It has been almost a decade since the passage of Republic Act No.10667, best known as the Philippine Competition Act (PCA), the country’s primary law regulating anti-competitive practices to uphold the constitution’s prohibition of monopolies and combinations in restraint of trade.
Since its establishment in 2016 to uphold the law, the Philippine Competition Commission (PCC) has reviewed more than 293 M&A transactions with an aggregate value of more than PHP5.49 trillion (USD97.5 billion).
Yet despite this experience of enforcement reviewing hundreds of transactions, whether on notification or independently, the antitrust authority continues to face challenges.
Need for unified guidelines
Senior Associate
Corporate and special projects department
ACCRALAW
Over the years, the PCC has issued various guidelines and notes seeking to clarify transactions not covered by the PCA, assessment of merger control, computation of thresholds, process for filling out and filing notifications, and the merger review process of the Mergers and Acquisitions Office, among others.
While these efforts have been crucial in addressing gaps in the PCA and its implementing rules and regulations, there remains a need for unified implementing guidelines codifying the PCC’s issuances to streamline efficiencies and facilitate mandatory notifications/requests.
Limited capacity
The PCC may have limitations in its capacity to effectively investigate and resolve complex competition cases. For example, its recent market study emphasises the need for stronger domestic capacities involving competition issues in digital markets.
With both large and startup tech companies tapping into the Philippine market, comprehensive guidelines regulating competition concerns in the digital economy will ensure the antitrust authority keeps up with challenges brought by modern technology.
Enforcement challenges
It is said that one cannot escape the long arm of the law. Section 3 of the PCA provides that it applies not only to persons or entities engaged in any trade, industry and commerce within the Philippines, but also to “international trade having direct, substantial and reasonably foreseeable effects in trade, industry or commerce in the Philippines, including those that result from acts done outside the Republic of the Philippines”.
As such, offshore transactions may fall within the PCC’s ambit if such transaction has direct, substantial and reasonably foreseeable effects in trade, industry or commerce in the Philippines.
It is well settled that any decision issued without jurisdiction is void and can never become final, and “any writ of execution based on it is likewise void”.
Under the 2017 PCC Rules of Procedure, the PCC may acquire jurisdiction over a person by service of a summons and voluntary appearance.
For foreign corporations not registered in the Philippines, summons may be served: “(1) on its officers or agents in the Philippines; (2) through the appropriate court in the foreign country with the assistance of the Department of Foreign Affairs; (3) by publication once in a newspaper of general circulation in the country where the respondent may be found, and in such places as the PCC may order, posting the summons on the PCC website, and serving a copy thereof by registered mail at the last known address of the respondent; (4) by facsimile or any recognised electronic means that could generate proof of service; or (5) by such other means as the PCC may, in its discretion, direct.”
In principle, the above-mentioned provisions on the service of a summons should allow the PCC to catch those who violate the PCA and relevant issuances. But this may require local presence, sophisticated systems or close co-ordination with the pertinent government agencies.
Nevertheless, while the PCC may acquire jurisdiction over entities overseas through the service of a summons following the modes provided under its rules and regulations, enforcement – including imposition of penalties, if any – is a different matter and may prove difficult, especially if parties do not have a local presence.
Takeaway
While the country has come a long way in leveraging the playing field for market players, efforts are still needed to ensure effective implementation of a framework envisioned to promote competition and achieve the objectives of the PCA.
The views and opinions expressed in this article are those of the author. This article is for general informational purposes only and does not constitute legal advice or legal opinion.
Justine A Navarro is a senior associate of the corporate and special projects department at Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW)
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