Foreign businesses plug for passage of Competition Law

The enactment and subsequent enforcement of a Competition Law will level the playing field for investors in the Philippines and consequently spur business activity in the country, according to a recent statement issued by the Joint Foreign Chambers of the Philippines.

The group said that a well-crafted and well-implemented competition law will develop and preserve the competition process, with the ultimate goal of safeguarding and promoting consumer welfare.

An atmosphere of free and fair competition will compel businesses to maintain and improve their competitive edge by minimizing production and distribution costs as well as by investing in research and development and innovative measures. Consumers ultimately benefit with so many competing offers to choose from, selecting those goods and services best able to meet their needs, it added.

Competition law, or antitrust law, has three main elements: (1) prohibiting agreements or practices that restrict free trading and competition between business. This includes in particular the repression of free trade caused by cartels; (2) banning abusive behavior by a firm dominating a market, or anti-competitive practices that tend to lead to such a dominant position. Practices controlled in this way may include predatory pricing, tying, price gouging, refusal to deal, and many others.; and (3) supervising the mergers and acquisitions of large corporations, including some joint ventures.

Competition law is closely connected with law on deregulation of access to markets, state aids and subsidies, the privatization of state owned assets and the establishment of independent sector regulators, among other market-oriented supply-side policies.

.It is recalled that Antitrust measures had been filed in Congress since at least the 9th Congress (1992-1995) but had never reached the bicameral conference committee stage due to strong opposition from “lobby groups,”

An envisioned competition act was in the list of 23 priority measures the Legislative Executive Development Advisory Council drew up last February.

Currently, Senate Bill (SB) No. 1 and House Bill (HB) No. 4835 both prohibit and penalize cartels, monopolies and other anti-competitive arrangements and practices.

But they differ when it comes to enforcement, with the House measure entrusting the task to an envisioned five-man Philippine Competition Commission and the Senate bill vesting this authority in the Justice department.

HB 4835 was approved by the House committee on trade and industry last June, while SB 1 has been pending at the counterpart Senate committee since July 2010.

Last June, Executive Order No. 45 designated the Justice department as Competition Authority — with an Office for Competition as operating arm — to enforce relevant provisions of already existing laws.

“JFC sees this decision of the Aquino Administration as a move to hit the ground running, address competition issues immediately and create the level playing field that consumers deserve,” the statement read.

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