


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

SEC. 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.

SEC. 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

SEC. 42. Congressional Oversight Committee, - To oversee the implementation of this
Act, there shall be created a Congressional Oversight Committee on Fair Competition
(COCEC) 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.

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CHAPTER VII
FINAL PROVISIONS

SEC, 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
subject to the jurisdiction of a regulatory agency, the
Commission shall, in preparing the guidelines, consult with the concerned regulatory
agency and stakeholders: Provided, 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.

sub-sector of industry that is

SEC. 44, Appropriations. The amount necessary to implement the provisions of this
Act shall he 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) is hereby appropriated Provided, That all moneys recovered or charges
or composition sums collected under this Act other than financial penalties, shalt be
paid into and form part of the moneys of the Commission.

SEC. 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 alternate;

ii, Department of Bud get 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;

24


i, 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. 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.

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

SEC. 45. Repealing Clause. - All laws, executive orders, rules and regulations ot parts
thereof which are inconsistent with this Act are hereby repealed or amended
accordingly.

SEC. 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,

25