Secs. 14-21, Philippine Competition Act (Rep. Act No.

10667) (c) Making a transaction subject to acceptance by the

CHAPTER III other parties of other obligations which, by their nature
PROHIBITED ACTS or according to commercial usage, have no connection
Sec. 14. Anti-Competitive Agreements. – with the transaction;
(a) The following agreements, between or among (d) Setting prices or other terms or conditions that
competitors, are per se prohibited: discriminate unreasonably between customers or
sellers of the same goods or services, where such
(1) Restricting competition as to price, or components customers or sellers are contemporaneously trading on
thereof, or other terms of trade; similar terms and conditions, where the effect may be
(2) Fixing price at an auction or in any form of bidding to lessen competition substantially: Provided, That the
including cover bidding, bid suppression, bid rotation following shall be considered permissible price
and market allocation and other analogous practices of differentials:
bid manipulation; (1) Socialized pricing for the less fortunate sector of the
(b) The following agreements, between or among economy;
competitors which have the object or effect of (2) Price differential which reasonably or
substantially preventing, restricting or lessening approximately reflect differences in the cost of
competition shall be prohibited: manufacture, sale, or delivery resulting from differing
(1) Setting, Kmiting, or controlling production, methods, technical conditions, or quantities in which
markets, technical development, or investment; the goods or services are sold or delivered to the
(2) Dividing or sharing the market, whether by volume buyers or sellers;
of sales or purchases, territory, type of goods or (3) Price differential or terms of sale offered in
services, buyers or sellers or any other means; response to the competitive price of payments, services
(c) Agreements other than those specified in (a) and (b) or changes in the facilities furnished by a competitor;
of this section which have the object or effect of and
substantially preventing, restricting or lessening (4) Price changes in response to changing market
competition shall also be prohibited: Provided, Those conditions, marketability of goods or services, or
which contribute to improving the production or volume;
distribution of goods and services or to promoting (e) Imposing restrictions on the lease or contract for
technical or economic progress, while allowing sale or trade of goods or services concerning where, to
consumers a fair share of the resulting benefits, may whom, or in what forms goods or services may be sold
not necessarily be deemed a violation of this Act. or traded, such as fixing prices, giving preferential
An entity that controls, is controlled by, or is under discounts or rebate upon such price, or imposing
common control with another entity or entities, have conditions not to deal with competing entities, where
common economic interests, and are not otherwise the object or effect of the restrictions is to prevent,
able to decide or act independently of each other, shall restrict or lessen competition
not be considered competitors for purposes of this substantially: Provided, That nothing contained in this
section. Act shall prohibit or render unlawful:
SEC. 15. Abuse of Dominant Position. – It shall be (1) Permissible franchising, licensing, exclusive
prohibited for one or more entities to abuse their merchandising or exclusive distributorship agreements
dominant position by engaging in conduct that would such as those which give each party the right to
substantially prevent, restrict or lessen competition: unilaterally terminate the agreement; or
(a) Selling goods or services below cost with the object (2) Agreements protecting intellectual property rights,
of driving competition out of the relevant confidential information, or trade secrets;
market: Provided, That in the Commission’s evaluation (f) Making supply of particular goods or services
of this fact, it shall consider whether the entity or dependent upon the purchase of other goods or
entities have no such object and the price established services from the supplier which have no direct
was in good faith to meet or compete with the lower connection with the main goods or services to be
price of a competitor in the same market selling the supplied;
same or comparable product or service of like quality;
(g) Directly or indirectly imposing unfairly low
(b) Imposing barriers to entry or committing acts that purchase prices for the goods or services of, among
prevent competitors from growing within the market others, marginalized agricultural producers, fisherfolk,
in an anti-competitive manner except those that micro-, small-, medium-scale enterprises, and other
develop in the market as a result of or arising from a marginalized service providers and producers;
superior product or process, business acumen, or legal
rights or laws; (h) Directly or indirectly imposing unfair purchase or
selling price on their competitors, customers, suppliers
or consumers, provided that prices that develop in the necessary and directly relevant to the prohibition
market as a result of or due to a superior product or under Section 20 hereof from the parties to the
process, business acumen or legal rights or laws shall agreement before the expiration of the thirty (30)-day
not be considered unfair prices; and period referred. The issuance of such a request has the
(i) Limiting production, markets or technical effect of extending the period within which the
development to the prejudice of consumers, provided agreement may not be consummated for an additional
that limitations that develop in the market as a result of sixty (60) days, beginning on the day after the request
or due to a superior product or process, business for information is received by the
acumen or legal rights or laws shall not be a violation parties: Provided, That, in no case shall the total period
of this Act: for review by the Commission of the subject agreement
exceed ninety (90) days from initial notification by the
Provided, That nothing in this Act shall be construed or
parties.
interpreted as a prohibition on having a dominant
position in a relevant market or on acquiring, When the above periods have expired and no decision
maintaining and increasing market share through has been promulgated for whatever reason, the merger
legitimate means that do not substantially prevent, or acquisition shall be deemed approved and the
restrict or lessen competition: parties may proceed to implement or consummate it.
All notices, documents and information provided to or
Provided, further, That any conduct which contributes to
emanating from the Commission under this section
improving production or distribution of goods or
shall be subject to confidentiality rule under Section 34
services within the relevant market, or promoting
of this Act except when the release of information
technical and economic progress while allowing
contained therein is with the consent of the notifying
consumers a fair share of the resulting benefit may not
entity or is mandatorily required to be disclosed by
necessarily be considered an abuse of dominant
law or by a valid order of a court of competent
position:
jurisdiction, or of a government or regulatory agency,
Provided, finally, That the foregoing shall not constrain including an exchange.
the Commission or the relevant regulator from
In the case of the merger or acquisition of banks,
pursuing measures that would promote fair
banking institutions, building and loan associations,
competition or more competition as provided in this
trust companies, insurance companies, public utilities,
Act.
educational institutions and other special corporations
CHAPTER IV governed by special laws, a favorable or no-objection
MERGERS AND ACQUISITIONS ruling by the Commission shall not be construed as
SEC. 16. Review of Mergers and Acquisitions. — The dispensing of the requirement for a favorable
Commission shall have the power to review mergers recommendation by the appropriate government
and acquisitions based on factors deemed relevant by agency under Section 79 of the Corporation Code of
the Commission. the Philippines.
SEC. 17. Compulsory Notification. – Parties to the merger A favorable recommendation by a governmental
or acquisition agreement referred to in the preceding agency with a competition mandate shall give rise to a
section wherein the value of the transaction exceeds disputable presumption that the proposed merger or
one billion pesos (P1,000,000,000.00) are prohibited acquisition is not violative of this Act.
from consummating their agreement until thirty (30) SEC. 18. Effect of Notification. — If within the relevant
days after providing notification to the Commission in periods stipulated in the preceding section, the
the form and containing the information specified in Commission determines that such agreement is
the regulations issued by the prohibited under Section 20 and does not qualify for
Commission: Provided, That the Commission shall exemption under Section 21 of this Chapter, the
promulgate other criteria, such as increased market Commission may:
share in the relevant market in excess of minimum
(a) Prohibit the implementation of the agreement;
thresholds, that may be applied specifically to a sector,
or across some or all sectors, in determining whether (b) Prohibit the implementation of the agreement
parties to a merger or acquisition shall notify the unless and until it is modified by changes specified by
Commission under this Chapter. the Commission.
An agreement consummated in violation of this (c) Prohibit the implementation of the agreement
requirement to notify the Commission shall be unless and until the pertinent party or parties enter
considered void and subject the parties to an into legally enforceable agreements specified by the
administrative fine of one percent (1%) to five percent Commission.
(5%) of the value of the transaction. SEC. 19. Notification Threshold. – The Commission shall,
Should the Commission deem it necessary, it may from time to time, adopt and publish regulations
request further information that are reasonably stipulating:
(a) The transaction value threshold and such other
criteria subject to the notification requirement of
Section 17 of this Act;
(b) The information that must be supplied for notified
merger or acquisition;
(c) Exceptions or exemptions from the notification
requirement; and
(d) Other rules relating to the notification procedures.
SEC. 20. Prohibited. Mergers and Acquisitions. – Merger
or acquisition agreements that substantially prevent,
restrict or lessen competition in the relevant market or
in the market for goods or services as may be
determined by the Commission shall be prohibited.
SEC. 21. Exemptions from Prohibited. Mergers and
Acquisitions. – Merger or acquisition agreement
prohibited under Section 20 of this Chapter may,
nonetheless, be exempt from prohibition by the
Commission when the parties establish either of the
following:
(a) The concentration has brought about or is likely to
bring about gains in efficiencies that are greater than
the effects of any limitation on competition that result
or likely to result from the merger or acquisition
agreement; or
(b) A party to the merger or acquisition agreement is
faced with actual or imminent financial failure, and the
agreement represents the least anti-competitive
arrangement among the known alternative uses for the
failing entity’s assets:
Provided, That an entity shall not be prohibited 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 or acquiring
or maintaining its market share in a relevant market
through such means without violating the provisions
of this Act:
Provided, further, That the acquisition of the stock or
other share capital of one or more corporations solely
for investment and not used for voting or exercising
control and not to otherwise bring about, or attempt to
bring about the prevention, restriction, or lessening of
competition in the relevant market shall not be
prohibited.