Move from July 6, non-working Eid’l Fitr holiday
THE Philippine Competition Commission (PCC) has moved its dialogue with the two telco giants PLDT Inc. and Globe Telecom Inc. to Friday, July 8 from the original schedule of Wednesday, July 6.
Malacañang Palace declared on Monday that July 6 is a regular non-working holiday in observance of the end of Ramadan fasting or Eid’l Fitr.
Ramon Isberto, PLDT spokesperson, said in a text message that the meeting between PCC and the two telecom companies has been moved to Friday.
The meeting aims to clarify the issues surrounding the P69.1-billion buyout by the two telcos of San Miguel Corp.’s (SMC) telecommunications business, which would reportedly help PLDT and Globe upgrade their internet services.
To recall, PLDT and Globe signed separate sale and purchase agreements (SPAs) on May 30 for a 50-50 acquisition of SMC’s telecoms business under Vega Telecom Inc. for a total of P69.1 billion. The two telecom firms filed for notification to the PCC on the same day.
As per the Philippine Competition Act (PCA) or Republic Act No. 10667, parties to mergers and acquisitions (M&As) worth more than P1 billion are required to file a notification letter to the PCC so that the latter can check whether there were anti-trust practices and abuse of market dominance present in the transactions.
Under the competition law’s final and approved implementing rules and regulations (IRR), parties to any covered M&As are forbidden to consummate the deals until the PCC review is done.
The law cites that “an agreement consummated in violation of this requirement to notify the Commission shall be considered void and subject the parties to an administrative fine of 1 percent to 5 percent of the value of the transaction.”
The PCC has been reiterating that the big-ticket transactions between PLDT, Globe and SMC Group are still not “deemed approved” and are still under PCC evaluation, while the two telcos claim the deals are already “deemed approved.”
In their defense, PLDT, Globe and SMC detailed in separate disclosures dated June 13 that they submitted their notification letter to the PCC on May 30, which was prior to the completion of the final IRR of the commission.
The PCC’s final and approved IRR was officially signed on May 31, and was published in a bid bulletin on June 3.
In crafting the notification letters, Globe earlier said the telecom giants referred to PCC’s second memorandum circular —MC 16-002—which stated that covered transactions are “deemed approved” if they are “consummated after the effectivity of this Memorandum Circular but before the effectivity of the implementing rules and regulations,” which validates the telco giants’ claim of the notification being “deemed approved” by the PCC.
The competition law, enacted last year, seeks to promote fair market competition and imposes penalties on unfair market practices, including anti-competitive mergers and acquisitions, abuse of dominant position, cartels, and anti-competitive agreements, among others.
Created in February 2016, the PCC is a quasi-judicial body formed by the PCA, which is tasked to ensure efficient market competition by leveling the playing field among businesses, protect consumer welfare, and advance both domestic and international trade and economic development.