COMPETITION POLICYCOMPETITION POLICY

Undersecretary Undersecretary ZenaidaZenaida CuisonCuison MaglayaMaglaya Consumer Welfare and Trade Regulation GroupConsumer Welfare and Trade Regulation Group

Department of Trade and IndustryDepartment of Trade and Industry PhilippinesPhilippines

STATE OF COMPETITION IN THE STATE OF COMPETITION IN THE PHILIPPINESPHILIPPINES

I.I. IntroductionIntroduction

§§ The Philippines will eventually embrace The Philippines will eventually embrace a wide ranging competition within a a wide ranging competition within a matter of timematter of time

§§ Competition will not be the end in itself Competition will not be the end in itself but rather a means to an endbut rather a means to an end

§§ The objective is to foster The objective is to foster ““competition competition cultureculture”” in the countryin the country

STATE OF COMPETITION IN THE STATE OF COMPETITION IN THE PHILIPPINESPHILIPPINES

§§ Given the PhilippinesGiven the Philippines’’ economic, economic, legal, cultural and social peculiarities legal, cultural and social peculiarities a gradual and phased approach a gradual and phased approach should be undertakenshould be undertaken

§§ The phased basis will ultimately The phased basis will ultimately create and establish a comprehensive create and establish a comprehensive competition lawcompetition law

STATE OF PHILIPPINE COMPETITION STATE OF PHILIPPINE COMPETITION POLICYPOLICY

§§ Revitalize Revitalize sectoralsectoral regulation and regulation and strengthen competition enforcement strengthen competition enforcement capabilitiescapabilities

§§ SectoralSectoral regulation is intended to address regulation is intended to address market failure and meet social objectivesmarket failure and meet social objectives

§§ It is imperative that a mechanism of It is imperative that a mechanism of cooperation and coordination between cooperation and coordination between competition policy and competition policy and sectoralsectoral regulation regulation be put in placebe put in place

STATE OF PHILIPPINE COMPETITION STATE OF PHILIPPINE COMPETITION POLICYPOLICY

IIII. . Recent LegislationsRecent Legislations §§ RR..AA. . 79257925 Public Telecommunication Policy Public Telecommunication Policy

ActAct §§ RR..AA. . 84798479 Downstream Oil Industry Downstream Oil Industry

Deregulation ActDeregulation Act §§ RR..AA. . 91369136Electric Power Industry Reform Electric Power Industry Reform

Act of Act of 20012001 §§ RR..AA. . 75817581 Price Act Price Act §§ RR..AA. . 73947394 Consumer Act of the Philippines Consumer Act of the Philippines

STATE OF PHILIPPINE COMPETITION STATE OF PHILIPPINE COMPETITION POLICYPOLICY

IIII. . Recent LegislationsRecent Legislations §§ Republic Act No Republic Act No 88008800, Safeguard , Safeguard

Measures ActMeasures Act §§ Republic Act NoRepublic Act No. . 87518751 Anti Anti--Dumping ActDumping Act §§ Republic Act NoRepublic Act No. . 87528752 Countervailing Act Countervailing Act

of of 19991999 §§ Republic Act NoRepublic Act No. . 87628762 Retail Trade Retail Trade

Liberalization Act of Liberalization Act of 20002000

STATE OF PHILIPPINE COMPETITION STATE OF PHILIPPINE COMPETITION POLICYPOLICY

IIII. . Recent LegislationsRecent Legislations §§ Republic Act NoRepublic Act No. . 82938293 Intellectual Intellectual

Property Code of the PhilippinesProperty Code of the Philippines §§ Republic Act NoRepublic Act No. . 80418041, The Water Crisis , The Water Crisis

ActAct

STATE OF PHILIPPINE COMPETITION STATE OF PHILIPPINE COMPETITION POLICYPOLICY

IIIIII. . The Legislative ChallengeThe Legislative Challenge §§ What remains unsettled now is what What remains unsettled now is what

should be the legislative approach to should be the legislative approach to address this critical challenge address this critical challenge -- shall they shall they outright embrace competition law in a outright embrace competition law in a comprehensive legislative package as comprehensive legislative package as advocated by most developed countries, or advocated by most developed countries, or shall they opt for a gradual, piecemeal shall they opt for a gradual, piecemeal strategy strategy

STATE OF PHILIPPINE COMPETITION STATE OF PHILIPPINE COMPETITION POLICYPOLICY

IVIV. . Recent InitiativesRecent Initiatives §§ Senate Bill Senate Bill 210210

§§ Senate Bill Senate Bill 511511 §§ Senate Bill Senate Bill 11991199 §§ House Bill No House Bill No. . 116116 §§ House Bill No House Bill No. . 18741874 §§ House Bill No House Bill No. . 29582958 §§ House Bill No House Bill No. . 31393139 Status Status : : Referred to Committee on Trade and Referred to Committee on Trade and Industry & Economics of both HousesIndustry & Economics of both Houses

STATE OF PHILIPPINE COMPETITION STATE OF PHILIPPINE COMPETITION POLICYPOLICY

Senate BillsSenate Bills Date of Public Hearing Date of Public Hearing -- 0909 March March 20062006 House BillsHouse Bills Date of Public Hearing Date of Public Hearing –– 0909 August August 20052005

PROHIBITED ANDPROHIBITED AND//OR UNLAWFUL ACTS, OR UNLAWFUL ACTS, AND COURSE OF CONDUCTAND COURSE OF CONDUCT

§§ Agreements, Agreements, contracts, contracts, combinations or combinations or conspiraciesconspiracies §§ Monopoly or Monopoly or attempt to attempt to monopolizemonopolize §§ Price Price discriminationdiscrimination §§ Prohibited Prohibited stipulations in stipulations in lease or sales lease or sales contractcontract §§ Prohibited stock Prohibited stock or asset or asset acquisitionacquisition

§§ MonopolyMonopoly §§ Price discriminationPrice discrimination §§ Paying or receiving Paying or receiving commission, commission, brokerage and other brokerage and other compensationcompensation §§ Paying or contracting Paying or contracting for the payment of for the payment of anything of value anything of value §§ Discrimination in favor Discrimination in favor of one purchaserof one purchaser §§ Inducement or Inducement or receiving receiving discrimination in pricediscrimination in price

§§ Monopolies Monopolies –– Absolute and Absolute and RelativeRelative §§ AntiAnti--trusttrust §§ NonNon--contestable contestable actsacts §§ Determination of Determination of relevant marketrelevant market §§ Determination of Determination of Substantial PowerSubstantial Power

SB SB 11991199 SB SB 511511 SB SB 210210

PROHIBITED ANDPROHIBITED AND//OR UNLAWFUL OR UNLAWFUL ACTS, AND COURSE OF CONDUCTACTS, AND COURSE OF CONDUCT

§§ Prohibited stock Prohibited stock or asset or asset acquisition acquisition §§ Prohibited grant Prohibited grant of proxies or of proxies or voting rightsvoting rights §§ Prohibited Prohibited board board membership in membership in 22 or more or more corporationscorporations

§§ Be a director in any Be a director in any two or more two or more corporationscorporations

SB SB 11991199 SB SB 511511 SB SB 210210

CREATION OF ANTITRUST COMMISSIONCREATION OF ANTITRUST COMMISSION// FAIR TRADE COMMISSIONFAIR TRADE COMMISSION

§§ Created as an Created as an independent antitrust independent antitrust commissioncommission §§ Five commissionersFive commissioners §§ Term of office is Term of office is 77 years without years without reappointmentreappointment §§

§§ Created as an Created as an administrative body administrative body of DTI; technically of DTI; technically and operationally and operationally autonomousautonomous §§ Five membersFive members §§ Renewable period Renewable period of of 66 years but not years but not more than more than 22 terms terms

SB SB 11991199 SB SB 511511 SB SB 210210

PROHIBITED ANDPROHIBITED AND//OR UNLAWFUL ACTS, OR UNLAWFUL ACTS, AND COURSE OF CONDUCTAND COURSE OF CONDUCT

§§ Agreements, contracts, Agreements, contracts, combinations or combinations or conspiraciesconspiracies §§ Monopoly or attempt to Monopoly or attempt to monopolizemonopolize §§ Price discriminationPrice discrimination §§ Prohibited stipulations Prohibited stipulations in lease or sales in lease or sales contractcontract §§ Prohibited stock or Prohibited stock or asset acquisitionasset acquisition §§ Prohibited grant of Prohibited grant of proxies or voting rightsproxies or voting rights §§ Prohibited board Prohibited board membership in membership in 22 or or more corporationsmore corporations

§§ Monopolies and Monopolies and cartelscartels §§ Monopoly power Monopoly power or abuse of or abuse of market power market power by one in a by one in a dominant dominant positionposition §§ Merger, Merger, consolidation consolidation and asset and asset acquisitionacquisition

§§Agreements restricting Agreements restricting dealings or affecting dealings or affecting competitioncompetition §§Agreements in relation Agreements in relation to prices and quantityto prices and quantity §§Secondary boycottsSecondary boycotts §§Misuse of market powerMisuse of market power §§MonopolyMonopoly §§Resale price Resale price maintenancemaintenance §§Withholding supplyWithholding supply §§Prohibition of acquisition Prohibition of acquisition that lessens competition that lessens competition

HB HB 29582958//HB HB 31393139 HB HB 18741874 HB HB 116116

CREATION OF ANTITRUST COMMISSIONCREATION OF ANTITRUST COMMISSION//FAIR TRADE FAIR TRADE

COMMISSIONCOMMISSION:: POWERS AND FUNCTIONSPOWERS AND FUNCTIONS

§§ Enforce and administer Enforce and administer laws and regulations laws and regulations governing monopolies, governing monopolies, combinations in restraint combinations in restraint of trade and unfair of trade and unfair competition, including competition, including laws on consumer laws on consumer protectionprotection §§ Exercise all the powers Exercise all the powers necessary or incidental to necessary or incidental to attain the purpose of this attain the purpose of this law and other laws law and other laws vesting additional vesting additional functions of the functions of the Commission Commission

§§ Power to adopt and use Power to adopt and use a seala seal §§ Power to adopt its Power to adopt its internal rules and internal rules and procedures and to procedures and to amend or repeal the amend or repeal the samesame §§ Power to acquire, hold or Power to acquire, hold or convey propertyconvey property §§ Collect and disseminate Collect and disseminate information on matters information on matters affecting or likely to affecting or likely to affect the interests of affect the interests of business and consumersbusiness and consumers

HB HB 29582958// HB HB 31393139

HB HB 18741874 HB HB 116116

THANK YOU THANK YOU !!