Court upholds P69.1-B telco buyout deal

MANILA, Philippines — The Court of Appeals (CA) has upheld the legality of the buyout of the telecommunication assets of San Miguel Corp. (SMC) by industry giants PLDT and Globe Telecom.

In a 54-page decision released to the media yesterday, the former 12th division of the appellate court permanently stopped the Philippine Competition Commission (PCC) from reviewing the P69.1-billion deal.

It granted the petition filed by PLDT and Globe in July last year seeking to stop the anti-trust body’s investigation of the acquisition.

In the ruling, the CA agreed with the argument of petitioners that the deal has been deemed approved by operation of law since they have fully complied with the terms of the  transitory circulars issued by the PCC. “A writ of mandamus is hereby issued compelling the Philippine Competition Commission to recognize the subject acquisition as deemed approved by operation of law,” read the ruling penned by Associate Justice Ramon Bato.

The CA denied the plea of PCC to proceed with its pre-acquisition review, rejecting the agency’s argument that the comprehensive review is necessary as it would identify the potential impact of the transaction on public welfare as well as determine its relevant market and whether it will result to substantial changes to the market structure or not.

The court held that the PCC committed grave abuse of discretion when it did not follow its own transitory rules and regulations when Globe and PLDT announced the deal.

It stressed the National Telecommunications Commission (NTC) - not the PCC - has the authority to investigate the deal. 

The CA explained that the NTC has technical expertise to allocate frequencies to telecom companies, which cannot be unilaterally reviewed by the PCC.

“It is only the NTC that has the power (not to mention the technical expertise and institutional experience) to allocate radio frequencies, and the PCC certainly has no authority to review, reverse or modify the NTC decision,” it stressed.

Lastly, the CA also ordered the PCC to remove the Preliminary Statement of Concern posted on its website stating that the deal “is likely to substantially prevent, restrict and lessen competition” within the industry.

It agreed with the argument in PLDT’s motion that the publication of the PSOC violates Republic Act No. 10667, which considers confidential the deliberations and investigation conducted by PCC.