Speaker Belmonte seeks passage of proposed Philippine Fair Competition Act

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House Speaker Feliciano Belmonte Jr. is seeking the enactment of his proposed Philippine Fair Competition Act of 2013 that aims to regulate, if not totally eradicate, unfair competition, monopolies and cartels, which will ultimately protect the consumers from abuses of market powers.

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The speaker’s proposal embodied in House Bill 1133 is now pending at the House Committee on Trade and Industry chaired by Rep. Mark Villar (Lone District, Las Piñas City). It is a refilled measure of HB 4835 of the 15th Congress with some improvements.

“House Bill 1133 aims to encourage fair and free economic competition by prohibiting the abuse of market dominant positions and the excessive concentration of economic power by regulating improper concerted acts and unfair business practices, thereby stimulating creative business activities, protecting consumers and promoting the balanced development of the national economy,” said Belmonte.

He said no less than the 1987 Constitution expressly provides that the State shall regulate or prohibit monopolies when the public interest so requires. The Constitution also stipulates that no combinations in restraint of trade or unfair competition shall be allowed according to the House leader.

However, the speaker said despite the constitutional guarantees and the existence of laws that affect competition, such laws have proven to be inadequate.

“The economy continues to be dominated by groups of businesses with substantial market power and political influence. Also, competition in the domestic market remains restricted in key sectors,” he said.

The speaker noted the lack of genuine competition in certain industries impairs public welfare and undermines the country’s credibility to provide a business climate conducive to investment. Likewise, he said the presence of a comprehensive competition policy will further boost the following: the nation’s Gross Domestic Product (GDP) to rise at par with the country’s first world counterparts; real wages to improve; prices to drop; and the country’s bid to attain further economic growth.

Belmonte said as outlined in the ASEAN Economic Community (AEC) Blueprint adopted in 2007, all ASEAN member states, including the Philippines, will endeavor to introduce competition policy by 2015.

Meanwhile, he said President Aquino in his first State of the Nation Address (SONA) in July 2010, called for an anti-trust law to promote fair competition and contribute to economic growth. “A level playing field is essential for inclusive growth and development,” said the speaker.

House Bill 1133 provides for the creation of a Philippine Fair Trade Commission (PFTC) to be under the Office of the President and which shall investigate, gather evidence and initiate prosecution of those engaged in unfair trade practices. It shall also look into the description of cartels and monopolies, and impose defined sanctions and penalties for violation of the Fair Competition Act.

The bill also mandates that the exercise of regulatory powers by different government agencies, including local government units (LGUs), over an industry or subsector thereof shall be cumulative and shall not be construed in any way as derogating from the power and authority of the concerned agency. Hence, while the PFTC shall have primary and sole jurisdiction over competition issues, the regulatory bodies shall continue to exercise jurisdiction over all matters with regard to the firms’ operation and exercise.

The bill provides it shall be unlawful for firms to engage in anti-competitive acts that prevent, distort, or restrict competition unless otherwise exempted. These prohibited acts shall include price fixing and bid rigging.

Likewise, the bill provides it shall be unlawful for one or more firms to abuse their dominant position by engaging in unfair methods of competition, or in unfair or deceptive trade practices, or entering into combinations in the form of trust or otherwise, or conspiracy, with the purpose and effect to prevent, restrict or distort competition. Among these prohibited acts shall be: predatory behavior towards competitors; limitation and control of markets; market allocation; arrangements to share markets or sources of supply; price discrimination; exclusivity arrangement; tie-in arrangements; and boycott.

The measure also prohibits anti-competitive mergers. It provides that no firm engaged in commerce or trade shall acquire, directly or indirectly, the whole or any part of the stock or other share capital, or the whole or any part of the assets, of one or more firms engaged in any line of commerce or trade where the effect of such acquisition of such stocks, share capital, or assets, or of the use of such stock by voting or granting of proxies or otherwise maybe to substantially lessen competition, or tend to create a monopoly.

The bill offers a leniency program to any person or firm that shall cooperate or furnish any information, document or data to the PFTC before or during the conduct of the preliminary inquiry that constitutes material evidence as determined by the Commission.PNA

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