PCC Commissioner Johannes Bernabe said in an interview on The Chiefs aired over One News Friday night that while the antitrust body supports the economic stimulus package under the ARISE bill, there are concerns on provisions that would weaken or take away the power of the agency against possible anti-competitive behavior.
STAR/File
PCC raises regulatory concerns on economic bills
Louella Desiderio (The Philippine Star) - July 5, 2020 - 12:00am

MANILA, Philippines ? The Philippine Competition Commission (PCC) has raised concerns on the provisions under the proposed measures such as the Accelerated Recovery and Investments Stimulus Economy of the Philippines (ARISE) bill and Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery (GUIDE) bill  that would hamper the agency from exercising its power against anti-competitive acts.

PCC Commissioner Johannes Bernabe said in an interview on The Chiefs aired over One News Friday night that while the antitrust body supports the economic stimulus package under the ARISE bill, there are concerns on provisions that would weaken or take away the power of the agency against possible anti-competitive behavior.

Of particular concern to the antitrust body is Section 12 of the ARISE bill which would limit the mandate of the PCC by requiring it to desist from imposing fines and other monetary penalties for non-filing, late filing or failure to comply with compulsory notification.

Under the bill, the PCC for a period of six months and extendable up to one year, will also desist from requiring any submission by parties to any proceedings before it, including fact-finding and preliminary inquiries, as well as from issuing statement of concerns.

“So this means that if there are price fixing cartels for instance of alcohol products, hygiene products, we cannot file a statement of objection or charge sheet against those who have committed cartel behavior. Similarly, if there are mergers or acquisitions which take place within this six months to 12 months period, we cannot proceed to issue a statement of concerns that is equivalent to a decision which would recommend the blocking or imposition of conditions or remedies to address competition concerns in these mergers or acquisitions,” Bernabe said.

He said some advocates of the bill are arguing the PCC could conduct a motu proprio review or review of mergers and acquisitions on its own initiative.

While the PCC can undertake a motu proprio review, he said such would be useless if the antitrust body is prevented under ARISE to issue a statement of concerns which would identify competition issues and conditions that need to be addressed in the transaction.

As the provision on the restrictions on the exercise of the PCC’s power was inserted during the period for individual amendments on the floor, the antitrust body did not have an opportunity to explain to the House of Representatives how such may lead to anti-competitive outcomes.

Apart from ARISE, PCC also cautioned on the proposed Senate measure similar to the GUIDE bill which would authorize state-run Land Bank of the Philippines and the Development Bank of the Philippines to create a special holding company to rehabilitate strategically important companies affected by the coronavirus disease 2019 or COVID-19 pandemic.

The GUIDE bill provides that transactions by the special holding company and its subsidiaries would be exempt from provisions of the Philippine Competition Act for a period of three years from incorporation.

“This is a little bit of a concern because the budget for these mergers and acquisitions of the special investment company is about P35 billion. So, if you look at it in terms of 10 transactions that will be entered into over the next three years, then you have potentially 10 transactions which ought to be reviewed and may not be subjected to that kind of competition scrutiny,” Bernabe said.

He said the PCC has submitted a position paper to the Senate containing its recommended amendments to address the concerns raised on the provisions of the proposed measures.

On ARISE, the PCC recommends that its power to require parties to submit information and to issue a statement of concerns be retained.

Should the current provision under the bill be retained, PCC said it should be imposed for a limited period of six months without the possibility of extension.

As for GUIDE, PCC recommends requiring the special holding company and its subsidiaries to consult with the antitrust body before execution of the transaction agreement in order to determine if there are competition-related issues and to avoid any competitive harm in the market.

Bernabe said that similar to the third telco selection process, the PCC would want to be invited to provide comments on competition issues on the transaction.

“Now, it depends on the Senate on whether they would take on board our position and proposal for this so that if in the end there is a competition issue, there is a big merger or acquisition that happens, no one can say PCC was sleeping on its job,” he added.

He said it is important the PCC is able to exercise its power to ensure mergers and acquisitions do not lead to monopoly and duopoly and consumers are not deprived of choice, lower prices and good quality products.

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