PCC breaks up exclusive ISP deal in 8990 condo projects

MANILA, Philippines — The Philippine Competition Commission (PCC) has closed its first abuse of dominance case as it ordered mass housing developer 8990 Holdings Inc. and its unit Urban Deca Homes Manila Condominium Corp. to break the exclusive in-house internet service provider (ISP) deal in its nine condominium projects and pay a fine worth over P27 million.

In a statement yesterday, the antitrust body said it approved the terms of settlement with modifications proposed by the firms to cancel the exclusive deal between Urban Deca Homes and Itech Rar Solutions Inc. for ISP Fiber to Deca Homes in nine residential projects across the country.

With the approval of the terms of settlement, PCC has ordered the firms to immediately cease their admitted misconduct and pay the P27.11 million fine within 30 days.

In addition, the firms will need to comply with the terms and conditions of the settlement.

Details on the specific terms and conditions of settlement were not available as of press time yesterday.

PCC will be monitoring the firms’ compliance and any breach would mean additional fines and penalties.

“This is a landmark case for the PCC that successfully resolved to stop an anticompetitive practice, restore competition in the affected market, and set as example to deter other businesses from employing similar exclusive dealings,” PCC chairman Arsenio Balisacan said.

To recall, the PCC enforcement unit filed a case against 8990 Holdings and Urban Deca Homes in March for abuse of dominance as the firms imposed a single ISP, Fiber to Deca Homes, on residents and tenants of Urban Deca Homes Manila in Tondo.

PCC’s move was made after the antitrust body received and looked into complaints from unit owners and tenants of Urban Deca Homes Manila who claimed they were barred from contracting other ISPs.

This, even when the in-house Fiber to Deca Homes service was slow, expensive and unreliable.

The firms’ move to have an exclusive ISP deal for Urban Deca Homes Manila is a violation of the Philippine Competition Act which prohibits abuse of dominant position.

“Competition—or lack of it—can be felt at home, at work, and in one’s daily activities. The residents may have chosen Urban Deca as their address, but the condo developer should not limit the choices of residents for other services,” Balisacan said.

In response to the PCC complaint, the firms proposed to correct their anticompetitive conduct through a motion for settlement negotiated from May to July.

Terms proposed by the firms were subjected to public comments in early August before being submitted to the PCC for final decision.

While the case stems from complaints of residents in Urban Deca Homes Manila in Tondo, the terms of settlement also apply to eight other Urban Deca projects located in Mandaluyong, Muntinlupa, Bulacan, Cavite, Iloilo and Cebu.

“Let this be a warning to businesses that abuse their market power by elbowing out competitors for their own gain. This case shows that the PCC is serious about addressing anticompetitive practices that have long been considered par for the course in different industries. Unscrupulous businessmen can only expect the PCC to pursue more cases of a similar nature in the future,” Balisacan said.