Recent Developments

August 8, 2017 marked the end of the two-year transitory period under the Philippine Competition Act (PCA) for businesses to correct anti-competitive practices without being penalized under the PCA. The Philippine Competition Commission (Commission) is now seen to be escalating its efforts towards enforcement of the PCA prohibitions against anti-competitive agreements and abuse of dominance, and imposing penalties for violations.

In line with this, the Commission has released the Interim Rules on Preliminary Inquiry and Full Administrative Investigation (Interim Rules). Pending the issuance of the final version of the Commission's Rules of Procedure, the Interim Rules will govern the handling of complaints, referrals from regulatory agencies and inquiries initiated by the Commission in respect of potential violations of the PCA, its implementing rules and regulations and other competition laws.

Applicability

The Interim Rules shall apply to the conduct of a preliminary inquiry and a full administrative investigation for possible violations of the PCA, its implementing rules and regulations and other competition laws.

Preliminary Inquiry

The purpose of the preliminary inquiry is to determine whether there are reasonable grounds to conduct a full administrative investigation for any violation of the PCA, its implementing rules, or other existing competition laws. The preliminary inquiry shall be conducted by the Commission, through its Enforcement Office. It shall be deemed to have commenced after ten days from receipt of a verified complaint, referral by a regulatory agency, or motu proprio directive from the Commission.

The Interim Rules provide for a mandatory 90-day period from commencement to complete the preliminary inquiry. The Enforcement Office shall terminate the preliminary inquiry by issuing a resolution (i) to close the inquiry in case there is a finding that there is no anti-competitive act; (ii) to close the inquiry without prejudice, if the facts and information obtained are insufficient to proceed to a full administrative investigation; or (iii) to proceed to the conduct of a full administrative investigation.

Full Administrative

Investigation A full administrative investigation is conducted after the preliminary inquiry to determine whether there is sufficient basis to file an administrative charge in connection with an anti-competitive act. The full administrative investigation is also done by the Enforcement Office, which may conduct a conference to ascertain or clarify relevant facts and issues. At the end of the full administrative investigation, the Enforcement Office shall either (i) file a Statement of Objections charging the entity being investigated for violation of the PCA, its implementing rules and regulations or other competition laws; or (b) terminate the investigation without prejudice to the conduct of another investigation, in case basis to charge such entity is insufficient.

Why it affects you?

With the end of the two-year transitory period under the PCA, the Commission will now fully implement the PCA, including the prohibitions against anti-competitive agreements and abuse of dominance, Act and enforce penalties for its violations. It is important for businesses that may be exposed to competition law risks to be familiar with the investigation procedure and be apprised of their rights and remedies in the process. Meanwhile, those planning to lodge complaints for anti-competitive acts will have to acquaint themselves with the relevant requirements, timelines and procedures for the resolution of such complaints.