PCC tightens watch on cartels after Congress clipped review powers

MANILA, Philippines — With review powers clipped by Congress, antitrust regulators are concentrating their resources on catching corporates abusing their dominance and promoting cartels to protect consumer interest amid the pandemic.

“The PCC will intensify action in other areas of enforcing the competition law especially against anti-competitive agreements and abusive practices that harm consumers or unscrupulously take advantage of the crisis,” said Arsenio Balisacan, chair of Philippine Competition Commission (PCC).

Sought for further comment, Balisacan said this means the agency will be on the lookout for “anti-competitive conduct or agreements such as cartels and abuse of dominance” which is not prevented by Republic Act 11494 or the Bayanihan to Recover As One Act.

“We can also intensify our efforts in advocacy for pro-competitive policies and regulations,” he said in a text message on Monday. 

The change in PCC’s strategy against monopolistic behavior did not come without a reason. It is forced to do so after legislators that passed the Bayanihan to Recover As One Act inserted a provision at the last minute that raised the bar for mergers and acquisitions to trigger a review of antitrust authorities.

Under the law signed last month, M&As would only be reviewed by PCC if the transaction is worth over P50 billion over the next 2 years, a staggering amount that only a few local conglomerates, and their transactions, are likely to hit. To make matters worse, PCC is also prevented from inquiring on itself about these transactions for 1 year.

Increasing the price threshold for a review virtually eliminates one of PCC’s core functions since as it is, most local corporates tend to be small, while the bigger ones are not big enough to trigger a review under the Bayanihan 2. Indeed, Balisacan is resigned to “fewer merger notifications” ahead.

But PCC also no longer challenged the contentious provision before the courts. “The PCC recognizes the need to strike a balance in implementing the policy objectives of promoting business continuity under the Bayanihan 2 and looking after market efficiency and consumer welfare under the Philippine Competition Act,” Balisacan said.

Under PCC’s Memorandum Circular 20-003 issued on Monday, which laid out the higher review thresholds for M&A reviews, regulators also said that nothing stops the agency from checking back transactions once the Bayanihan provision expires. For now however, regulators encouraged parties to still report their transactions despite a more relaxed competition rule.

To date, the PCC is reviewing five transactions notified before Bayanihan 2’s took effect last September 15. In 2019, PCC received 46 notifications from corporates with transactions worth P811.61 billion.