tag:blogger.com,1999:blog-8360175458910943822024-02-20T17:49:49.395+08:00Fight for RightJust because you're BIG, it doesn't mean you can get away with it!FRR: Fight for Right!http://www.blogger.com/profile/00463752414867871669noreply@blogger.comBlogger137125tag:blogger.com,1999:blog-836017545891094382.post-42535839850153354442012-01-04T19:01:00.000+08:002012-01-04T19:01:14.098+08:00CHARGES AGAINST NESTLE OFFICIALS STILL PENDING<div dir="ltr" style="text-align: left;" trbidi="on"><span style="font-family: inherit;"><b>"This Could Be The Tipping Point"</b></span><br />
<span style="font-family: inherit;">by Emil Jurado</span><br />
<span style="font-family: inherit;">04 January 2012, TO THE POINT, Manila Standard Today</span><br />
<span style="font-family: inherit;"><i>(Original article available online <a href="http://www.manilastandardtoday.com/insideOpinion.htm?f=2012/january/4/emiljurado.isx&d=2012/january/4">here</a>).</i></span><br />
<span style="font-family: inherit;"><br />
</span><br />
<br />
<div style="background-color: white; font-size: 14px; text-align: -webkit-auto;"><span style="font-family: inherit;">"***</span></div><div style="background-color: white; font-size: 14px; text-align: justify;"><span style="font-family: inherit;">Last month, I wrote about developments on the charges filed at the Regional Trial Court in Quezon City against five top officers of Nestle Philippines Inc. Its senior vice president and head legal officer took exception to some items raised in my column about the case.</span></div><div style="background-color: white; font-size: 14px; text-align: justify;"><span style="font-family: inherit;"><br />
</span></div><div style="background-color: white; font-size: 14px; text-align: justify;"><span style="font-family: inherit;">In its letter to the editor of this newspaper published last December 22, NPI claimed that the complaints of predatory pricing filed against the company by two of its former distributors have been dismissed via a resolution of the QC Prosecutor’s Office dated December 5, 2011.</span></div><div style="background-color: white; font-size: 14px; text-align: justify;"><span style="font-family: inherit;"><br />
</span></div><div style="background-color: white; font-size: 14px; text-align: justify;"><span style="font-family: inherit;">However, that claim, according to noted lawyer Lorna Patajo Kapunan, is “blatantly inaccurate and misleading.” She says that the Resolution is still the subject of a pending petition for review filed in behalf of the distributors by Kapunan Garcia and Castillo Law Offices before the Department of Justice.</span></div><div style="background-color: white; font-size: 14px; text-align: justify;"><span style="font-family: inherit;"><br />
</span></div><div style="background-color: white; font-size: 14px; text-align: justify;"><span style="font-family: inherit;">Kapunan points out that the Motion to Withdraw filed in the Regional Trial Court by the Office of the City Prosecutor of Quezon City is still pending, and the outcome of the motion has not been resolved nor granted by the presiding judge. In short, the criminal case filed against the Nestle executives still stands.</span></div><div style="background-color: white; font-size: 14px; text-align: justify;"><span style="font-family: inherit;"><br />
</span></div><div style="background-color: white; font-size: 14px; text-align: justify;"><span style="font-family: inherit;">But I must have been affected by the holiday daze when I typed out that Nestle was adjudged Employer of the Year during the Philippine Advertising Congress held early last month. “Employer” should have been “Advertiser” and there’s no question about that. Nestle did unload a huge advertising outlay to drum up its 100 years existence in the Philippines. Its prestigious presence here now stands in the balance depending on the outcome of these cases which have a direct bearing on current moves to finally introduce the long overdue Anti-Trust Law.</span></div><div style="background-color: white; font-size: 14px; text-align: justify;"><span style="font-family: inherit;"><br />
</span></div><div style="background-color: white; font-size: 14px; text-align: justify;"><span style="font-family: inherit;">*** "</span></div></div>FRR: Fight for Right!http://www.blogger.com/profile/00463752414867871669noreply@blogger.com5tag:blogger.com,1999:blog-836017545891094382.post-4085720895120398112011-12-12T20:02:00.000+08:002011-12-12T20:02:54.258+08:00ANTI-TRUST CASE AGAINST NESTLE PHILIPPINES<div dir="ltr" style="text-align: left;" trbidi="on"><div style="text-align: justify;"><b>"Impeaching Corona Not Far Behind"</b></div><div style="text-align: justify;">by Emil Jurado </div><div style="text-align: justify;">09 December 2011, To The Point, MANILA STANDARD</div><div style="text-align: justify;"><i>(Original article <a href="http://www.manilastandardtoday.com/insideOpinion.htm?f=2011/december/9/emiljurado.isx&d=2011/december/9">here</a>).</i></div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">"<span class="Apple-style-span" style="background-color: white; font-family: Arial, Helvetica, sans-serif; font-size: 14px;">***</span></div><div style="background-color: white; font-family: Arial, Helvetica, sans-serif; font-size: 14px; text-align: justify;">Some businessmen friends recently asked me about the statute of the much ballyhooed proposal for an Anti-Trust Law that would finally give teeth to Article 186 of the Revised Penal Code. This refers to prohibition from entering into or being a party to any contract or agreement, or from taking part in any conspiracy or combination in restraint of trade or commerce for the purpose of preventing by artificial means, free competition.</div><div style="background-color: white; font-family: Arial, Helvetica, sans-serif; font-size: 14px; text-align: justify;"><br />
</div><div style="background-color: white; font-family: Arial, Helvetica, sans-serif; font-size: 14px; text-align: justify;">As far as I can recall, the move to have such a law introduced received a boost last August when five top officers of the giant multinational Nestle Philippines Inc. were indicted for violation of Article 186 of the Revised Penal Code. The charges were an offshoot of complaints against Nestle by two of its distributors, Service Edge Distributors Inc. and FDI Forefront 2 Trading Corporation.</div><div style="background-color: white; font-family: Arial, Helvetica, sans-serif; font-size: 14px; text-align: justify;"><br />
</div><div style="background-color: white; font-family: Arial, Helvetica, sans-serif; font-size: 14px; text-align: justify;">The Filipino firms alleged that Nestle engaged in predatory pricing, imposition of inflexible price bulletins that resulted in luge losses to the distributors, unilateral withdrawal of promised marketing support, violation of the terms and eventual termination of the distribution agreement, perjury and offering false testimony in evidence.</div><div style="background-color: white; font-family: Arial, Helvetica, sans-serif; font-size: 14px; text-align: justify;"><br />
</div><div style="background-color: white; font-family: Arial, Helvetica, sans-serif; font-size: 14px; text-align: justify;">I suppose that hearings of the charges against Nestle officials have been scheduled at the Quezon City Regional Trial Court. Resolution of this matter will have an important bearing on the perceived overhearing conduct of multinational firms towards not only their competitors, but even to their own distributors, who are in fact their business partners. Interestingly enough, during the recently concluded Philippine Advertising Congress in Camarines Sur, Nestle Philippines was adjudged Employer of the Year. Well, the company certainly will not win an award of any kind from its distributors who feel they have been wronged.</div><div style="background-color: white; font-family: Arial, Helvetica, sans-serif; font-size: 14px; text-align: justify;"><br />
</div><div style="background-color: white; font-family: Arial, Helvetica, sans-serif; font-size: 14px; text-align: justify;">***</div></div>FRR: Fight for Right!http://www.blogger.com/profile/00463752414867871669noreply@blogger.com0tag:blogger.com,1999:blog-836017545891094382.post-58134277726559148222011-11-04T17:20:00.000+08:002011-11-04T17:20:21.039+08:00NESTLÉ PHILIPPINES, Inc. officials have been accused of fixing wholesale prices.<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<h1 style="background-color: white; color: #004276; font-family: Verdana, sans-serif, helvetica, arial; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">Nestlé officials accused of price fixing</h1><div>by N.R. Melican</div><div>BusinessWorld Online, 31 October 2011</div><div>(Original article availble online <a href="http://www.bworldonline.com/content.php?section=Corporate&title=Nestl%C3%A9-officials-accused-of-price-fixing&id=40842">here</a>).</div><div><br />
</div><br />
<br />
<br />
<h4 style="background-color: white; color: #777777; font-family: Verdana, helvetica, sans-serif, arial; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">A CITY prosecutor’s office has found probable cause to charge Nestlé Philippines, Inc. officials with price fixing after distributors complained that the local arm of the food giant required their products to be sold for a dictated cost.</h4><div><br />
</div><div><span class="Apple-style-span" style="background-color: white; color: #555555; font-family: Verdana, helvetica, sans-serif, arial; font-size: 11px;">As such, the case has been filed at the Quezon City Regional Trial Court and raffled to Branch 97 at present.</span><br style="background-color: white; color: #555555; font-family: Verdana, sans-serif, helvetica, arial; font-size: 11px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;" /><br style="background-color: white; color: #555555; font-family: Verdana, sans-serif, helvetica, arial; font-size: 11px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;" /><span class="Apple-style-span" style="background-color: white; color: #555555; font-family: Verdana, helvetica, sans-serif, arial; font-size: 11px;">In a resolution issued Aug. 15, 2011, Quezon City First Assistant City Prosecutor Meynardo M. Bautista Jr. ruled there was weight behind complaints against six officials -- former Nestlé Philippines chairman and chief executive officer (CEO) Doreswamy Nandkishore, incumbent chairman and CEO John Martin Miller, Sales Director Shahab Bachani, Chief Finance Officer Peter Noszek, and sales officials Jose Ceballos and Maria Elisa Lupena -- accused of imposing predatory prices for goods, a violation of Article 186 of the Revised Penal Code.</span><br style="background-color: white; color: #555555; font-family: Verdana, sans-serif, helvetica, arial; font-size: 11px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;" /><br style="background-color: white; color: #555555; font-family: Verdana, sans-serif, helvetica, arial; font-size: 11px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;" /><span class="Apple-style-span" style="background-color: white; color: #555555; font-family: Verdana, helvetica, sans-serif, arial; font-size: 11px;">Nestlé Philippines could not be immediately reached for comment.</span><br style="background-color: white; color: #555555; font-family: Verdana, sans-serif, helvetica, arial; font-size: 11px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;" /><br style="background-color: white; color: #555555; font-family: Verdana, sans-serif, helvetica, arial; font-size: 11px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;" /><span class="Apple-style-span" style="background-color: white; color: #555555; font-family: Verdana, helvetica, sans-serif, arial; font-size: 11px;">FDI Forefront II Trading Corp. and its parent firm Service Edge Distributors Inc. (SEDI) took issue with the price bulletins Nestlé Philippines issues to middlemen dictating the cost at which Nestlé products should be sold to retailers. Distributors are told to follow the selling prices in the bulletins or face termination of the distributorship agreement.</span><br style="background-color: white; color: #555555; font-family: Verdana, sans-serif, helvetica, arial; font-size: 11px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;" /><br style="background-color: white; color: #555555; font-family: Verdana, sans-serif, helvetica, arial; font-size: 11px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;" /><span class="Apple-style-span" style="background-color: white; color: #555555; font-family: Verdana, helvetica, sans-serif, arial; font-size: 11px;">The two firms -- which were formerly assigned to distribute Nestlé products in northwest Quezon City, Caloocan, Malabon, Navotas and Valenzuela -- claim that the price bulletins do not take into account several factors: the cost of financing for the goods, municipal business taxes, cost of bad debts for bad or poorly paying retailers, cost of discounts given to retailers and cost of bad goods.</span><br style="background-color: white; color: #555555; font-family: Verdana, sans-serif, helvetica, arial; font-size: 11px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;" /><br style="background-color: white; color: #555555; font-family: Verdana, sans-serif, helvetica, arial; font-size: 11px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;" /><span class="Apple-style-span" style="background-color: white; color: #555555; font-family: Verdana, helvetica, sans-serif, arial; font-size: 11px;">Nestlé Philippines terminated its distributorship agreement with FDI in late 2007 and that with SEDI in September 2011.</span><br style="background-color: white; color: #555555; font-family: Verdana, sans-serif, helvetica, arial; font-size: 11px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;" /><br style="background-color: white; color: #555555; font-family: Verdana, sans-serif, helvetica, arial; font-size: 11px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;" /><span class="Apple-style-span" style="background-color: white; color: #555555; font-family: Verdana, helvetica, sans-serif, arial; font-size: 11px;">The respondents countered, however, that the two distributors’ claims are baseless, saying that price fixing only occurs when multiple firms agree to set prices to restrain trade.</span><br style="background-color: white; color: #555555; font-family: Verdana, sans-serif, helvetica, arial; font-size: 11px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;" /><br style="background-color: white; color: #555555; font-family: Verdana, sans-serif, helvetica, arial; font-size: 11px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;" /><span class="Apple-style-span" style="background-color: white; color: #555555; font-family: Verdana, helvetica, sans-serif, arial; font-size: 11px;">The city prosecutor’s office decided, however, that the case was worth pursuing.</span><br style="background-color: white; color: #555555; font-family: Verdana, sans-serif, helvetica, arial; font-size: 11px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;" /><br style="background-color: white; color: #555555; font-family: Verdana, sans-serif, helvetica, arial; font-size: 11px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;" /><span class="Apple-style-span" style="background-color: white; color: #555555; font-family: Verdana, helvetica, sans-serif, arial; font-size: 11px;">“The act of Nestlé in fixing the resale price maintenance for its products… is illegal, a per se violation of paragraph 1 of Artice 186, Revised Penal Code, which means that price fixing is automatically illegal and there will be no valid justification to legitimate price fixing agreement,” the resolution read.</span><br style="background-color: white; color: #555555; font-family: Verdana, sans-serif, helvetica, arial; font-size: 11px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;" /><br style="background-color: white; color: #555555; font-family: Verdana, sans-serif, helvetica, arial; font-size: 11px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;" /><span class="Apple-style-span" style="background-color: white; color: #555555; font-family: Verdana, helvetica, sans-serif, arial; font-size: 11px;">“Even if the agreement of Nestlé and the complainants is to be analyzed under the rule of reason, the act is also unlawful because of its harmful anticompetitive effects against consumers and complainants, with no competitive economic benefits,” the resolution read further.</span><br style="background-color: white; color: #555555; font-family: Verdana, sans-serif, helvetica, arial; font-size: 11px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;" /><br style="background-color: white; color: #555555; font-family: Verdana, sans-serif, helvetica, arial; font-size: 11px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;" /><span class="Apple-style-span" style="background-color: white; color: #555555; font-family: Verdana, helvetica, sans-serif, arial; font-size: 11px;">“[This is] harmful to the consumers because Nestlé exercised monopoly power of price fixing the resale of its goods which means that consumers cannot buy the product at a lower price than that fixed by Nestlé,” it stated.</span><br style="background-color: white; color: #555555; font-family: Verdana, sans-serif, helvetica, arial; font-size: 11px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;" /><br style="background-color: white; color: #555555; font-family: Verdana, sans-serif, helvetica, arial; font-size: 11px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;" /><span class="Apple-style-span" style="background-color: white; color: #555555; font-family: Verdana, helvetica, sans-serif, arial; font-size: 11px;">The Nestlé officials could be “criminally liable,” the resolution stated. -- </span><b style="background-color: white; color: #555555; font-family: Verdana, sans-serif, helvetica, arial; font-size: 11px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">N.R. Melican</b></div></div>FRR: Fight for Right!http://www.blogger.com/profile/00463752414867871669noreply@blogger.com0tag:blogger.com,1999:blog-836017545891094382.post-2221359237053247352011-10-05T13:48:00.000+08:002011-10-05T13:48:33.636+08:00ANTI-TRUST CASE AGAINST NESTLE PHILIPPINES FILED IN RTC QC<div dir="ltr" style="text-align: left;" trbidi="on"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjOIc7sBpJ2-g9sPR2oGfg-9MdxvV0aiuOjUx1VMEmnB2jsD3ZpT_OjMCXOlErPcy7gyr-Q0F1EFlwGkfWqVlIMnzJUeFDrhMS-aVgIbuImh_SIgOTBGfg0RSOnur8WD9I_y_sCQnewtB8/s1600/is1.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjOIc7sBpJ2-g9sPR2oGfg-9MdxvV0aiuOjUx1VMEmnB2jsD3ZpT_OjMCXOlErPcy7gyr-Q0F1EFlwGkfWqVlIMnzJUeFDrhMS-aVgIbuImh_SIgOTBGfg0RSOnur8WD9I_y_sCQnewtB8/s640/is1.png" width="410" /></a></div><br />
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjAmGJRhnphaw5lv-_bVPDQeUhL-jnLkeU3tNf_tWh117FIQJTfsjTgZ-x7NBfsN0AzWfrD1PX2GvTtUuShqJqLJTRUsk1cdqdUMDVWYXPOx9JcvDg-qPbw_WbutMYWs6Q7CVdkhIgeNTM/s1600/is2.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjAmGJRhnphaw5lv-_bVPDQeUhL-jnLkeU3tNf_tWh117FIQJTfsjTgZ-x7NBfsN0AzWfrD1PX2GvTtUuShqJqLJTRUsk1cdqdUMDVWYXPOx9JcvDg-qPbw_WbutMYWs6Q7CVdkhIgeNTM/s640/is2.png" width="358" /></a></div><br />
</div>FRR: Fight for Right!http://www.blogger.com/profile/00463752414867871669noreply@blogger.com0tag:blogger.com,1999:blog-836017545891094382.post-30188854950617243522011-10-03T13:24:00.004+08:002011-10-05T13:31:08.099+08:00SEN. VILLAR CALLS FOR THE PASSAGE OF AN ANTITRUST LAW (PART 1)<div dir="ltr" style="text-align: left;" trbidi="on"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: large;"><b>"Time to pass an antitrust law"</b></span><br />
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: large;">by</span><br />
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: large;">Sen. Manny B. Villar</span><br />
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: large;">BUSINESS MIRROR, Entrepreneur, 19 September 2011</span><br />
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;"><i>(Original article available <a href="http://businessmirror.com.ph/home/opinion/16757-time-to-pass-an-antitrust-law">here</a>)</i></span><br />
<br />
<span class="Apple-style-span" style="background-color: white; color: #333333; line-height: 18px;"><span class="Apple-style-span" style="font-family: inherit; font-size: x-small;">First of two parts</span></span><br />
<span class="Apple-style-span" style="background-color: white; color: #333333; line-height: 18px;"><div class="MsoNormal" style="margin-bottom: 10px; margin-top: 10px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify;"><span class="Apple-style-span" style="font-family: inherit;">"The time is ripe for the Philippines to enact a comprehensive antitrust law. Let me tell you why.</span></div><div class="MsoNormal" style="margin-bottom: 10px; margin-top: 10px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify;"><span class="Apple-style-span" style="font-family: inherit;">First, the global financial crisis of 2008, which plunged two-thirds of the world into recession and which continues to threaten the developed economies, has shifted the flow of capital into emerging markets, such as the Philippines, which are now leading economic growth and offering better returns for investments.</span></div><div class="MsoNormal" style="margin-bottom: 10px; margin-top: 10px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify;"><span class="Apple-style-span" style="font-family: inherit;">The Philippines can expect a bigger share of foreign investments as a result of this shift in capital flow because of its strategic location. It is close to China, which is aggressively investing in other countries not only to make money but to ensure adequate supplies of raw materials and intermediate goods for its own industries.</span></div><div class="MsoNormal" style="margin-bottom: 10px; margin-top: 10px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify;"><span class="Apple-style-span" style="font-family: inherit;">Second, the volatility in the prices of essential goods like oil and other food commodities, which must be imported. We have to import rice because of our inability to produce enough rice for domestic consumption. We also have to import wheat (for flour) because we don’t grow this cereal.</span></div><div class="MsoNormal" style="margin-bottom: 10px; margin-top: 10px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify;"><span class="Apple-style-span" style="font-family: inherit;">Third, there are so few players in many of our industries, providing the temptation and the environment for the operation of cartels and monopolies.</span></div><div class="MsoNormal" style="margin-bottom: 10px; margin-top: 10px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify;"><span class="Apple-style-span" style="font-family: inherit;">The hearings conducted by the Senate Committee on Economic Affairs, of which I’m chairman, and the Committee on Trade and Commerce, on several bills and a resolution proposing the enactment of an antitrust law underscored the relevance and the urgency of such legislation.</span></div><div class="MsoNormal" style="margin-bottom: 10px; margin-top: 10px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify;"><span class="Apple-style-span" style="font-family: inherit;">In particular, Senate Resolution 123, which I introduced, expresses concern about the undue advantage that cartels and monopolies pose over our micro, small and medium enterprises.</span></div><div class="MsoNormal" style="margin-bottom: 10px; margin-top: 10px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify;"><span class="Apple-style-span" style="font-family: inherit;">During the hearings, Trade and Industry Undersecretary Adrian Cristobal stressed that a competition or antitrust law would promote investments and facilitate trade between the Philippines and other countries. Attorney Lorna Patajo-Kapunan explained that antitrust provisions could be found in existing laws like the Revised Penal Code, New Civil Code and the Consumer Act of the Philippines.</span></div><div class="MsoNormal" style="margin-bottom: 10px; margin-top: 10px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify;"><span class="Apple-style-span" style="font-family: inherit;">However, these provisions do not provide for clear-cut guidelines or evidence to determine whether an act constitutes unfair competition, monopolistic behavior or restraint of trade.</span></div><div class="MsoNormal" style="margin-bottom: 10px; margin-top: 10px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify;"><span class="Apple-style-span" style="font-family: inherit;">Attorney Anthony Abad, managing director of the Trade Advisory Services of the Ateneo Center for International Economic Law, said it was fortunate that the 15th Congress was prioritizing the antitrust bill, enactment of which would have a transformative effect on the way business is done in the country.</span></div><div class="MsoNormal" style="margin-bottom: 10px; margin-top: 10px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify;"><span class="Apple-style-span" style="font-family: inherit;">The Constitution itself provides the basis for the enactment of an anti-trust law. Under Article XII, Section 19, the state is mandated to “regulate or prohibit monopolies when public interest so requires” and disallows “combinations in restraint of trade or unfair competition.” Section 22 of the same article provides: “Acts which circumvent or negate any of the provisions of this article shall be considered inimical to the national interest and subject to criminal and civil sanctions, as may be provided by law.”</span></div><div class="MsoNormal" style="margin-bottom: 10px; margin-top: 10px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify;"><span class="Apple-style-span" style="font-family: inherit;">Monopolies exist when one major company has enough power to dictate the prices, quality and selection of products and services, thereby becoming very powerful because competitions are not big enough to threaten that company.</span></div><div class="MsoNormal" style="margin-bottom: 10px; margin-top: 10px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify;"><span class="Apple-style-span" style="font-family: inherit;">On the other hand, a cartel is a group of companies producing the same product or service which, instead of competing with each other, agree to jointly control the price or supply of their common product or service, to the detriment of consumers.</span></div><div class="MsoNormal" style="margin-bottom: 10px; margin-top: 10px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify;"><span class="Apple-style-span" style="font-family: inherit;">Since consumers have no other product choices, monopolies or cartels can increase or decrease prices at will. In the end, the people who suffer most are those who already have low purchasing power like the minimum-wage earners or small entrepreneurs.</span></div><div class="MsoNormal" style="margin-bottom: 10px; margin-top: 10px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify;"><span class="Apple-style-span" style="font-family: inherit;">To this day, the Philippines does not have a comprehensive and developed legislation relating to antitrust and monopoly activities.</span></div><div class="MsoNormal" style="margin-bottom: 10px; margin-top: 10px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify;"><span class="Apple-style-span" style="font-family: inherit;">We need a comprehensive law that will give meaning to the principles of fair market and discourage monopolies, to afford our micro, small and medium enterprises the opportunity to participate in the growth of our economy.</span></div><div class="MsoNormal" style="margin-bottom: 10px; margin-top: 10px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify;"><span class="Apple-style-span" style="font-family: inherit;">The Senate Committees on Economic Affairs and on Trade and Commerce have come up with a draft bill, which consolidates Senate Bill 1 introduced by Senate President Juan Ponce Enrile together with Senators Ralph Recto and Antonio Trillanes; Senate Bill 123 by Sen. Serge Osmeña; Senate Bill 1838 by Sen. Miriam Santiago and my Senate Resolution 123.</span></div><div class="MsoNormal" style="margin-bottom: 10px; margin-top: 10px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify;"><span class="Apple-style-span" style="font-family: inherit;">The consolidated measure, when enacted into law, will encourage competition in the marketplace, help reduce prices and increase the quality of products or services for the benefit of consumers."</span></div><div class="MsoNormal" style="margin-bottom: 10px; margin-top: 10px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify;"><br />
</div><div class="MsoNormal" style="margin-bottom: 10px; margin-top: 10px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify;"><br />
</div></span></div>FRR: Fight for Right!http://www.blogger.com/profile/00463752414867871669noreply@blogger.com0tag:blogger.com,1999:blog-836017545891094382.post-58415291325765736122011-10-03T13:16:00.000+08:002011-10-05T13:24:39.083+08:00MORE ON THE COMPETITION AUTHORITY<div dir="ltr" style="text-align: left;" trbidi="on"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: large;"><b>"DOJ as competition authority"</b></span><br />
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: large;">by</span><br />
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: large;">Lito U. Gagni</span><br />
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: large;">BUSINESS MIRROR, Market Files, 20 September 2011</span><br />
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;"><i>(Original article available <a href="http://businessmirror.com.ph/home/opinion/16809-doj-as-competition-authority">here</a>)</i></span><br />
<br />
<span class="Apple-style-span" style="font-family: inherit;">"<span class="Apple-style-span" style="background-color: white; color: #333333; line-height: 18px;">CAN the Department of Justice (DOJ) pursue a similar line of complaint that the US DOJ advocated against a looming merger between AT&T and T-Mobile on issues of dominance that is now the subject of a controversy involving Philippine Long Distance Telephone Co. (PLDT) and Digital Telecom, which owns Sun Cellular? This merger issue, we believe, is at the heart of an executive order that sought to make DOJ as a competition authority.</span></span><br />
<span class="Apple-style-span" style="background-color: white; color: #333333; line-height: 18px;"><div class="MsoNormal" style="margin-bottom: 10px; margin-top: 10px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify;"><span class="Apple-style-span" style="font-family: inherit;">As of yesterday, the state attorneys general of New York, Washington, California, Illinois, Massachusetts, Ohio and Pennsylvania have joined the US Justice Department in its suit against the proposed acquisition by AT&T of T-Mobile.</span></div><div class="MsoNormal" style="margin-bottom: 10px; margin-top: 10px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify;"><span class="Apple-style-span" style="font-family: inherit;">One needs only to look at what is happening in the US to determine that the proposed acquisition by PLDT of Sun Cellular would mean a 70-percent control of the frequency, the digital roadway, which smacks of dominance and goes against the grain of letting competition dictate the tempo of the business game. This is why it is important to look at what’s happening in the US in the business of telcos to know that PLDT’s acquisition of Sun would have the same impact as that of AT&T’s on T-Mobile and should, therefore, be an occasion for the DOJ to pursue its mandate as the competition authority.</span></div><div class="MsoNormal" style="margin-bottom: 10px; margin-top: 10px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify;"><span class="Apple-style-span" style="font-family: inherit;">No less than President Aquino sounded the alarm on the return of the monopolies. Remember that it was during the dark days of the monopoly of PLDT when 98 percent of the population was waiting for a line and 2<span> </span>percent<span> </span>was waiting for a dial tone. This quotable quote from Singapore’s Lee Kwan Yew was what possibly moved then-President Fidel V. Ramos to open the telco industry to other players.</span></div><div class="MsoNormal" style="margin-bottom: 10px; margin-top: 10px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify;"><span class="Apple-style-span" style="font-family: inherit;">That opening of the telecom industry to other players is what allowed the Philippines to become an investment destination and now we are reaping the benefits of that Ramos vision to rid the sector of the monopolistic situation. As a result, thousands of jobs were created, with the business-process outsourcing industry leading the way. It is thus unfortunate to know that the telco sector is again being threatened by the PLDT-Sun deal. Perhaps, the DOJ can look at the options open to prevent a repeat of the problem. For starters, it may want to google the AT&T-T-Mobile deal and discover how US state attorneys are doing it.</span></div><div class="MsoNormal" style="margin-bottom: 10px; margin-top: 10px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify;"><span class="Apple-style-span" style="font-family: inherit;">xxx"</span></div><div class="MsoNormal" style="margin-bottom: 10px; margin-top: 10px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify;"><br />
</div></span></div>FRR: Fight for Right!http://www.blogger.com/profile/00463752414867871669noreply@blogger.com0tag:blogger.com,1999:blog-836017545891094382.post-72660196168584275672011-09-30T13:11:00.001+08:002011-10-05T13:15:20.694+08:00POINT OF LAW: ANTI-TRUST WORTHY?<div dir="ltr" style="text-align: left;" trbidi="on"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: large;"><b>"Is It Antitrust Worthy?"</b></span><br />
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: large;">by</span><br />
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: large;">Francis Ed Lim</span><br />
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: large;">PHILIPPINE DAILY INQUIRER, Point of Law, 15 September 2011</span><br />
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;"><i>(Original article available <a href="http://business.inquirer.net/19233/is-it-antitrust-worthy">here</a>)</i></span><br />
<br />
<div style="text-align: justify;"><span class="Apple-style-span" style="font-family: inherit;">"<span class="Apple-style-span" style="background-color: white; line-height: 17px;">Since President Aquino mentioned a new antitrust law in his first State of the Nation Address, much work has been done on the antitrust bills filed in Congress.</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: inherit;"><span class="Apple-style-span" style="background-color: white; line-height: 17px;"><br />
</span></span></div><span class="Apple-style-span" style="background-color: white; line-height: 17px;"><span class="Apple-style-span" style="font-family: inherit;"><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">Legislative hearings have been concluded and proponents say that after decades of waiting (since the Eighth Congress, I’m told), we will finally have a unified, up-to-date and comprehensive antitrust or competition law. </div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;"><br />
</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">What are antitrust laws? Antitrust or competition laws are laws that regulate and maintain market competition by prohibiting or regulating anti-competitive behavior. Three acts that antitrust laws normally seek to prohibit are monopolies, cartel-like behavior and abuse of dominant market position.</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">In an economic sense, antitrust laws are in place to promote a freer market and more open trade, which will result in substantial efficiency and welfare gains for everyone.</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;"><strong style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; vertical-align: baseline;">A hot topic</strong></div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">The proposed acquisition of Digitel by PLDT has sparked even more interest on an antitrust law for the country. Globe, a competitor, argues that the transaction will lead to PLDT controlling close to 70 percent of the market and will eventually lead to higher prices and rates. However, PLDT and Digitel maintain that the deal will result in continued “unli” benefits, to use telco lingo, for consumers.</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">Aside from the PLDT-Digitel deal, Nestlé has its own antitrust controversy: Allegedly, it has been engaging in predatory pricing to drive out competition from the market. Expectedly, Nestlé contends that its products are not the cheapest in the market and that competition among lower-priced products remains intense.</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">Justice Secretary Leila de Lima also had reportedly ordered a review of antitrust cases filed against Fraport AG (Fraport), a German company, and its local partner Philippine International Air Terminals Co. (Piatco), in connection with the Ninoy Aquino International Airport Terminal 3.</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">Interestingly, perhaps in an attempt to respond to these antitrust controversies, the President issued Executive Order No. 45, which created an Office of the Competition Authority in the Department of Justice, to help enforce our antitrust laws.</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;"><strong style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; vertical-align: baseline;">Current law</strong></div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">This is not to say that our country has no antitrust laws at all. From myriad sources of law, one can find snippets of an anti-competition framework that serves as some sort of precedent for the current bill.</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">Foremost is Article XII, Section 19, of the Constitution, which mandates the State to regulate or prohibit monopolies when required by public interest and at all times to prohibit combinations in restraint of trade and other unfair competition practices.</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">There are implementing pieces of legislation, like the Revised Penal Code which, in Article 186, punishes monopolies and combinations in restraint of trade.</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">Meanwhile, the Civil Code under Article 28 authorizes the collection of damages arising from unfair competition in agricultural, industrial or commercial enterprises or in labor.</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">There are other laws that attempt to penalize anti-competition activities. However, with very few exceptions, many of these laws have but skeletal provisions and do not provide meaningful guidance to the market on how our competition policy should be implemented.</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">Salient features</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">What is clear from the bills (at least after the Senate and House committee hearings) is that they do not prohibit monopolies per se, perhaps taking their cue from the Constitution and our Asean neighbors.</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">At the core of the bills are more detailed provisions on anti-competitive agreements (like price-fixing, market allocation), abuse of dominant position (like predatory pricing), anti-competitive mergers and more detailed enforcement mechanism.</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">Unlike its Senate counterpart, the House version proposes to create a five-man Philippine Competition Commission as a single venue for anti-competition issues. Similarly, the House version proposes to adopt non-adversarial methods of enforcement, like a request for binding ruling to make the law more business-friendly.</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;"><strong style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; vertical-align: baseline;">Anti-antitrust law</strong></div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">There are, of course, those who are against an antitrust law. Some economists argue that the need for an antitrust law stems from the wrongful notion that an unhindered and unregulated market leads to coercive monopolies. They assert that no unfair monopoly can ever be created by means of free trade in a free market economy.</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">Surely, there are policy issues yet to be decided in the plenary sessions of both Houses before an antitrust law becomes part of our statute books.</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">A basic policy issue, of course, is whether we really need a new antitrust law. If so, do we adopt the American system or the European model? What acts should be outlawed and what type of enforcement mechanism should be adopted considering the stage of our economic development? Should the law go for a separate competition commission or just create an office in the DoJ? How should the competition authority interface with other government agencies, like the Department of Energy, Department of Trade and the Securities and Exchange Commission on antitrust-related matters that, by law, are currently under their jurisdiction?</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">The big question is, whether a new antitrust law will finally see the light of day or will the bills suffer the same fate as the preceding measures?</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">Your guess is as good as mine.</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;"><em style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; vertical-align: baseline;">(The author, formerly the president and CEO of the Philippine Stock Exchange, is now the co-<a class="kLink" href="http://business.inquirer.net/19233/is-it-antitrust-worthy#" id="KonaLink3" style="background-attachment: initial !important; background-clip: initial !important; background-color: transparent !important; background-image: none !important; background-origin: initial !important; border-bottom-color: transparent !important; border-bottom-style: none !important; border-bottom-width: 0px !important; border-color: initial; border-left-color: transparent !important; border-left-style: none !important; border-left-width: 0px !important; border-right-color: transparent !important; border-right-style: none !important; border-right-width: 0px !important; border-style: initial; border-top-color: transparent !important; border-top-style: none !important; border-top-width: 0px !important; bottom: 0px; color: blue !important; cursor: pointer; display: inline !important; font-variant: normal; left: 0px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: none; outline-width: initial; padding-bottom: 0px !important; padding-left: 0px !important; padding-right: 0px !important; padding-top: 0px !important; position: static; right: 0px; text-decoration: underline !important; text-transform: none !important; top: 0px; vertical-align: baseline;"><span style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; color: blue !important; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; position: static; vertical-align: baseline;"><span class="kLink" style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: none; background-origin: initial; border-bottom-color: initial; border-bottom-style: solid; border-bottom-width: 1px; border-color: initial; border-left-color: initial !important; border-left-style: none !important; border-left-width: 0px !important; border-right-color: initial !important; border-right-style: none !important; border-right-width: 0px !important; border-style: initial; border-top-color: initial !important; border-top-style: none !important; border-top-width: 0px !important; color: blue !important; display: inline !important; float: none !important; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 1px !important; padding-left: 0px !important; padding-right: 0px !important; padding-top: 0px !important; position: static; vertical-align: baseline; width: auto !important;">managing</span><span class="kLink" style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: none; background-origin: initial; border-bottom-color: initial; border-bottom-style: solid; border-bottom-width: 1px; border-color: initial; border-left-color: initial !important; border-left-style: none !important; border-left-width: 0px !important; border-right-color: initial !important; border-right-style: none !important; border-right-width: 0px !important; border-style: initial; border-top-color: initial !important; border-top-style: none !important; border-top-width: 0px !important; color: blue !important; display: inline !important; float: none !important; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 1px !important; padding-left: 0px !important; padding-right: 0px !important; padding-top: 0px !important; position: static; vertical-align: baseline; width: auto !important;">partner</span></span></a> and head of the corporate and special projects department of Accralaw. He may be contacted at felim@accralaw.com.)"</em></div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;"><em style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; vertical-align: baseline;"><br />
</em></div></span></span></div>FRR: Fight for Right!http://www.blogger.com/profile/00463752414867871669noreply@blogger.com16tag:blogger.com,1999:blog-836017545891094382.post-38784969580331014632011-09-18T23:56:00.000+08:002011-09-18T23:56:00.931+08:00Nestle execs face trial<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgN2mhFv9tjPTv-AKVcIYCZ4OSLDWMZx66pO1JGZjtDuETR9bSUYoP-UQM87YYJ1BHNKS46blO8aBvoxlmJ1yW7ZGzK7GomMXjA-ZyJp5k6MFYUWxB5pG2UUPjIPx2GppRYGLCqYrTIDJE/s1600/manila+standard-sept9.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" rba="true" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgN2mhFv9tjPTv-AKVcIYCZ4OSLDWMZx66pO1JGZjtDuETR9bSUYoP-UQM87YYJ1BHNKS46blO8aBvoxlmJ1yW7ZGzK7GomMXjA-ZyJp5k6MFYUWxB5pG2UUPjIPx2GppRYGLCqYrTIDJE/s640/manila+standard-sept9.jpg" width="418" /></a></div>FRR: Fight for Right!http://www.blogger.com/profile/00463752414867871669noreply@blogger.com0tag:blogger.com,1999:blog-836017545891094382.post-85531722081900196422011-09-18T23:47:00.000+08:002011-09-18T23:47:09.582+08:00<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;"><strong>"A Climate of Uncertainty"</strong></span><br />
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;">by Emil Jurado</span><br />
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;">MANILA STANDARD, To The Point, 06 September 2011</span><br />
<em><span style="font-family: Arial, Helvetica, sans-serif;">(Original article available </span><a href="http://www.manilastandardtoday.com/insideOpinion.htm?f=2011/september/6/emiljurado.isx&d=2011/september/6"><span style="font-family: Arial, Helvetica, sans-serif;">here</span></a><span style="font-family: Arial, Helvetica, sans-serif;">)</span></em><br />
<br />
<div style="text-align: justify;">"***</div><div style="text-align: justify;"></div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Calls for the passage of an effective and all-embracing anti-trust law in the country appear to have received renewed interest in the wake of a resolution handed down by the Office of the Quezon City Prosecutor in a case filed against multi-national Nestle Philippines Inc.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">In an August 15 resolution, City Prosecutor Donald Lee approved the recommendation of First Assistant City Prosecutor Meynardo Bautista Jr. that charges be filed in court against high officials and executives of NPI for violation of Article 186 of the Revised Penal Code.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">This particular provision contains a prohibition against entering into, or being a party to, any contract or agreement, or from taking part in any conspiracy or combination in restraint of trade or commerce, for the purpose of preventing by artificial means, free competition.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Those recommended for indictment are NPI chairman and CEO John Martin Miller, Chief Finance Office Peter Oszek, Business Executive Manager Shahab Bacani, Regional Sales Manager Jose Ceballos and Area Sales Manager Elisa Lupena.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">***</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">The case stemmed from complaints filed against Nestle by service Edge Distributors Inc. and FDU Forefront II Trading Corp. (FDI 2), two Filipino firms serving as distributors of Nestle products in Metro Manila. </div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">The allegations against Nestle include predatory pricing, violation of the terms of distribution agreement between Nestle and the two distributors, unjust termination of the said agreement, imposition of inflexible price bulletins that resulted in huge losses to the distributors, unilateral withdrawal of promised marketing support, perjury and offering false testimony in evidence.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Investigations established the existence of a vertical agreement between Nestle and its distributors, wherein the former fixes the resale price of the products. The agreement compels the distributors to sell the goods only at the price dictated by Nestle, otherwise, their distributorship contract will be revoked.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">The resolution also said that the respondents, who were then officials of Nestle Philippines, Inc., knowingly committed the crime or permitted or failed to prevent the commission of the said crime. Hence, they are criminally liable.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Nestle was also accused of fixing the resale price of its products and imposing upon its distributors that these prices be maintained. This is in violation of Article 18 of the Revised Penal Code, which says that price fixing is automatically illegal and there will be no valid justification to legitimate price-fixing agreement.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">If I may read between the lines, I would say that the resolution represents a triumph not only of the two Filipino distributors, but also of the common Filipino consumer. <strong>This case sends a strong message to other multinationals that their abusive practices will not be tolerated. Significantly, it also encourages similarly situated Filipino distributors and marketing outfits that they can rely on the government to uphold and to protect their rights</strong>."</div>FRR: Fight for Right!http://www.blogger.com/profile/00463752414867871669noreply@blogger.com1tag:blogger.com,1999:blog-836017545891094382.post-72542569996064384122011-09-18T23:41:00.001+08:002011-09-18T23:43:03.829+08:00NESTLE PHILIPPINES: MONSTER MNC<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;"><strong>"MONSTER MNC IS 100"</strong></span><br />
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;">by Ducky Paredes</span><br />
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;">MALAYA, Business Insight, 05 September 2011</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><em>(Original article available </em></span><a href="http://www.malaya.com.ph/sep05/edducky.html"><span style="font-family: Arial, Helvetica, sans-serif;"><em>here</em></span></a><span style="font-family: Arial, Helvetica, sans-serif;"><em>)</em></span><br />
<br />
<div style="text-align: justify;">"PEOPLE and multinational corporations both have birthdays but with a big difference. Humans tend to become kinder as they approach the end of their time on earth; multinationals get to be more powerful and, as their reach expands, more dominant, exploitative and even criminally abusive. Not all, of course; as with humans, there are good and bad multinationals.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">One multinational celebrated its hundredth year recently by bullying and throwing its weight around to the detriment, not just of its competitors, but also even of its own business partners. </div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">At last, the multinational is getting its comeuppance. For starters, the force of the law, imperfect as it is in this country, seems to be working against the multinational. A judge is looking them over and entertaining complaints filed by Pinoys who were abused by the MNC and forced into a state of near-bankruptcy. </div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">There is even more trouble due the MNC in the form of bills pending in the Senate and the House of Representatives intended to improve current laws against monopolistic behavior, predatory pricing and restraint of trade, sponsored by Senate President Juan Ponce Enrile, Senator Sergio Osmeña and Representative Rufus Rodriguez. .</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">The giant multinational, which is Nestle Philippines, Inc. (NPI), just turned 100 recently. Nestle, as with most other MNCs, celebrated its longevity by launching corporate social responsibility (CSR) projects backed up by lavish advertisements in print, radio, television and cinema showing how the multinational has been a good corporate citizen. In the case of Nestle in the Philippines, one wonders whether this the true picture of the company.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">NPI’s festivities were somewhat rained on when the Office of the City Prosecutor of Quezon City issued a resolution on August 15 finding sufficient evidence to hold NPI for trial for violation of Article 186 of the Revised Penal Code. </div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">This article penalizes any person "who shall enter into any contract or agreement or shall take part in any conspiracy or combination in the form of a trust or otherwise, which results in restraint of trade or commerce and prevents, by artificial means, free competition in the market." </div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">The resolution found merit in the complaint filed by Nestle distributors FDI Forefront II Trading Corporation and Service Edge Distributors, Inc. that their agreements with Nestle were anti-competitive since they were obligated to sell Nestle products at the price fixed by NPI, regardless of the fact that the set price provided too thin a margin for the distributors to make a profit. Failure by the distributors to sell under these terms would result in the unilateral termination of their agreement with NPI. Their complaint pointed to a situation when NPI forced them to sell to a set of customers at a loss because of the fixed price set by NPI. </div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">According to the QC Prosecutor’s resolution, "the act of Nestle in fixing the resale price maintenance for its products, imposing it on complainant is illegal, a per se violation of paragraph 1 of Article 186, Revised Penal Code which means that price fixing is automatically illegal and there will be no valid justification to legitimate price fixing agreement."</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">The resolution further stated that an analysis of the agreement shows that the act is also unlawful "because of its harmful anti-competitive effects against consumers and complainants, with no competitive economic benefits. Harmful to the consumers because Nestle exercised monopoly power of price fixing, the resale of its goods which means that consumers cannot buy the product at a lower price than that fixed by Nestle."</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">High ranking NPI executives, former Chief Executive Officer Doreswamy Nandkishore, current CEO John Martin Miller, Shahab Bahcani and Peter Noszek were impleaded for conspiring to commit anti-competitive acts as they were found to have knowingly committed the crime or to have permitted or failed to prevent the commission of the crime, and will stand trial before a Regional Trial Court of Quezon City.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">The resolution is a welcome development, not only to the complainants, but to those who support the passage of an Anti-Trust Law, coming as it does on the heels of President Noynoy Aquino’s signing of Executive Order No. 45 giving full jurisdiction to the Department of Justice over matters related to competition and fair trade practices. </div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Lawyer Lorna P. Kapunan recalled the president’s assurance that the matter of monopolies and corporate bullying tactics was one of the first issues that he would look into. "His signing that E.O. shows that he is taking active steps to back up his promise," Kapunan said. </div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Nestle insiders say that the top honchos in the company’s main office in Switzerland are closely monitoring the woes that the local hundred-year-old outfit is experiencing. The rift between NPI and its distributors was reportedly on the agenda when the mother company’s chief executive Paul Burke and executive vice president Frits Van Dijk came all the way from Switzerland to meet with NPI officials (and also incidentally, to participate in the company’s centennial celebration). </div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Will the mother company in Switzerland do anything to convert the image of the centenarian company into a more grandfatherly one in its dealings with its business partners or will Nestle continue to exhibit the worst traits of a MNC monster?"</div>FRR: Fight for Right!http://www.blogger.com/profile/00463752414867871669noreply@blogger.com7tag:blogger.com,1999:blog-836017545891094382.post-61645318737862030432011-09-18T23:37:00.000+08:002011-09-18T23:37:33.364+08:00The DOJ Anti-Trust Mandate from PNoy<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;"><strong>Globe urges DOJ to follow lead of US counterpart in telecom deal </strong></span><br />
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;"></span><br />
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;">by Mary Ann Ll. Reyes</span><br />
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;">Philippine Star, 05 September 2011</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><em>(Original article available <a href="http://www.philstar.com/Article.aspx?publicationSubCategoryId=66&articleId=723771">here</a>)</em></span><br />
<br />
<div style="text-align: justify;">"MANILA, Philippines - Globe Telecom has urged the Department of Justice (DOJ), which has recently been named by President Aquino as Competition Authority, to follow the lead of its US counterpart in opposing a planned merger that will create a monopoly in the telecommunications market.</div><div style="text-align: justify;"></div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">According to Globe corporate communications head Yoly Crisanto, “government intervention is necessary to ensure that there is a level playing field and allow healthy competition to boost the quality of services for the benefit of consumers.”</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">But PLDT dismissed Globe’s assertion, saying that the legal and factual contexts of these cases are different. “Our view is the Digitel transaction complies with Philippine law and will serve the public interest through better and more affordable telecom services in more areas of the country,” PLDT spokesperson Ramon Isberto said.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">The US Justice Department has filed a civil antitrust lawsuit at the US District Court in Washington against AT&T for its $39 billion purchase of T-Mobile USA, a move described by industry observers as raising the stakes in antitrust jurisprudence.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Crisanto said this development is seen as a welcome input to the Aquino administration’s strong anti-monopoly stance which is incidentally aligned with his “matuwid na daan” or a straight path approach to issues involving corruption and the protection and promotion of public interest. </div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Based on Associated Press reports, the US Justice Department believed that the proposed merger would “stifle competition and lead to higher wireless prices, less innovation and fewer choices for consumers” and these were reiterated in a news conference by Deputy Attorney General James Cole, saying that the merger would result in “tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for mobile wireless services.”</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Globe said the AT&T, T-Mobile merger, under review by the Federal Communications Commission, bears a striking resemblance to the local PLDT-Digitel merger which is likewise under review by the Philippine regulator, the National Telecommunications Commission (NTC).</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Between AT&T and T-Mobile, the merger will compete nationwide in 97 of the 100 largest cellular marketing areas.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Globe noted that the PLDT-Digitel merger, on the other hand, will give it 70 percent of the total market and excess frequencies at a ratio of 4.5 vs. 1 of Globe.</div><div style="text-align: justify;"></div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">AT&T is being accused of “hoarding spectrum”, sitting on top of a 700MHz spectrum acquired in 2008 auctions and its Advanced Wireless Services spectrum to roll out 4G LTE service. AT&T is said to be planning to cover 97 percent of the US population with 4G service if the merger is approved.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">The AT&T purchase of T-Mobile, however, was alleged to have been a move to solve its spectrum issues brought about by the surge in mobile broadband use. In fact, this issue of acquiring additional frequencies by merging is the target of investigation set by one of the famous ’50 questions’ asked by the FCC of AT&T.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Globe pointed out that consistent with his anti-monopoly position, President Aquino said, when asked in an interview about the PLDT case at the NTC, that “our interest here is to ensure that there is no monopoly and that we promised a level-playing field, and about 85 million mobile-phone users can’t be tied to one provider.”</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Last June 9 this year, President Aquino signed Executive Order 45 designating the DOJ as the Competition Authority.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">He created the Office for Competition under the Office of the Secretary of Justice <strong>“to carry out duties and responsibilities such as the investigation of all cases involving violations of competition laws and the prosecution of violators to prevent, restrain and punish monopolization, cartels and combinations in restraint of trade as well as enforce competition policies and laws to protect consumers from abusive, fraudulent or harmful corrupt business practices.”</strong></div>FRR: Fight for Right!http://www.blogger.com/profile/00463752414867871669noreply@blogger.com0tag:blogger.com,1999:blog-836017545891094382.post-77105266886784528652011-09-18T23:30:00.001+08:002011-09-18T23:30:59.322+08:00PEOPLE V. NESTLE<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;"><strong>"People v.Nestle"</strong></span><br />
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;">by Horacio Paredes</span><br />
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;">Abante, 03 September 2011</span><br />
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;"><em>(Original article available <a href="http://abante.com.ph/issue/sep0311/op_hp.htm">here</a>)</em></span><br />
<br />
<div style="text-align: justify;">"Tila nagbunga na rin ang pagsisikap ng dalawang kumpanyang Pinoy na mabigyan ng katarungan ang pagmamalabis at pang-aaping dinanas ng mga ito sa kamay ng isang dayuhang multi-national. </div><div style="text-align: justify;"></div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Lumabas na rin ang Resolusyon ng Office of the City Prosecutor ng Quezon City tungkol sa mga kasong isinampa ng Service Edge Distribution, Inc. (SEDI) at ng FDI Forefront II Trading Corporation (FDI 2) laban sa Nestle Philippines, Inc.(NPI).</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Ang kaso ay tungkol sa predatory pricing na ipinatutupad ng Nestle kaugnay ng pagbebenta ng iba’t ibang produkto nito. Sa ilalim ng mga patakaran ng Nestle Philippines, ang mga distributor ng kumpanya ay hindi maaring magbenta ng mga produkto sa presyong labas sa idinidikta ng Nestle, kahit na maging dahilan ito sa kanilang pagkalugi.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Ang mga nasakdal ay sina Nestle Chairman at CEO John Martin Miller, Chief Financial Officer Peter Noszek, Business Executive Manager Shahab Bacani, Regional Sales Manager Jose Ceballos, Area Sales Manager Elisa Lupena at dating Chairman at CEO Noreswamy Nandkishore. </div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Sinabi ni First Assistant City Prosecutor Meynardo M. Bautista Jr. na may sapat na ebidensya upang dalhin ang kaso sa hukuman. </div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Ayon kay Bautista, may nagawang paglabag ang Nestle sa Article 186 ng Revised Penal Code na nagsisilbing batas ng Pilipinas hinggil sa isyu ng anti-trust practices. Ang nabanggit na artikulo ng Kodigo Penal ay nagtatakda ng sumusunod:</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">“Any person who shall enter into any contract or agreement or shall take part in any conspiracy or combination in the form of trust or otherwise, in restraint of trade or commerce to prevent by artificial means free competition in the market.” </div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Ang paglabag ay kaugnay sa mga ipinatutupad ng Nestle na mga limitasyon sa presyo ng mga produkto nito, sa mga gawaing pumipigil sa malayang kalakalan at nagbibigay-daan para mangibabaw ang monopolyo, kasama na ang kapangyarihang magtakda ng mga presyo at pigilan o harangan ang mga karibal sa negosyo sa isang partikular na lugar.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Lumabas sa imbestigasyon na may kasunduan ang Nestle at ang dalawang distributors kung saan itinakda ng NPI ang mga presyo na dapat sundin ng mga distributors. Inobliga ng NPI ang SEDI at FDI 2 na ibenta lamang ang mga produkto nito sa itinakdang mga presyo, kasabay ng bantang pawawalang-saysay ang distributorship agreement kapag ‘di sila sumunod.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Sinabi ni Bautista na ang ginawang ito ng NPI ay ilegal at isang paglabag sa Paragraph 1 ng Article 186 ng Revised Penal Code. Aniya, ilegal din ang nangyaring price fixing at walang sapat na katwiran upang maging lehitimo ang pagtatakda ng mga presyong nabanggit.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Ang kasunduan sa pagitan ng dalawang panig, ani Bautista, ay labag sa interes hindi lamang ng dalawang distributors kundi pati na ng mga consumers o mamimili. Wala rin aniyang benepisyong ekonomiko na matatamo rito.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Ayon kay Bautista, ang mga isinakdal, na mga responsableng opisyal ng Nestle Philippines, ay hayagang isinagawa ang krimen, o pinayagang mangyari ito, o nabigong pigilan ang nasabing krimen, kaya mayroon silang pananagutan dito.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Inirekomenda ni Bautista na ipaghaharap ng sakdal sa korte ang mga nabanggit na opisyal ng NPI bunsod ng reklamong inihain ng FDI Forefront II Trading Corporation. Ang rekomendasyong ito ay inaprubahan at sinang-ayunan ni City Prosecutor Donald T. Lee. </div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Matinding dagok sa Nestle Philippines ang naging pasiya ng Quezon City Prosecutor’s Office. Panay pa naman ang papogi ng Nestle sa telebisyon at sa mga pahayagan kaugnay ng katatapos pa lamang na selebrasyon ukol sa nakaraang 100th Anniversary nito sa Pilipinas. Parang binagyo ang parada ng Nestle.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Sa kabilang dako, pinawalang-saysay naman ang sakdal ng Service Edge Distributors, Inc. sa dahilang ang negosyo ng Service Edge ay sumasaklaw lamang sa Caloocan, Malabon, Navotas at Valenzuela na pawang nasa labas ng Quezon City. Kaya walang hurisdiksyon ang Quezon City Prosecutors Office sa kaso.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Gayun pa man, napag-alaman na puwede pa ring magsampa ng demanda ang Service Edge sa piskalya ng alin sa mga lugar na sumasaklaw ng operasyon nito. Hindi pa ligtas ang mga nasabing opisyal ng Nestle sa demanda ng Service Edge kapag ito ay iharap ng distributor sa tamang korte.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">* * *"</div>FRR: Fight for Right!http://www.blogger.com/profile/00463752414867871669noreply@blogger.com1tag:blogger.com,1999:blog-836017545891094382.post-23942998708397785882011-09-01T20:25:00.001+08:002011-09-01T20:25:55.185+08:00Nestle to stand trial in Quezon City for anti-competitive acts<div class="MsoNormal" style="text-align: justify;"><span style="font-family: Arial; font-size: 11.5pt;">In light of all the debates and discussions on anti-trust practices revolving around the PLDT-Smart-Sun deal, another giant multinational, Nestle Philippines, Inc. (NPI) is actually going to be held for trial for criminal violation of anti-competition provisions</span><span style="font-family: Helvetica;">.</span><span style="font-family: Arial; font-size: 11.5pt;"></span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: Arial; font-size: 11.5pt;">On 15 August 2011, the Office of the City Prosecutor of Quezon City issued a resolution finding that there is sufficient evidence to hold NPI for trial for violation of Article 186 of the Revised Penal Code, which penalizes any person who shall enter into any contract or agreement, or shall take part in any conspiracy or combination in the form of a trust or otherwise, which results in restraint of trade or commerce and prevents by artificial means free competition in the market. </span></div><div class="MsoNormal" style="text-align: justify; text-indent: 0.5in;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: Arial; font-size: 11.5pt;">High-ranking officers of NPI, namely Doreswamy Nandkishore (former CEO), John Martin Miller (current CEO), Shahab Bachani and Peter Noszek were impleaded for conspiring to commit anti-competitive acts. The resolution found that NPI’s practice of resale price maintenance constituted price-fixing which results in exclusion of competition in a particular market. </span></div><div class="MsoNormal" style="text-align: justify; text-indent: 0.5in;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: Arial; font-size: 11.5pt;">Since current anti-trust bills are still pending in Senate, the OCP made reference to the US Sherman Act which considers resale price maintenance as illegal per se. According to the resolution, the vertical agreement existing between NPI and its distributors, FDI Forefront II Trading Corporation and Service Edge Distributors, Inc., was anti-competitive since Nestle fixed the resale price of its products, while its distributors were obligated to sell Nestle products only at the price fixed by NPI. Apparently, failure by the distributors to sell the products at the prices fixed by NPI would result in the unilateral termination of their distributorship agreement by NPI. The price fixing was found to be harmful to consumers because it meant that consumers cannot buy the product at a lower price than that fixed by NPI.</span></div><div class="MsoNormal" style="text-align: justify; text-indent: 0.5in;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span style="font-family: Arial; font-size: 11.5pt;">This practice of price-fixing by NPI was deemed as a violation of Paragraph 1 of Article 186 of the Revised Penal Code. Nandkishore, Miller, Bachani and Noszek were found to have knowingly committed the crime or to have permitted or failed to prevent the commission of the crime. The NPI officers will stand trial before a Regional Trial Court of Quezon City.</span><br />
<span style="font-family: Arial; font-size: 11.5pt;"><br />
</span></div>FRR: Fight for Right!http://www.blogger.com/profile/00463752414867871669noreply@blogger.com2tag:blogger.com,1999:blog-836017545891094382.post-38866565979419668552011-08-31T20:04:00.021+08:002011-09-01T20:21:24.165+08:00Antitrust Law Center Forum<div style="font-family: inherit; text-align: center;"><span style="font-size: small;"><span> The young lawyers advocating the passage of anti-trust legislation held an anti-trust forum on 31 August 2011 at Pasay AB Function Room of the Makati Shangri-la at 11:00 a.m. The form was called “Bastardization of the Philippine Economy: A Primer on Anti-trust Legislation.” </span></span></div><div style="font-family: inherit; text-align: center;"><br />
</div><div class="separator" style="clear: both; font-family: inherit; text-align: center;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhCufwHpOasIM5aUaZzN0BZKCBuCe1Lux7A0UxL_MTGI_m14u4r3wVSnRcnvd95v5yQnr_L6A5mcLXY15Havl4Gel-IXxLmIbweEJnEl8l9RVrqiLXlpbiPQ8FB-mCMW8oQQMXuxQNU4lc/s1600/forum1.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="298" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhCufwHpOasIM5aUaZzN0BZKCBuCe1Lux7A0UxL_MTGI_m14u4r3wVSnRcnvd95v5yQnr_L6A5mcLXY15Havl4Gel-IXxLmIbweEJnEl8l9RVrqiLXlpbiPQ8FB-mCMW8oQQMXuxQNU4lc/s400/forum1.jpg" width="400" /></a></span></div><div style="font-family: inherit; text-align: center;"><span style="font-size: small;">The forum was organized by the <a href="http://antitrustlawcenter.blogspot.com/">Antitrust Law Center</a>/Young Lawyers In Support of Antitrust Law (YLSAT).</span></div><div style="font-family: inherit; text-align: center;"><span style="font-size: small;"><br />
</span></div><div style="font-family: inherit; text-align: center;"><span style="font-size: small;">The two main resource speakers were again Atty. Lorna Kapunan and Atty. Anthony Abad.</span></div><div style="font-family: inherit; text-align: center;"><span style="font-size: small;"><br />
</span></div><div class="separator" style="clear: both; font-family: inherit; text-align: center;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhCy1PKAd2fXbkQspqQHrv6Ol_iyvsvnudfXTXtWuRt2gstODxheGTwxRLiHRhAIK7NiTLCh0jMjbe5h7TOa7meoT7LP_-X3WYfHgF0F0LtrC82FUAUkRlnxJAQrDeJEcKcf8IkDr4wDRo/s1600/forum2.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="298" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhCy1PKAd2fXbkQspqQHrv6Ol_iyvsvnudfXTXtWuRt2gstODxheGTwxRLiHRhAIK7NiTLCh0jMjbe5h7TOa7meoT7LP_-X3WYfHgF0F0LtrC82FUAUkRlnxJAQrDeJEcKcf8IkDr4wDRo/s400/forum2.jpg" width="400" /></a></span></div><div style="font-family: inherit; text-align: center;"><span style="font-size: small;"><span>Atty. Lorna Kapunan spoke on manifestations of monopolies, unfair competition, restraint of trade and price manipulation in the Philippines. </span></span></div><div style="font-family: inherit; text-align: center;"><span style="font-size: small;"><span><br />
</span></span></div><div class="separator" style="clear: both; font-family: inherit; text-align: center;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhWx0VEAMGCuTyE7-4Josvte1rIeWYl3tulVlknUrsF_DnzrAegGqM8fef6S_gFpjRV08eDjRaoZwmcAnoiyKCQxN8-IIE_YDGZHPXCj82dLnCjfILblFEtlffc1mFjpiHJuPA9jABvYoQ/s1600/forum3.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="298" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhWx0VEAMGCuTyE7-4Josvte1rIeWYl3tulVlknUrsF_DnzrAegGqM8fef6S_gFpjRV08eDjRaoZwmcAnoiyKCQxN8-IIE_YDGZHPXCj82dLnCjfILblFEtlffc1mFjpiHJuPA9jABvYoQ/s400/forum3.jpg" width="400" /></a></span></div><div style="font-family: inherit; text-align: center;"><span style="font-size: small;">Atty. Abad discussed different anti-trust regulations and competition policies in various Asian countries.</span></div>FRR: Fight for Right!http://www.blogger.com/profile/00463752414867871669noreply@blogger.com0tag:blogger.com,1999:blog-836017545891094382.post-55354191790085812992011-08-11T14:10:00.000+08:002011-08-11T14:10:51.206+08:00Time for Anti-Trust?<div style="text-align: justify;"><span style="font-family: Times New Roman;"><span style="font-size: large;"><span style="font-size: 12pt;"><b><u>“MAPping the Future” Column in INQUIRER – 1 August 2011 </u></b></span></span></span> </div><div style="text-align: justify;"> <span style="font-size: medium;"><span style="font-family: Calibri,Verdana,Helvetica,Arial;"><span style="font-size: 10pt;"> </span></span></span> </div><div style="text-align: justify;"> <span style="font-size: large;"><span style="font-family: Times New Roman;"><span style="font-size: 12pt;"> <br />
</span><span style="font-size: 14pt;">Time for Anti-Trust?<br />
</span><span style="font-size: 12pt;">by Ronald U. Mendoza </span></span></span> </div><div style="text-align: justify;"> <span style="font-size: medium;"><span style="font-family: Calibri,Verdana,Helvetica,Arial;"><span style="font-size: 10pt;"> </span></span></span> </div><div style="text-align: justify;"> <span style="font-size: large;"><span style="font-family: Times New Roman;"><span style="font-size: 12pt;"></span></span></span><span style="font-size: medium;"><span style="font-family: Calibri,Verdana,Helvetica,Arial;"><span style="font-size: 10pt;"></span></span></span><span style="font-size: medium;"><span style="font-family: Calibri,Verdana,Helvetica,Arial;"><span style="font-size: 10pt;"></span></span></span><span style="font-size: large;"><span style="font-family: Times New Roman;"><span style="font-size: 12pt;"><br />
Lee Kwan Yew once quipped that in the Philippines, 99 percent of the population waited for a phone line, while the remaining 1 percent waited for a dial tone. While this jab was directed at our telecoms sector, Lee could have just as easily poked at the rest of our monopolized and highly regulated industries then.<br />
<br />
Sweeping market-oriented reforms in the mid-1990s were designed to change this. Deregulation and privatization would get the inefficient and costly government out of key sectors it had no business being in, and instead draw-in competitive, innovative and much more efficient private sector actors who would in turn compete for market share by providing better services at lower prices. Deregulation would enhance competition, in turn promoting the necessary investments to boost innovation and competitiveness. This would ultimately lead to increasing consumer welfare and taxpayers’ benefits, by lowering the number of loss-making and inefficient government owned and controlled corporations. <br />
<br />
Are consumers (and taxpayers) really any better off today, well over a decade after this deregulation wave? Did competition and competitiveness really increase? Telecommunications, petroleum, and air travel are three industries that are particularly illustrative of the range of outcomes. There are some gains, but also evidence of emerging challenges to promote competition and safeguard consumer welfare.<br />
</span></span></span> </div><div style="text-align: center;"> <span style="font-family: Times New Roman;"><span style="font-size: medium;"><span style="font-size: 10pt;"><b>Table 1. Summary of Selected Industry Information </b></span></span></span> </div><div style="text-align: center;"> <span style="font-family: Times New Roman;"><span style="font-size: large;"><span style="font-size: 12pt;"> </span></span></span> </div><div style="text-align: center;"> <span style="font-family: Times New Roman;"><span style="font-size: medium;"><span style="font-size: 10pt;"> <b>Telecommunications</b></span></span><span style="font-size: large;"><span style="font-size: 12pt;"> </span></span><span style="font-size: medium;"><span style="font-size: 10pt;"><b>Petroleum</b></span></span><span style="font-size: large;"><span style="font-size: 12pt;"> </span></span><span style="font-size: medium;"><span style="font-size: 10pt;"><b>Airlines</b></span></span><span style="font-size: large;"><span style="font-size: 12pt;"> <br />
</span></span><span style="font-size: medium;"><span style="font-size: 10pt;"><b>Year of Deregulation</b></span></span><span style="font-size: large;"><span style="font-size: 12pt;"> </span></span><span style="font-size: medium;"><span style="font-size: 10pt;">1995</span></span><span style="font-size: large;"><span style="font-size: 12pt;"> </span></span><span style="font-size: medium;"><span style="font-size: 10pt;">1998</span></span><span style="font-size: large;"><span style="font-size: 12pt;"> </span></span><span style="font-size: medium;"><span style="font-size: 10pt;">1995</span></span><span style="font-size: large;"><span style="font-size: 12pt;"> <br />
</span></span><span style="font-size: medium;"><span style="font-size: 10pt;"><b>Companies before Deregulation</b></span></span><span style="font-size: large;"><span style="font-size: 12pt;"> </span></span><span style="font-size: medium;"><span style="font-size: 10pt;">PLDT</span></span><span style="font-size: large;"><span style="font-size: 12pt;"> </span></span><span style="font-size: medium;"><span style="font-size: 10pt;">Shell, Petron and Caltex</span></span><span style="font-size: large;"><span style="font-size: 12pt;"> </span></span><span style="font-size: medium;"><span style="font-size: 10pt;">Philippine Airlines (PAL)</span></span><span style="font-size: large;"><span style="font-size: 12pt;"> <br />
</span></span><span style="font-size: medium;"><span style="font-size: 10pt;"><b>Companies after Deregulation</b></span></span><span style="font-size: large;"><span style="font-size: 12pt;"> </span></span><span style="font-size: medium;"><span style="font-size: 10pt;">PLDT (Smart; Talk N’Text-Piltel; Red Mobile-Cure and Sun-Digitel) and Globeb</span></span><span style="font-size: large;"><span style="font-size: 12pt;"> </span></span><span style="font-size: medium;"><span style="font-size: 10pt;">Shell, Petron, Caltex, SeaOil, Flying V, Total, Jetti, City Oil and UniOil</span></span><span style="font-size: large;"><span style="font-size: 12pt;"> </span></span><span style="font-size: medium;"><span style="font-size: 10pt;">PAL, Cebu Pacific, SEAir, Air Philippines, and ZestAir</span></span><span style="font-size: large;"><span style="font-size: 12pt;"> <br />
</span></span><span style="font-size: medium;"><span style="font-size: 10pt;"><b>Herfindahl-Hirschman Competition Indicatora</b></span></span><span style="font-size: large;"><span style="font-size: 12pt;"> </span></span><span style="font-size: medium;"><span style="font-size: 10pt;">(Higher values reflect more market concentration; Date or event in parentheses)</span></span><span style="font-size: large;"><span style="font-size: 12pt;"> </span></span><span style="font-size: medium;"><span style="font-size: 10pt;"> Mobile Telephony:</span></span><span style="font-size: large;"><span style="font-size: 12pt;"> </span></span></span><span style="font-size: medium;"><span style="font-family: Symbol;"><span style="font-size: 10pt;">·</span></span></span><span style="font-size: xx-small;"><span style="font-family: Times New Roman;"><span style="font-size: 7pt;"> </span></span></span><span style="font-family: Times New Roman;"><span style="font-size: medium;"><span style="font-size: 10pt;">10000 (1994)</span></span><span style="font-size: large;"><span style="font-size: 12pt;"> </span></span></span><span style="font-size: medium;"><span style="font-family: Symbol;"><span style="font-size: 10pt;">·</span></span></span><span style="font-size: xx-small;"><span style="font-family: Times New Roman;"><span style="font-size: 7pt;"> </span></span></span><span style="font-family: Times New Roman;"><span style="font-size: medium;"><span style="font-size: 10pt;">4020 (prior to PLDT-Digitel merger)b</span></span><span style="font-size: large;"><span style="font-size: 12pt;"> </span></span></span><span style="font-size: medium;"><span style="font-family: Symbol;"><span style="font-size: 10pt;">·</span></span></span><span style="font-size: xx-small;"><span style="font-family: Times New Roman;"><span style="font-size: 7pt;"> </span></span></span><span style="font-family: Times New Roman;"><span style="font-size: medium;"><span style="font-size: 10pt;">5800 (after PLDT-Digitel merger)c</span></span><span style="font-size: large;"><span style="font-size: 12pt;"> </span></span><span style="font-size: medium;"><span style="font-size: 10pt;"> Landlines:</span></span><span style="font-size: large;"><span style="font-size: 12pt;"> </span></span></span><span style="font-size: medium;"><span style="font-family: Symbol;"><span style="font-size: 10pt;">·</span></span></span><span style="font-size: xx-small;"><span style="font-family: Times New Roman;"><span style="font-size: 7pt;"> </span></span></span><span style="font-family: Times New Roman;"><span style="font-size: medium;"><span style="font-size: 10pt;">10000 (1994)</span></span><span style="font-size: large;"><span style="font-size: 12pt;"> </span></span></span><span style="font-size: medium;"><span style="font-family: Symbol;"><span style="font-size: 10pt;">·</span></span></span><span style="font-size: xx-small;"><span style="font-family: Times New Roman;"><span style="font-size: 7pt;"> </span></span></span><span style="font-family: Times New Roman;"><span style="font-size: medium;"><span style="font-size: 10pt;">3253 (prior to PLDT-Digitel merger)b</span></span><span style="font-size: large;"><span style="font-size: 12pt;"> </span></span></span><span style="font-size: medium;"><span style="font-family: Symbol;"><span style="font-size: 10pt;">·</span></span></span><span style="font-size: xx-small;"><span style="font-family: Times New Roman;"><span style="font-size: 7pt;"> </span></span></span><span style="font-family: Times New Roman;"><span style="font-size: medium;"><span style="font-size: 10pt;">4479 (after PLDT-Digitel merger)c</span></span><span style="font-size: large;"><span style="font-size: 12pt;"> </span></span><span style="font-size: medium;"><span style="font-size: 10pt;"> 3427 (1996)d</span></span><span style="font-size: large;"><span style="font-size: 12pt;"> </span></span><span style="font-size: medium;"><span style="font-size: 10pt;">2846 (2010)d</span></span><span style="font-size: large;"><span style="font-size: 12pt;"> </span></span><span style="font-size: medium;"><span style="font-size: 10pt;"> Domestic:</span></span><span style="font-size: large;"><span style="font-size: 12pt;"> </span></span></span><span style="font-size: medium;"><span style="font-family: Symbol;"><span style="font-size: 10pt;">·</span></span></span><span style="font-size: xx-small;"><span style="font-family: Times New Roman;"><span style="font-size: 7pt;"> </span></span></span><span style="font-family: Times New Roman;"><span style="font-size: medium;"><span style="font-size: 10pt;">10000 (1994)</span></span><span style="font-size: large;"><span style="font-size: 12pt;"> </span></span></span><span style="font-size: medium;"><span style="font-family: Symbol;"><span style="font-size: 10pt;">·</span></span></span><span style="font-size: xx-small;"><span style="font-family: Times New Roman;"><span style="font-size: 7pt;"> </span></span></span><span style="font-family: Times New Roman;"><span style="font-size: medium;"><span style="font-size: 10pt;">3680 (2010)</span></span><span style="font-size: large;"><span style="font-size: 12pt;"> </span></span><span style="font-size: medium;"><span style="font-size: 10pt;"> International: </span></span></span><span style="font-size: medium;"><span style="font-size: 10pt;"><span style="font-family: Symbol;">·</span></span></span><span style="font-size: xx-small;"><span style="font-family: Times New Roman;"><span style="font-size: 7pt;"> </span></span></span><span style="font-family: Times New Roman;"><span style="font-size: medium;"><span style="font-size: 10pt;">2548 (2010)e</span></span><span style="font-size: large;"><span style="font-size: 12pt;"> </span></span></span> </div><div style="text-align: center;"><div style="text-align: center;"> <span style="font-family: Times New Roman;"><span style="font-size: medium;"><span style="font-size: 10pt;">Notes:</span></span></span><br />
<span style="font-family: Times New Roman;"><span style="font-size: medium;"><span style="font-size: 10pt;"> a Herfindahl-Hirschman Index prior to and after deregulation, with year in parenthesis. The HHI it is the sum of the squared market shares of the each company in the industry. The index approximates the value zero when the industry has more firms with similar size. A higher value therefore signals potentially weaker competition and more concentration in the industry. For illustration, the US Department of Justice, Federal Trade Commission characterizes an HHI of 1500 and below as “unconcentrated”, 1500-2500 as “moderately concentrated” and 2500 and above as “highly concentrated”. </span></span></span><br />
<span style="font-family: Times New Roman;"><span style="font-size: medium;"><span style="font-size: 10pt;"> b Shares prior to PLDT-Digitel merger.</span></span></span><br />
<span style="font-family: Times New Roman;"><span style="font-size: medium;"><span style="font-size: 10pt;"> c Assuming PLDT-Digitel merger.</span></span></span><br />
<span style="font-family: Times New Roman;"><span style="font-size: medium;"><span style="font-size: 10pt;"> d Data from the Department of Energy.</span></span></span><br />
<span style="font-family: Times New Roman;"><span style="font-size: medium;"><span style="font-size: 10pt;"> e Data from the Center for Asia Pacific Aviation (2010); and based on passenger capacity, including international flights.</span></span></span></div><span style="font-family: Times New Roman;"><span style="font-size: medium;"><span style="font-size: 10pt;"></span></span></span></div><div style="text-align: justify;"><span style="font-family: Times New Roman;"><span style="font-size: medium;"><span style="font-size: 10pt;"> </span></span><span style="font-size: large;"><span style="font-size: 12pt;"> <br />
<br />
<b><i>Telecommunications<br />
</i></b></span></span></span><span style="font-size: medium;"><span style="font-family: Calibri,Verdana,Helvetica,Arial;"><span style="font-size: 10pt;"> </span></span></span> </div><div style="text-align: justify;"> <span style="font-size: large;"><span style="font-family: Times New Roman;"><span style="font-size: 12pt;"> </span></span></span> </div><div style="text-align: justify;"> <span style="font-size: large;"><span style="font-family: Times New Roman;"><span style="font-size: 12pt;">The telecommunications industry was deregulated in the early 1990s, but PLDT remained a dominant player due to its control over most landlines. This was further reinforced in 1998, when First Pacific (owner of Smart) bought control of PLDT (also owner of Piltel), and these companies accounted for a combined share of 68 percent of the cellular telephone subscribers and 43 percent of the installed lines. Competition between PLDT-Smart and Globe kept pricing steady for text messaging, so in real terms (i.e. accounting for inflation), the price of text messaging declined over time, even as it was kept at PhP1 per text message. In 2003, Sun Cellular of Digital Telecommunications Philippines Inc. (Digitel) entered the mobile telecommunications market offering product innovations like “unli” (unlimited) calls and text messaging. While initially challenged by the industry incumbents through the National Telecommunications Commission (NTC), the NTC upheld Sun Cellular’s entry and it eventually provoked similar product innovations among the incumbents. </span></span></span> </div><div style="text-align: justify;"> <span style="font-size: large;"><span style="font-family: Times New Roman;"><span style="font-size: 12pt;"> </span></span></span> </div><div style="text-align: justify;"> <span style="font-size: medium;"><span style="font-family: Calibri,Verdana,Helvetica,Arial;"><span style="font-size: 10pt;"> </span></span></span> </div><div style="text-align: justify;"> <span style="font-size: large;"><span style="font-family: Times New Roman;"><span style="font-size: 12pt;"> </span></span></span> </div><div style="text-align: justify;"> <span style="font-size: large;"><span style="font-family: Times New Roman;"><span style="font-size: 12pt;">Intense competition among these companies generated a wider array of product options for consumers, with ever more competitive pricing schemes fitting different consumer preferences. Well over 80 percent of the population now has access to mobile telephony—a far cry from the times when it took over a decade to get a landline from PLDT. </span></span></span> </div><div style="text-align: justify;"> <span style="font-size: large;"><span style="font-family: Times New Roman;"><span style="font-size: 12pt;"> </span></span></span> </div><div style="text-align: justify;"> <span style="font-size: medium;"><span style="font-family: Calibri,Verdana,Helvetica,Arial;"><span style="font-size: 10pt;"> </span></span></span> </div><div style="text-align: justify;"> <span style="font-size: large;"><span style="font-family: Times New Roman;"><span style="font-size: 12pt;"> </span></span></span> </div><div style="text-align: justify;"> <span style="font-size: large;"><span style="font-family: Times New Roman;"><span style="font-size: 12pt;">However, the recent acquisition of Digitel by PLDT raises questions about the state of market concentration in the industry, and in turn, what this might mean for continued product innovation, competitiveness and consumer welfare. A virtual duopoly will emerge from this deal, with PLDT and its affiliates accounting for about 70 percent of the mobile phone market, and Globe serving the remaining 30 percent. Despite deregulation, barriers to enter the industry, including separate franchise requirements for each telecommunications sector and limits to foreign participation (40 percent cap), prevent further enhanced competition. </span></span></span> </div><div style="text-align: justify;"> <span style="font-size: large;"><span style="font-family: Times New Roman;"><span style="font-size: 12pt;"> </span></span></span> </div><div style="text-align: justify;"> <span style="font-size: medium;"><span style="font-family: Calibri,Verdana,Helvetica,Arial;"><span style="font-size: 10pt;"> </span></span></span> </div><div style="text-align: justify;"> <span style="font-size: large;"><span style="font-family: Times New Roman;"><span style="font-size: 12pt;"> </span></span></span> </div><div style="text-align: justify;"> <span style="font-size: large;"><span style="font-family: Times New Roman;"><span style="font-size: 12pt;"><b><i>Petroleum </i></b></span></span></span> </div><div style="text-align: justify;"> <span style="font-size: large;"><span style="font-family: Times New Roman;"><span style="font-size: 12pt;"> </span></span></span> </div><div style="text-align: justify;"> <span style="font-size: medium;"><span style="font-family: Calibri,Verdana,Helvetica,Arial;"><span style="font-size: 10pt;"> </span></span></span> </div><div style="text-align: justify;"> <span style="font-size: large;"><span style="font-family: Times New Roman;"><span style="font-size: 12pt;"> </span></span></span> </div><div style="text-align: justify;"> <span style="font-size: large;"><span style="font-family: Times New Roman;"><span style="font-size: 12pt;">Deregulated in 1998, the downstream oil industry was initially comprised of three players: Caltex Philippines (now the marketing and distributing company under Chevron), Pilpinas Shell, and Petron (then jointly owned by the state-owned Philippine National Oil Company and Saudi Aramco). Today there are several more gasoline suppliers, including the original three plus SeaOil, Flying V, Total, Jetti, City Oil and UniOil. <br />
<br />
Unleaded gasoline was about PhP12 per liter while diesel gasoline was about PhP8 per liter during the deregulation—these recently reached peaks of about PhP60 and PhP45, respectively. Are these dramatic price increases due to deregulation? Recent analysis by the UAP and SGV suggests that, in fact, local pump prices have not gone up as fast as international indicators for crude oil and its refined products. Further, the stock prices of oil companies such as Petron and Shell do not appear to show any marked improvements during the period of study from 2005-2008, when prices at the pump were on an upward trend. <br />
<br />
Our own empirical analysis at AIM also shows that much of the change in gas prices at the pump since the deregulation was accounted for by international price movements. In fact, after correcting for the influence of international prices and a measure of industry competition, gas prices on the margin before and after deregulation are not statistically different. This suggests that while deregulation is not to blame for the dramatic rise in gas prices, it did not seem to change industry pricing either. Indeed, even as they are now also competing in retail, food and shopping options, the three main industry players still dominate—their combined market share still stands at about 77 percent.<br />
<br />
<b><i>Airlines<br />
</i></b> <br />
The civil aviation industry in the Philippines was dominated by PAL until the government finally opened this sector in 1995. Following the entry of new airlines like Cebu Pacific, Air Philippines and Asian Spirit (now ZestAir), PAL’s market share was cut in half, declining from 96 percent in 1995 to about 49 percent in 1999. PAL nevertheless remains a dominant player in the market with about 50 percent market share in recent years, but Cebu Pacific has captured significant ground, accounting for about 30 percent market share.<br />
<br />
Deregulation brought about a surge in domestic air travel in the country, thanks to more flights and more competitive pricing. The Manila-Iloilo route alone experienced an 83 percent increase in the number of travelers just two years after deregulation. Passengers from Manila to Davao and from Manila to Cebu also shot up by 45 percent and 34 percent, respectively, during this period. <br />
<br />
More attractive pricing clearly played a role in successfully contesting market share from PAL. There is also evidence that PAL restricted output—and this was quickly undone by the entry of more players. A recent empirical study suggests that average airfares are about 10 percent lower after liberalization, and that up to 90 percent of domestic airline passengers benefited from lower fares. <br />
<br />
The industry is not without challenges, however. Competition did improve for the most profitable routes, but the less profitable routes (or so-called missionary routes) could be left behind. PAL used to serve these routes through a cross-subsidy between the more profitable and less profitable destinations. However, with the break-up of its monopoly, and the apparent focus of the new entrants on the more profitable routes, up to 11 markets formerly served by PAL have lost airline service.<br />
<br />
Airport infrastructure is also still inadequate. In addition, even as new domestic firms have shown their competitiveness relative to the once monopoly incumbent, there are some concerns that these same firms may be hard-pressed to compete at the international level, notably once the country opens up to ASEAN competitors as part of the country’s “open skies” policy. Industry experts already forecast the Philippines could be a key battleground for low cost carriers in the region, including AirAsia (Malaysia) and Tiger Airways (Singapore) once Philippine skies have been opened up.<br />
<b><br />
<i>Promoting Competition and Competitiveness<br />
</i> <br />
</b>The preceding examples provide some evidence of consumer gains from deregulation. However, they also flag critical issues, including the possible need to maintain healthy competition levels, and also competitiveness, across Philippine industries. Indeed the indicator of competition used widely by international regulators—the Herfindahl-Hirschman index (HHI) —suggests that the potential for abuse of market power is still present in all three industries examined here (see table 1). Since the HHI for these industries are well above 2500, according to the guidelines of the US Department of Justice and the Federal Trade Commission, they would all be described as “highly concentrated.”<br />
<br />
Some market consolidation has also already begun to take place. Indeed, if we were to draw from guidelines on competition policy presently applied in the United States or in the EU, the PLDT-Digitel merger would automatically raise a red flag and trigger closer scrutiny by regulatory authorities, as the worsening of industry concentration indicators could indicate a rise in market power and possibly open the door to anti-competitive behavior. <br />
<br />
In addition, pricing behavior and product/service strategies remain largely unexamined. Further market liberalization will also introduce challenges to some industries. Regulatory authorities will need to catch up with these developments, utilizing international good practices, including more robust analytical frameworks and technical analyses to strengthen regulatory oversight over these evolving industries. <br />
<br />
Deregulation does not mean that the government should be absent—only that its role be re-focused. Markets can also malfunction, and industries could end up consolidating in ways that undermine competition, innovation and ultimately also competitiveness. It is up to regulatory authorities to facilitate healthy competition and improved competitiveness, in order to safeguard consumer welfare. That in turn requires professional and technically equipped regulatory institutions with true independence and real capacity to exercise their mandate. Given the growing importance of anti-trust issues both nationally and internationally, more effective and coherent competition law and policy will be necessary.<br />
<b> <br />
</b></span></span></span><span style="font-family: Times New Roman;"><span style="font-size: medium;"><span style="font-size: 11pt;"><i> </i></span></span></span> </div><div style="text-align: justify;"> <span style="font-family: Times New Roman;"><span style="font-size: large;"><span style="font-size: 12pt;"> </span></span></span> </div><div style="text-align: justify;"> <span style="font-family: Times New Roman;"><span style="font-size: medium;"><span style="font-size: 11pt;"><i>(The article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines. The author is Associate Professor of Economics at the Asian Institute of Management, and Executive Director of the AIM Policy Center. Prior to joining AIM, he was a senior economist with the United Nations in New York. Feedback at map@globelines.com.ph. For previous articles, please click </i></span></span></span> </div><div style="text-align: justify;"> <span style="font-family: Times New Roman;"><span style="font-size: large;"><span style="font-size: 12pt;"> </span></span></span> </div><div style="text-align: justify;"> <span style="font-family: Times New Roman;"><span style="font-size: medium;"><span style="font-size: 11pt;"><i><a href="http://map.org.ph/members/mappingthefuture.php?dir=MAPping%20the%20Future%20%3Chttp://map.org.ph/members/mappingthefuture.php?dir=MAPping%20the%20Future" rel="nofollow" target="_blank"><http: map.org.ph="" mappingthefuture.php?dir="MAPping%20the%20Future" members=""><http: map.org.ph="" mappingthefuture.php?dir="MAPping%20the%20Future" members=""></http:></http:></a> >).</i></span></span></span></div>FRR: Fight for Right!http://www.blogger.com/profile/00463752414867871669noreply@blogger.com0tag:blogger.com,1999:blog-836017545891094382.post-79137707782790418152011-07-22T11:42:00.000+08:002011-07-22T11:42:05.610+08:00ADB supports SMEs<div style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: large;"><b>"Asian Development Bank backs support for MSMEs in Phl"</b></span></div><div style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: large;">by Ted Torres</span></div><div style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: large;">Published 21 July 2011, The Philippine Star</span></div><i>(Original article available online <a href="http://www.philstar.com/Article.aspx?publicationSubCategoryId=66&articleId=708208">here</a>).</i><br />
<br />
<div style="text-align: justify;">"MANILA, Philippines - The Asian Development Bank (ADB) said the Philippine government should redirect its support to the micro-, small and medium enterprises (MSMEs) instead of continuing to favor large corporations.</div><div style="text-align: justify;"><br />
</div><div> </div><div style="text-align: justify;">In a report, the ADB also said the Aquino government should continue to pursue the Public-Private Partnership (PPP) program, especially in the infrastructure sector.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;"> </div><div style="text-align: justify;">The ADB report highlighted that one of the constraints for growth is the “disconnect” between large companies and the MSMEs.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;"> </div><div style="text-align: justify;">“One constraint is the bias for large companies (mostly in the export industry) and domestic SMEs, many of which do not prosper due to lack of capital, unreliable supply chains, and weak demand for their output,” it said.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;"> </div><div style="text-align: justify;">The report urges the government to help MSMEs by lowering the cost of doing business. This can be done by improving infrastructure; streamlining and removing excess administrative procedures; and creating a fair competitive environment through anti-trust laws and good business practices.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;"> </div><div style="text-align: justify;">“The inability of MSMEs to provide efficient and cost-effective support to large firms on the one hand, and the lack of demand from large firms for such support from MSMEs, on the other hand, present a vicious cycle that debilitates the sector,” the report said, adding that the vertical integration of MSMEs into large enterprises has been less successful in the Philippines than in countries like Germany and Japan.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;"> </div><div style="text-align: justify;">The report also said the Philippines critically needed better infrastructure as well as technical expertise to help move the economy.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;"> </div><div style="text-align: justify;">Socioeconomic Planning Secretary Cayetano Paderanga, a former professor at the University of the Philippines’ School of Economics and author of the report, said the PPP program in the Philippines have typically been shunned by business because of unclear policy and regulatory frameworks, a cumbersome government approval process, and a lack of bankable projects. Other impediments, such as controversial judicial decisions, have also constrained PPP growth.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">To encourage partnerships, the government should improve transparency in PPP project selection, provide better accounting of revenues and expenditures, and have a higher-profile anti-corruption drive, he added.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;"> </div><div style="text-align: justify;">“The success of reforms in both rules and administrative processes and infrastructure support is expected to result in higher foreign direct investments and an increase in fixed capital,” the report added.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;"> </div><div style="text-align: justify;">Meanwhile, ADB country director for the Philippines Neeraj Jain said it makes concrete proposals to realize the potential contribution of the private sector to inclusive economic growth in the Philippines.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;"> </div><div style="text-align: justify;">“We are gratified that these proposals have contributed to the policy directions embedded in the Philippine Development Plan for 2011-2016,” Jin said."</div>FRR: Fight for Right!http://www.blogger.com/profile/00463752414867871669noreply@blogger.com0tag:blogger.com,1999:blog-836017545891094382.post-482452211306470762011-07-14T10:30:00.000+08:002011-07-14T10:30:53.015+08:00Anti-trust crusaders hail EO45<div style="font-family: Arial,Helvetica,sans-serif; text-align: justify;"><b><span style="font-size: large;">"Anti-trust crusaders hail Aquino order"</span></b></div><div style="font-family: Arial,Helvetica,sans-serif; text-align: justify;"><span style="font-size: large;">Published 12 July 2011 in Malaya</span></div><div style="font-family: Arial,Helvetica,sans-serif; text-align: justify;"><i>(Original article available online <a href="http://www.malaya.com.ph/july12/news12.html">here</a>).</i></div><div style="text-align: justify;"></div><div class="titlemain" style="text-align: justify;"> <h1></h1></div><div> </div><div style="text-align: justify;">"The Young Lawyers in Support of Antitrust Law, together with a number of Filipino distributors and lawyer-anti-trust crusader Lorna P. Kapunan, hailed the signing by President Aquino of Executive Order No. 45 which gives full jurisdiction to the Department of Justice (DOJ) over matters related to competition and fair trade practices.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;"> </div><div style="text-align: justify;">"President Aquino assured Filipinos that the matter of monopolies and corporate bullying tactics was one of the first issues that he would look into. By signing this executive order, he has shown that he is taking active steps to back up that promise," Kapunan said.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;"> </div><div style="text-align: justify;">EO 45 creates the Office for Competition (OC) whose mandate is to investigate and prosecute all anti-trust violations. </div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;"> </div><div style="text-align: justify;">The OC is also tasked to "enforce competition policies and laws to protect consumers" and "supervise competition in the markets by ensuring that prohibitions and requirements of competition laws are adhered to." </div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;"> </div><div style="text-align: justify;">The OC must likewise "monitor and implement measures to promote transparency and accountability in markets" and "prepare, publish and disseminate studies and reports on competition to inform and guide the industry and consumers."</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;"> </div><div style="text-align: justify;">Kapunan said with EO 45, "Filipino entrepreneurs beleaguered by unfair business practices of giant conglomerates will now know exactly where they should seek help." </div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;"> </div><div style="text-align: justify;">"Now that it is clear which agency has jurisdiction, I am certain that more Filipino distributors will take action against exploitation by multinationals," she said. </div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;"> </div><div style="text-align: justify;">A number of pending legislative bills are in collaboration with EO 45, most of which are intended to improve current laws on monopolistic behavior, predatory pricing, and the restraint of trade. </div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;"> </div><div style="text-align: justify;">There is Senate Bill No. 1 ("The Competition Act of 2010") authored by Senate President Juan Ponce Enrile, and Senate Bill No. 123 ("The Fair Trade Act of 2010") authored by Sen. Sergio Osmeña. </div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;"> </div><div style="text-align: justify;">There are 12 anti-trust bills in the House of Representatives, among them House Bill No. 4835 ("The Philippine Fair Competition Act of 2011") authored by Rep. Rufus Rodriguez."</div><div style="text-align: justify;"><br />
</div>FRR: Fight for Right!http://www.blogger.com/profile/00463752414867871669noreply@blogger.com0tag:blogger.com,1999:blog-836017545891094382.post-1658478582238315902011-07-07T21:41:00.000+08:002011-07-07T21:41:39.873+08:00Lawyer's take on the new competition authority<div style="text-align: justify;"><b>"Why a new competition authority out of the blue?"</b></div><div style="text-align: justify;">by Francis Ed Lim</div><div style="text-align: justify;">Published 07 July 2011, Philippine Daily Inquirer</div><div style="text-align: justify;"><i>(Original article available online </i><a href="http://business.inquirer.net/6147/why-a-new-competition-authority-out-of-the-blue"><i>here</i></a>)</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">"<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 17px;">Last June 19, President Aquino signed Executive Order No. 45 designating the Department of Justice as the Competition Authority for the Philippines.</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 17px;"><br />
</span></div><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 17px;"><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">The EO creates the Office for Competition (OC) under the Office of the Secretary of Justice and tasks it to exercise vast powers and responsibilities relating to antitrust matters. It was issued pursuant to the President’s “power and control over executive departments, bureaus and offices,” as well as his “continuing authority under existing laws to reorganize such executive departments, bureaus and agencies.”</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">The EO comes in the wake of several bills now pending in Congress to revamp our present laws on monopolies and combinations in restraint of trade. There are several bills in the Senate, among which are Senate Bill No. 1, authored by Senate President Juan Ponce Enrile, otherwise known as the Competition Act of 2010, and Senate Bill No. 123, otherwise known as the Fair Trade Act of 2010, authored by Sen. Sergio Osmeña.</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">There are also 12 antitrust bills in the House of Representatives, among which is House Bill No. 4835, otherwise known as the Philippine Fair Competition Act of 2011, authored by Rep. Rufus Rodriguez.</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">Senate Bill No. 1 is basically the same as the antitrust bill passed by the Senate in the last Congress. The House versions of the bill are now in their advanced stage. The committees on trade and industry and on economic affairs are now preparing a substitute bill to the 12 antitrust bills filed in the House of Representatives.</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;"><strong style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; vertical-align: baseline;">My two cents’ worth</strong></div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">Under the present setup, the delineation of powers and responsibilities on antitrust matters is clear. The DoJ takes care of criminal prosecution while the different implementing agencies take care of regulation.</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">EO 45 appears to radically change this setup. It creates the OC as the super body for antitrust matters. Thus, aside from giving the OC the power to investigate and prosecute violations of our antitrust laws, EO 45 empowers it to “[e]nforce competition policies and laws to protect consumers” and “supervise competition in the markets by ensuring that prohibitions and requirements of competition laws are adhered to.” It also mandates the OC to “[m]onitor and implement measures to promote transparency and accountability in markets” and “[p]repare, publish and disseminate studies and reports on competition to inform and guide the industry and consumers.” Consistently, the EO empowers the OC to “call on other government agencies and/or entities for submission of reports and provision for assistance,” thereby apparently relegating the other agencies to assisting the OC in the performance of its task under the executive order.</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">The creation of this superbody by an executive order, however, gives rise to more questions than answers. For example, there are matters relating to monopolies and combinations in restraint of trade that are currently under the regulatory jurisdiction of other government agencies. Things that readily come to mind are sale of assets (which include shares of stock) of corporations, corporate mergers and voting trust agreements, all of which must comply with our laws against monopolies and combinations in restraint of trade. These matters are governed by the Corporation Code, which is being implemented and enforced by the SEC. Another example is the Downstream Oil Deregulation Act (RA 8479), which mandates the Department of Trade and Industry and Department of Energy to prevent cartelization, monopolies, combinations in restraint of trade. A live example is the reported P74.1-billion acquisition by PLDT of 51.55-percent shareholding in Digitel, which the NTC is reviewing in the exercise of its powers under the law.</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">Since EO 45 is silent as to the operating relationship between the OC and government agencies with antitrust powers, the question then is: Should these government agencies now stop exercising their antitrust powers in light of the creation of the OC as the superbody for antitrust matters? Alternatively, should the OC now supervise the various implementing agencies in the way they discharge their antitrust powers and responsibilities? If so, is this just another bureaucratic hurdle that will further complicate doing business in the Philippines? In this regard, “supervising” competition could lead to legal challenges from the private sector.</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">For another, in the United States, there is no single authority for antitrust matters. The prosecution for antitrust violations is left to the DoJ while the regulatory side is left to the Federal Trade Commission. This model is followed by other countries such as the United Kingdom and other Asean countries.</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">In other words, the enforcement authority for the antitrust law is a policy matter to be determined by Congress in the exercise of its legislative powers under the Constitution. In fact, a cursory examination of the pending bills in Congress indicates different policy approaches to the matter. On the one hand, Senate Bill No. 1 designates the DoJ as the main implementing agency for the new competition law. On the other hand, Senate Bill No. 123 proposes to create a Fair Trade Commission. The same approach is being proposed by the House of Representatives, which proposes to create the Philippine Fair Competition Commission (PFCC).</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">More importantly: Why is there a new Competition Authority all of a sudden? Why not just wait for the new antitrust law, a priority bill that President Aquino promised in his first State of the Nation Address? Is the Aquino administration sensing an uphill battle in the enactment of a new antitrust law? Is this a genuine effort to level the playing field pending the passage of a new antitrust legislation? Is this a word of warning to our big business groups that are trying to outdo one another in acquiring businesses? Will the new authority exercise regulation on the antitrust issues raised on PLDT’s acquisition of Digitel?</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: justify; vertical-align: baseline;">Your guess is as good as mine!"</div></span>FRR: Fight for Right!http://www.blogger.com/profile/00463752414867871669noreply@blogger.com0tag:blogger.com,1999:blog-836017545891094382.post-9526515469519493702011-07-06T11:48:00.002+08:002011-07-06T11:52:52.417+08:00Office of Competition rules nearly ready<div style="font-family: Arial,Helvetica,sans-serif;"><br />
</div><div style="font-family: Arial,Helvetica,sans-serif;"><b><span style="font-size: large;">"Office of Competition rules nearly ready"</span></b></div><div style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: large;">Published in BusinessWorld Online, 04 July 2011</span></div><span style="font-size: large;"><span style="font-family: Arial,Helvetica,sans-serif;">Hit the stands on 05 July 2011 </span></span><br />
<div style="font-family: inherit; text-align: justify;"><i>(Original article available online <a href="http://www.bworld.com.ph/content.php?section=TopStory&title=Reviews-set-as-Roxas-takes-over-at-DoTC&id=34197">here</a>)</i></div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="font-family: inherit; text-align: justify;"><b>"THE JUSTICE DEPARTMENT expects to soon begin tackling competition issues with guidelines implementing the Palace-ordered mandate likely out next week, a Cabinet official yesterday said.</b></div><div style="font-family: inherit; text-align: justify;">Justice Secretary Leila M. de Lima said the rules that will govern the planned Office for Competition under her department are still being finalized.</div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="font-family: inherit; text-align: justify;">“We are still discussing the guidelines. We hope to release it by next week,” Ms. de Lima said.</div><div style="font-family: inherit; text-align: justify;">Among the issues the competition office will study is Philippine Long Distance Telephone Co.’s (PLDT) planned purchase of rival Digital Telecommunications Philippines, Inc. (Digitel).</div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="font-family: inherit; text-align: justify;">“[T]here are [alleged] anti-trust issues in the deal,” Ms. de Lima said.</div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="font-family: inherit; text-align: justify;">Executive Order 45, signed by President Benigno S.C. Aquino III on June 9, designated the Justice department as the country’s Competition Authority. It was tasked to investigate violations of competition laws and prosecute violators; “supervise competition in markets” by enforcing such laws; as well as prepare, publish and disseminate studies and reports on competition to inform and guide industry and consumers. It will target monopolies, cartels and other “combinations in restraint of trade”.</div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="font-family: inherit; text-align: justify;">The order also formed an Office for Competition under the Justice secretary’s office to carry out the Competition Authority’s functions.</div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="font-family: inherit; text-align: justify;">Ms. de Lima said the guidelines, which are being deliberated by an internal panel composed of herself, Justice undersecretaries and assistant secretaries, among others, will adhere to the provisions of Mr. Aquino’s directive.</div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="font-family: inherit; text-align: justify;">“We also had to keep in mind that for this year, the budget [for the competition office] will come from the DoJ (Department of Justice) budget and it will only be next year that a full allocation will be made for the office,” she added.</div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="font-family: inherit; text-align: justify;">Ms. de Lima has said that the competition office , likely to be staffed by current state lawyers, would also engage the services of technical consultants and advisers from the private sector."</div><div style="font-family: inherit; text-align: justify;"><br />
<i>Previous related BusinessWorld post <a href="http://fightforright88.blogspot.com/2011/07/government-competition-office-taking.html">here</a>.</i></div>FRR: Fight for Right!http://www.blogger.com/profile/00463752414867871669noreply@blogger.com0tag:blogger.com,1999:blog-836017545891094382.post-13211528606438026272011-07-05T11:26:00.003+08:002011-07-06T11:47:25.497+08:00DOJ formulating guidelines for competition office<div style="font-family: Arial,Helvetica,sans-serif; text-align: justify;"><br />
<span style="font-size: large;"><b>"DOJ to formulate guidelines on competition authority"</b></span></div><div style="font-family: Arial,Helvetica,sans-serif; text-align: justify;"><span style="font-size: large;">Published in Positive News Media, 23 June 2011</span></div><div style="font-family: inherit; text-align: justify;"><i><span style="font-size: small;">(Original article available online <a href="http://positivenewsmedia.net/am2/publish/Main_News_1/DOJ_to_formulate_guidelines_on_competition_authority.shtml">here</a>)</span></i></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: small;"><br />
</span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: small;">"MANILA, June 23 (PNA) – Department of Justice (DOJ) Secretary Leila De Lima will meet all the officials of the Department of Justice (DOJ) to formulate guidelines in investigating all cases involving violations of competition laws and prosecute violators to prevent, restrain and punish monopolization, cartels and combinations in restraint of trade. </span></div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="font-family: inherit;"></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: small;"> “We need to come up with guidelines on competition authority, the unit that will handle anti-trust cases because of Executive Order 45,” De Lima said.<br />
<br />
Under E.O. 45, the DOJ is empowered to act as “Competition Authority” that would “investigate all cases involving violations of competition laws and prosecute violators to prevent, restrain and punish monopolization, cartels and combinations in restraint of trade.”<br />
<br />
The DOJ is also mandated under E.O. 45 to “enforce competition policies and laws to protect consumers from abusive, fraudulent, or harmful corrupt business practices and monitor and implement measures to promote transparency and accountability in markets.”<br />
<br />
Likewise, the DOJ is also tasked to “supervise competition in markets by ensuring that prohibitions and requirements of competition laws are adhered to, and, to this end, call on other government agencies and/or entities for submission of reports and provision for assistance.”<br />
</span> </div><div style="font-family: inherit; text-align: justify;"><span style="font-size: small;">The DOJ under E.O. 45 carries the responsibility to “prepare, publish and disseminate studies and reports on competition to inform and guide the industry and consumers; and promote international cooperation and strengthen Philippine trade relations with other countries, economies, and institutions in trade agreements.” (PNA)"</span></div><div style="font-family: inherit; text-align: justify;"><br />
</div>FRR: Fight for Right!http://www.blogger.com/profile/00463752414867871669noreply@blogger.com0tag:blogger.com,1999:blog-836017545891094382.post-34220704653003425432011-07-05T01:29:00.002+08:002011-07-06T11:47:48.867+08:00Competition office to deal with monopolies<div style="font-family: inherit; text-align: justify;"><br />
<b><span style="font-size: large;">"Monopoly madness"</span></b></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;">Published in People's Journal Online, 23 June 2011</span></div><div style="font-family: inherit; text-align: justify;"><i>(Original article available <a href="http://www.journal.com.ph/index.php/news/editorial/7924-monopoly-madness">here</a>).</i></div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="font-family: inherit; text-align: justify;">"Bigness, as the old saying goes, is badness.<br />
<br />
Monopolies stifle innovation because it diminishes, if not eliminates, competition. The result: poor-quality products or shoddy services. <br />
<br />
They are, therefore, inimical to the public interest, particularly consumer welfare.<br />
<br />
A monopoly in the telecom sector is one such scenario.<br />
<br />
Earlier, Globe Telecom raised the bogey of a return to the bad, old days of monopoly in the telecom sector. <br />
<br />
Globe’s fears about the Philippine Long Distance Telephone Co. gobbling up of Digital Telecommunications, resulting in a vast “control of spectrum,” a scarce resource that is crucial to the delivery of services in the telecommunications highway, are understandable .<br />
<br />
This spectrum is at the heart of the argument of Globe in protesting what it said was the vesting of a wide swath of the roadway to PLDT after it devoured Digitel. <br />
<br />
The spectrum is much like the lanes at the North Luzon Expressway. By letting PLDT control more than the majority of the lanes, Globe argued that it would be put at a disadvantage in the face of considerable costs just to stay afloat since the very lifeblood of the telecom business -- the spectrum -- is in the hands of the telecom titan.<br />
<br />
Globe hearkened to the dark days of the monopoly which deprived the country of a magnet for foreign investors. Why? Because the mighty PLDT refused to give access to other telecom carriers. <br />
<br />
As a result, the telecom sector endured the dark days when 98 percent of the population were waiting for a telephone line and the other two percent were waiting for a dial tone. <br />
<br />
Quite thankfully, the Ramos administration took pains to implement a vibrant business model for the telecom sector, paving the way for the entry of new players. <br />
<br />
But here’s a whiff of good news: Justice Secretary Leila De Lima said she would meet officials of the Department of Justice to formulate guidelines for the investigation of cases involving violations of competition laws.<br />
<br />
De Lima wants to prosecute violators of these laws in a bid to crack down on monopolization, cartels, and the restraint of trade.<br />
<br />
“We need to come up with guidelines on competition authority,” De Lima was quoted by a major broadsheet as saying. “The unit will handle anti-trust cases under Executive Order 45,” she said.<br />
<br />
EO 45 empowers the DoJ to investigate all cases involving violations of competition laws and prosecute violators.<br />
<br />
Under the latest EO, the Justice department is also mandated to “enforce competition policies and laws to protect consumers from abusive, fraudulent or harmful corrupt business practices.” <br />
<br />
It is likewise tasked to supervise competition in markets by ensuring that prohibitions and requirements of competition laws are followed. Thus, the DoJ requires government agencies and other entities “to submit reports and provisions for assistance.” <br />
<br />
The department also has the responsibility to “prepare, publish, and disseminate studies and reports on competition” to inform and guide the industry, and consumers about their rights and responsibilities."</div><div style="font-family: inherit; text-align: justify;"><br />
</div>FRR: Fight for Right!http://www.blogger.com/profile/00463752414867871669noreply@blogger.com0tag:blogger.com,1999:blog-836017545891094382.post-13994415348762878222011-07-04T11:44:00.001+08:002011-07-06T11:48:37.802+08:00DOJ hopefully puts teeth in competition office<div style="font-family: Arial,Helvetica,sans-serif;"><br />
<b><span style="font-size: large;">"Justice department to put teeth into anti-monopoly guidelines"</span></b></div><div style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: large;">by Tetch Torres</span></div><div style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: large;">Published 22 June 2011, INQUIRER.net</span></div><div style="font-family: inherit; text-align: justify;"><i>(Original article available <a href="http://newsinfo.inquirer.net/17131/justice-department-to-put-teeth-into-anti-monopoly-guidelines">here</a>).</i></div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="font-family: inherit; text-align: justify;">"MANILA, Philippines—Justice Secretary Leila De Lima will meet officials of the Department of Justice (DoJ) to formulate guidelines for the investigation of cases involving violations of competition laws.</div><div style="font-family: inherit; text-align: justify;"><br />
</div><div></div><div style="font-family: inherit; text-align: justify;">The secretary wants to prosecute violators of these laws in a bid to crack down on monopolization, cartels and the restraint of trade.</div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="text-align: justify;"></div><div style="font-family: inherit; text-align: justify;">“We need to come up with guidelines on competition authority,” De Lima said. “ The unit will handle anti-trust cases under Executive Order 45,” De Lima said.</div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="text-align: justify;"></div><div style="font-family: inherit; text-align: justify;">EO 45 empowers the DoJ to investigate all cases involving violations of competition laws and prosecute violators of these laws.</div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="text-align: justify;"></div><div style="font-family: inherit; text-align: justify;">Under the latest EO, the DoJ is also mandated to “enforce competition policies and laws to protect consumers from abusive, fraudulent, or harmful corrupt business practices.”</div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="text-align: justify;"></div><div style="font-family: inherit; text-align: justify;">The DoJ is likewise tasked to supervise competition in markets by ensuring that prohibitions and requirements of competition laws are followed. The DoJ, thus, requires government agencies and other entities “to submit reports and provisions for assistance.”</div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="text-align: justify;"></div><div style="font-family: inherit; text-align: justify;">The DoJ also has the responsibility to “prepare, publish and disseminate studies and reports on competition” to inform and guide the industry, and consumers about their rights and responsibilities."</div><div style="font-family: inherit; text-align: justify;"><br />
</div><a href="http://newsinfo.inquirer.net/source/inquirer-net" rel="tag"></a>FRR: Fight for Right!http://www.blogger.com/profile/00463752414867871669noreply@blogger.com0tag:blogger.com,1999:blog-836017545891094382.post-78453926906095646942011-07-03T11:23:00.001+08:002011-07-06T11:48:02.367+08:00Government competition office taking shape<div style="font-family: Arial,Helvetica,sans-serif; text-align: justify;"><br />
<span style="font-size: large;">"Government competition office to take shape next week"</span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: small;"><span style="font-size: large;"><span style="font-family: Arial,Helvetica,sans-serif;">Published in BusinessWorld Online, 21 June 2011</span></span></span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: small;"><i>(Original article available <a href="http://bworldonline.com/content.php?section=Economy&title=Government-competition-office-to-take-shape-next-week&id=33513">here</a>)</i></span></div><h1 style="font-family: inherit; text-align: justify;"><span style="font-size: small;">"THE NEW Office for Competition established by recently issued Executive Order (EO) No. 45 is expected to take shape next week when the Department of Justice holds a meeting among its officials to iron out details of its mandate and its organization, the head of the department told reporters on Tuesday.</span> </h1><div id="media" style="font-family: inherit; text-align: justify;"><div id="media_head"></div></div><div></div><div id="story_bottom" style="font-family: inherit; text-align: justify;"><span style="font-size: small;">"Early next week, I will convene a meeting with undersecretaries, assistant secretaries and key officials of the department to come up with clear guidelines and a blueprint for the Competition Office, the unit in the Department of Justice which will handle competition and antitrust cases," Justice Secretary Leila M. de Lima said.</span><br />
<span style="font-size: small;"><br />
</span> <br />
<span style="font-size: small;">President Benigno S. C. Aquino III last June 9 signed EO 45, which designated the Department of Justice (DoJ) as the Competition Authority and established the Office for Competition under it.</span><br />
<span style="font-size: small;"><br />
</span> <br />
<span style="font-size: small;">As Competition Authority, the DoJ is tasked to investigate violations of competition laws and prosecute violators; "supervise competition in markets" by enforcing such laws; as well as prepare, publish and disseminate studies and reports on competition to inform and guide industry and consumers.</span><br />
<span style="font-size: small;"><br />
</span> <br />
<span style="font-size: small;">Among others it will target monopolies, cartels and other "combinations in restraint of trade."</span><br />
<span style="font-size: small;"><br />
</span> <br />
<span style="font-size: small;">EO 45 also formed an Office for Competition under the Office of the Secretary of Justice as the Competition Authority’s arm to carry out its functions.</span><br />
<span style="font-size: small;"><br />
</span> <br />
<span style="font-size: small;">The same order said the Justice secretary will designate the head of the office, which will be manned by legal and technical experts, as well as "consultants and resource persons."</span><br />
<span style="font-size: small;"><br />
</span> <br />
<span style="font-size: small;">"It should be an official from the DoJ who should head that [office]," Ms. de Lima said.</span><br />
<span style="font-size: small;"><br />
</span> <br />
<span style="font-size: small;">"Most of the personnel who will work in it are our state counsels and lawyers," she added, noting that the Office of the Government Corporate Counsel could be tapped to assist the new body.</span><br />
<span style="font-size: small;"><br />
</span> <br />
<span style="font-size: small;">"Under the executive order, we can engage the services of technical consultants and advisers in the fulfillment of the mandate. We will discuss who we can appoint as consultants," Ms. de Lima said.</span><br />
<span style="font-size: small;"><br />
</span> <br />
<span style="font-size: small;">She noted that some officials in the department have already told her of their willingness to work for new office.</span><br />
<span style="font-size: small;"><br />
</span> <br />
<span style="font-size: small;">Last week, Ms. de Lima said the new office was designed to ensure "economic justice for all."</span><br />
<span style="font-size: small;"><br />
</span> <br />
<span style="font-size: small;">"It is the consumer that would suffer if we have monopolistic actions...in any industry," the Justice chief had said. -- <b>NRM"</b></span><br />
<span style="font-size: small;"><b> </b></span> </div><div style="font-family: inherit; text-align: justify;"></div>FRR: Fight for Right!http://www.blogger.com/profile/00463752414867871669noreply@blogger.com1tag:blogger.com,1999:blog-836017545891094382.post-34146993687273531642011-07-02T11:18:00.000+08:002011-07-06T11:23:08.302+08:00TXTM8's take on the competition authority vs competition policy<div style="font-family: Arial,Helvetica,sans-serif; text-align: justify;"><b>"New Kid on the Anti-Trust Block: Department of Justice"</b></div><div style="font-family: Arial,Helvetica,sans-serif; text-align: justify;">by Mars Veloso</div><div style="font-family: Arial,Helvetica,sans-serif; text-align: justify;">Published 17 June 2011, TXTM8</div><div style="font-family: Arial,Helvetica,sans-serif; text-align: justify;">TXTM8 is Consumer Advocacy Group for Telecommunication Issues in the Philippines</div><div style="font-family: inherit; text-align: justify;"><i>(Original article available <a href="http://mytxtmate.com/2011/06/22/competition-authority-doj-meet-competition-policy-ntc/">here</a>).</i></div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="font-family: inherit; text-align: justify;">"Aside from the glaring fact that prominent newspaper columnists seem to be lobbying for either Globe or PLDT, let’s review the external pressure placed upon the National Telecommunications Commission (NTC) to approve/disapprove the share swap agreement between PLDT and Digitel:</div><div style="font-family: inherit;"></div><ol style="font-family: inherit; text-align: justify;"><li>The Senate Public Services Committee has undertaken an independent review… and has decided that it was without power to interfere.</li>
<li>At least three (3) congressional resolutions have been passed to probe the deal. Unfortunately, Congress is in recess.</li>
<li>The Department of Science and Technology (DOST) has been tasked to jointly review the deal with the NTC.</li>
<li>The National Economic Development Authority (NEDA) is being pushed to study the effects of the “merger” on the public welfare.</li>
<li>And now, via Executive Order No. 45, the Department of Justice (DOJ) has been designated as the country’s “competition authority.”</li>
</ol><div style="font-family: inherit; text-align: justify;"></div><div style="font-family: inherit; text-align: justify;">What is glossed over however from this series of high-profile developments in the media is that the NTC itself is sitting on a gold mine. <span id="more-151"></span>It has in its possession a relevant, existing, well-researched competition policy document which highlights best practices from around the world to guarantee that competition can thrive even in monopoly-rich environments. Is attention being given to this document? Senators Osmena, Arroyo, and Recto appear to have understood the relevance of this document during the recently concluded senate inquiry. The NTC has acknowledged its existence… and that it is still “being studied.” No mention is made of the fact that this document has lingered in the NTC’s archives for four or five years.</div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="font-family: inherit; text-align: justify;"></div><div style="font-family: inherit; text-align: justify;">Now that a monopoly is being subtly re-engineered, today is the best time to ensure that the document’s contents become pre-conditions to the approval of the share-swap agreement. Today is the best time to make the relevant government agencies aware that a sector-specific competition policy document actually exists… and that it was created by the very entity charged to enforce it: the NTC!</div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="font-family: inherit; text-align: justify;"></div><div style="font-family: inherit; text-align: justify;">The execution of such a policy document can serve as the middle ground for the regulator; a virtual “win-win” scenario in the controversial application process now being undertaken by PLDT and Digitel. If properly implemented, the telecom giants win by having their “merger” approved and the public wins by the very fact that true competition is finally allowed to exist in the market. The only question is: will the NTC finally execute? Or will it falter once more?"</div><div style="font-family: inherit; text-align: justify;"><br />
</div>FRR: Fight for Right!http://www.blogger.com/profile/00463752414867871669noreply@blogger.com0tag:blogger.com,1999:blog-836017545891094382.post-74996811320759182142011-07-02T11:10:00.000+08:002011-07-06T11:13:45.229+08:00Possible implications of EO 45<div style="font-family: Arial,Helvetica,sans-serif; text-align: justify;"><b><span style="font-size: small;">"Palace evasive over EO 45 effect on PLDT-Digitel deal"</span></b></div><div style="font-family: Arial,Helvetica,sans-serif; text-align: justify;"><span style="font-size: small;">by Aytch S. de la Cruz</span></div><div style="font-family: inherit; text-align: justify;"><span style="font-family: Arial,Helvetica,sans-serif; font-size: small;">Published 17 June 2011, The Daily Tribune Online</span></div><div style="font-family: inherit; text-align: justify;"><i>(Original article available here).</i></div><div style="font-family: inherit; text-align: justify;"><br />
</div><span style="font-family: inherit;">"Malacañang yesterday refused to venture an opinion whether the freshly issued Executive Order (EO) 45 that aims to stop monopolistic practices by big-time business groups would have an impact in the impending merger being hatched by leading telecommunications firms, Philippine Long Distance Telephone Co. (PLDT) with rival Digitel Telecommunications (Digitel).</span><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="font-family: inherit; text-align: justify;">Economic managers along with the National Telecommunications Commission (NTC) were previously ordered by President Aquino to look into all the possible consequences that may develop in the event PLDT and Digitel push through with the merger following the complaints lodged by Globe Telecom.</div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="font-family: inherit; text-align: justify;">Until now, however, Malacañang has yet to update media on the results of the supposed study and whether or not Aquino has made a decision in response to the concerns raised by Globe Telecoms insofar as the state of competition among the industry players is concerned.</div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="font-family: inherit; text-align: justify;">Presidential Communications Development and Strategic Planning (PCDSP) Secretary Ramon Carandang said he is uncertain whether EO 45 which empowers the Department of Justice (DoJ) to act as “Competition Authority” would have an effect in the looming PLDT-Digitel merger.</div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="font-family: inherit; text-align: justify;">“I’m not sure if that particular EO will have an impact on the merger. We’re still trying to figure out how to respond to that. Again, let me bring up the issue we raised before: Will it have negative impact on consumers? Will it have a negative impact on the competitive environment in the telecoms industry? Those were the issues we’re looking at right now and we’re going to make a decision based on that,” Carandang told reporters during a press briefing.</div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="font-family: inherit; text-align: justify;">Aquino through his EO 45 has mandated the DoJ to “investigate all cases involving violations of competition laws and prosecute violators to prevent, restrain and punish monopolization, cartels and combinations in restraint of trade.”</div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="font-family: inherit; text-align: justify;">Carandang said this particular order aims to strengthen the Aquino administration’s campaign against monopoly, cartel, and other anti-competitive practices that weakens the country’s business environment.</div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="font-family: inherit; text-align: justify;">“It (EO 45) is just one of many things — I know there are pending bills in Congress — which seek to address also anti-monopolistic practices. So this is all part of what is going to be different measures, different policies put in place in order to maintain a level playing field,” explained Carandang.</div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="font-family: inherit; text-align: justify;">Globe’s primary argument in opposing the impending merger between PLDT and Digitel is that it might result in a lopsided distribution of communication frequencies thus making the competition among telecom-munications industries unhealthy.</div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="font-family: inherit; text-align: justify;">EO 45 failed to specify the industries it would cover but Carandang assumed that the order would generally “apply to all situations, whether maybe accusations or suspicions of monopoly or cartel behavior.”</div><div style="font-family: inherit; text-align: justify;">Interestingly, it is the NTC, not the President, that is empowered to settle the issue between PLDT and Globe, and this new EO comes after Globe’s letter to the president signed by Globe chairman, Jaime Augsto Zobel seeking the awarding of the frequency, which should be auctioned by the NTC and not awarded by the president.</div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="font-family: inherit; text-align: justify;">Carandang also said that while DoJ serves as the lead agency in this particular endeavor, other government institutions such as the Department of Trade and Industry and other economic agencies are expected to participate in determining situations where monopoly and cartel exist.</div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="font-family: inherit; text-align: justify;">“The DoJ will handle one aspect to that which is the legal aspect. There are the economic and the industry aspects as well — the competitive aspects, there’s the consumer aspect. So the decision whatever it may be will have to be done based on a more holistic approach,” Carandang explained.</div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="font-family: inherit; text-align: justify;">“We cannot look at it based purely on legal (aspects), so it’s an interagency decision, the concerned Cabinet agencies will be weighing in on these issues,” he added.</div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="font-family: inherit; text-align: justify;">EO 45 has mandated the DoJ to “enforce competition policies and laws to protect consumers from abusive, fraudulent, or harmful corrupt business practices and monitor and implement measures to promote transparency and accountability in markets.”</div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="font-family: inherit; text-align: justify;">DoJ is also tasked to “supervise competition in markets by ensuring that prohibitions and requirements of competition laws are adhered to, and to this end, call on other government agencies and/or entities for submission of reports and provision for assistance.”</div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="font-family: inherit; text-align: justify;">Moreover, the DoJ under the same order carries the responsibility of preparing, publishing and disseminating studies and reports on competition to inform and guide the industry and consumers as well as promote international cooperation and strengthen Philippine trade relations with other countries, economies, and institutions in trade agreements.</div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="font-family: inherit; text-align: justify;">EO 45 also created the Office for Competition under the Office of the Secretary of Justice to carry out the duties and responsibilities set forth in the Section 1 of EO 45. It shall be manned by such number of staff including legal and technical experts, consultants and resource persons to effectively and efficiently pursue its mandate."</div><div style="font-family: inherit; text-align: justify;"><br />
</div><div style="font-family: inherit; text-align: justify;"><br />
</div>FRR: Fight for Right!http://www.blogger.com/profile/00463752414867871669noreply@blogger.com0