The Philippine Competition Act (RA 10667) was signed into law by President Benigno Aquino on July 21, 2015. Its main author is Sen. Paulo Benigno Aquino, the president’s cousin.
Considered a game-changing legislation, it is expected to usher in a new era of doing business in the country, curb unfair, anti-competitive trade practices and help level the playing field for all companies operating in the country, from the large foreign multinationals down to the local micro, small and medium scale enterprises (MSMEs).
Senator Aquino has explained in a briefing document that a competition policy is crucial since it defines the rules of the game, providing the framework where free market players can compete fairly for their share of the market; encourages more players to enter the market; and empowers consumers with more options in the market.
The Competition Act addresses two main prohibited acts: the abuse of dominant position and anti-competitive agreements. Both are considered criminal offenses.
Abuse of dominant position includes: selling goods below market prices to suppress competition; imposing barriers to entry; imposing restriction on the lease on contract of sale or trade of goods that is anti-competitive, and making the supply of such goods dependent on the purchase of other goods and services.
Anticompetitive agreements may be in the form of price fixing, limiting or controlling production, relevant markets and technical development or investment, dividing or sharing the relevant market geographically in terms of volume of sales, type of goods, or buyers and sellers, and application of dissimilar conditions to different parties.
The law imposes administrative penalties of a maximum fine of P100 million on the first offense and P250 million for the second offense.
Tasked to look into anti-competitive behavior, abuses in dominant positions, and anticompetitive mergers and acquisitions is a quasi-judicial body to be known as the Philippine Competition Commission.
The Commission is authorized to conduct inquiry or investigate upon receipt of a complaint; monitor and take measures to penalize abuses; issue subpoena to testify and produce documents; undertake inspections on business premises on substantial proof they are anticompetitive; stop and redress anticompetitive acts; and impose fines and penalties.
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