ANTI-TRUST CASE AGAINST NESTLE PHILIPPINES FILED IN RTC QC

MORE ON THE COMPETITION AUTHORITY

"DOJ as competition authority"
by
Lito U. Gagni
BUSINESS MIRROR, Market Files, 20 September 2011
(Original article available here)

"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.

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.

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.

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  percent 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.

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.

xxx"

POINT OF LAW: ANTI-TRUST WORTHY?

"Is It Antitrust Worthy?"
by
Francis Ed Lim
PHILIPPINE DAILY INQUIRER, Point of Law, 15 September 2011
(Original article available here)

"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.

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.  

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.

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.

A hot topic

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.

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.

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.

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.

Current law

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.

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.

There are implementing pieces of legislation, like the Revised Penal Code which, in Article 186, punishes monopolies and combinations in restraint of trade.

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.

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.

Salient features

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.

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.

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.

Anti-antitrust law

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.

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.

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?

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?

Your guess is as good as mine.

(The author, formerly the president and CEO of the Philippine Stock Exchange, is now the co-managingpartner and head of the corporate and special projects department of Accralaw. He may be contacted at felim@accralaw.com.)"

Nestle execs face trial

"A Climate of Uncertainty"
by Emil Jurado
MANILA STANDARD, To The Point, 06 September 2011
(Original article available here)

"***

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.

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.

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.

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.

***

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.

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.

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.

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.

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.

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. 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."

The DOJ Anti-Trust Mandate from PNoy

Globe urges DOJ to follow lead of US counterpart in telecom deal

by Mary Ann Ll. Reyes
Philippine Star, 05 September 2011
(Original article available here)

"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.

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.”

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.

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.

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.

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.”

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).

Between AT&T and T-Mobile, the merger will compete nationwide in 97 of the 100 largest cellular marketing areas.

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.

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.

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.

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.”

Last June 9 this year, President Aquino signed Executive Order 45 designating the DOJ as the Competition Authority.

He created the Office for Competition under the Office of the Secretary of Justice “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.”

Anti-trust crusaders hail EO45

"Anti-trust crusaders hail Aquino order"

Published 12 July 2011 in Malaya

(Original article available online here).

"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.

"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.

EO 45 creates the Office for Competition (OC) whose mandate is to investigate and prosecute all anti-trust violations. 

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." 

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."

Kapunan said with EO 45, "Filipino entrepreneurs beleaguered by unfair business practices of giant conglomerates will now know exactly where they should seek help." 

"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. 

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. 

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. 

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."

Competition office to deal with monopolies

"Monopoly madness"

Published in People's Journal Online, 23 June 2011

(Original article available here).

"Bigness, as the old saying goes, is badness.

Monopolies stifle innovation because it diminishes, if not eliminates, competition. The result: poor-quality products or shoddy services.    

They are, therefore, inimical to the public interest, particularly consumer welfare.

A monopoly in the telecom sector is one such scenario.

Earlier, Globe Telecom raised the bogey of a return to the bad, old days of monopoly in the telecom sector.

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 .

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.

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.

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.

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.

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. 

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.

De Lima  wants to prosecute violators of these laws in a bid to crack down on monopolization, cartels, and the restraint of trade.

“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.

EO 45 empowers the DoJ to investigate all cases involving violations of competition laws and prosecute violators.

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.”

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.”

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."

DOJ hopefully puts teeth in competition office

"Justice department to put teeth into anti-monopoly guidelines"

by Tetch Torres

Published 22 June 2011, INQUIRER.net

(Original article available here).

"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.

The secretary wants to prosecute violators of these laws in a bid to crack down on monopolization, cartels and the restraint of trade.

“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.

EO 45 empowers the DoJ to investigate all cases involving violations of competition laws and prosecute violators of these laws.

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.”

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.”

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."

Government competition office taking shape

"Government competition office to take shape next week"

Published in BusinessWorld Online, 21 June 2011

(Original article available here)

"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.

"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.


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.


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.


Among others it will target monopolies, cartels and other "combinations in restraint of trade."


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.


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."


"It should be an official from the DoJ who should head that [office]," Ms. de Lima said.


"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.


"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.


She noted that some officials in the department have already told her of their willingness to work for new office.


Last week, Ms. de Lima said the new office was designed to ensure "economic justice for all."


"It is the consumer that would suffer if we have monopolistic actions...in any industry," the Justice chief had said. -- NRM"
 

TXTM8's take on the competition authority vs competition policy

"New Kid on the Anti-Trust Block: Department of Justice"

by Mars Veloso

Published 17 June 2011, TXTM8

TXTM8 is Consumer Advocacy Group for Telecommunication Issues in the Philippines

(Original article available here).

"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:

1. The Senate Public Services Committee has undertaken an independent review… and has decided that it was without power to interfere.
2. At least three (3) congressional resolutions have been passed to probe the deal. Unfortunately, Congress is in recess.
3. The Department of Science and Technology (DOST) has been tasked to jointly review the deal with the NTC.
4. The National Economic Development Authority (NEDA) is being pushed to study the effects of the “merger” on the public welfare.
5. And now, via Executive Order No. 45, the Department of Justice (DOJ) has been designated as the country’s “competition authority.”

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. 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.

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!

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?"

Possible implications of EO 45

"Palace evasive over EO 45 effect on PLDT-Digitel deal"

by Aytch S. de la Cruz

Published 17 June 2011, The Daily Tribune Online

(Original article available here).

"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).

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.

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.

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.

“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.

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.”

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.

“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.

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.

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.”

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.

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.

“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.

“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.

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.”

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.”

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.

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."

DOJ empowered to act against competition violators

"EO 45 empower DoJ vs violators of 'competition laws'"

by Aytch S. de la Cruz

Published 16 June 2011, The Daily Tribune Online

(Original article available here).

"Malacañang yesterday released Executive Order (EO) 45 which empowers the Department of Justice (DoJ) 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.”

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 and monitor and implement measures to promote transparency and accountability in markets.”

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.”

Moreover, the DoJ under the same order 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.”

An Office for Competition under the Office of the Secretary of Justice is also created 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.

Justice Secretary Leila de Lima is therefore given the authority to designate the chief/head and members of the Office for Competition.

“To carry out the provisions of this Order, initial funds for the operations of the Office for Competition shall be taken from the available funds of the DoJ. Thereafter, such amount as may be deemed necessary for the annual operations of the Office, shall be incorporated and included in the annual budgetary appropriations of the DoJ,” EO 45 stipulated further as regards to the funding for the new office.

EO 45 was signed by President Aquino on June 9 and shall take effect immediately upon its publication in newspapers of general circulation."

DOJ to act as competition authority

"DOJ to serve as 'competition authority' on domestic, international trade"

Sun Star Online, 16 June 2011

(Original article available here).

"MANILA -- Malacañang has designated the Department of Justice (DOJ) as the country’s “Competition Authority” to ensure fair domestic trade, as it pushes for antitrust measures that will curb monopolies, break-up cartels, and eliminate other abusive practices in business.

By virtue of Executive Order (EO) 45, Malacañang recognizes the need to promote competition and level the playing field in the market to encourage needed investments and safeguard the interest of the general public.

The order was signed by President Benigno Aquino III on June 9, 2011.

“The 16-point Agenda of the administration provides that this will be a government that creates conditions conducive to the growth and competitiveness of private businesses, big, medium, and small,” Executive Secretary Paquito Ochoa Jr. said in a statement.

“The President’s policy, as he had stated during his first State of the Nation Address, called for measures that will allow and guarantee fair competition,” he added.

Under the EO, the DOJ is tasked 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.

The DOJ is likewise ordered to enforce competition policies and laws to protect consumers from abusive, fraudulent, or harmful corrupt business practices; and supervise competition in markets by ensuring that prohibitions and requirements of competition laws are followed.

The DOJ is also tasked to monitor and implement measures to promote transparency and accountability in markets; as well as prepare, publish, and disseminate studies and reports on competition to inform and guide the industry and consumers.

The justice department is also charged to promote international cooperation and strengthen Philippine trade relations with other countries, economies, and institutions in trade agreements. (Jill Beltran/Sunnex)"

Pnoy designates DOJ as competition authority

"Aquino designates De Lima as competition authority"

GMA News Online, 15 June 2011

(Original article available here).

"President Benigno Aquino III has designated Justice Secretary Leila de Lima as the country’s competition authority tasked to prevent monopolies, cartels and protect consumers from abusive business practices.

In Executive Order 45 signed June 9, Aquino created the Office for Competition under the Department of Justice (DOJ), citing the need to promote competition and level the playing field in the market

According to the EO, De Lima was chosen for the task because she is the principal legal counsel and prosecution arm of the government, and also the central authority for matters requiring international legal cooperation.

“The DOJ likewise serves as the principal agency mandated to enforce the rule of law and investigate and prosecute offenders," the EO stated.

Being a competition authority, De Lima is tasked to investigate all cases involving violations of competition laws and prosecute violators to prevent, restrain and punish monopolization, cartels and combination in restraint of trade.

She will also enforce competition policies and laws to protect consumers from abusive, fraudulent, or harmful corrupt business practices.

It will also be her job 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.

She will need to monitor and implement measures to promote transparency and accountability in markets.

De Lima is also tasked 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.

President Aquino also signed on June 3 Executive Order 44, which expands a public-private sector task force in charge of addressing investor issues in fresh bid to improve the global competitiveness of the Philippines.

In a press statement Wednesday, Executive Secretary Paquito Ochoa Jr. said EO 44 is a step toward enhancing the competitive ranking of the country while strengthening the local industries.

“The government and the business sector have the shared aspiration to jointly address the competitiveness indicators that will impact on our international competitiveness ranking and strengthen our industries, agriculture and service sectors, and thereby create more jobs and increase income," Ochoa said.

The President’s order renames the Public-Private Sector Task Force on Philippine Competitiveness, established on October 5, 2006, to National Competitiveness Council (NCC). The council is attached to the Department of Trade and Industry (DTI) and will report to the Cabinet’s Economic Development Cluster.

EO 44 beefs up the NCC with the inclusion of the heads of the Department of Energy (DOE) and the Department of Tourism (DOT). Other members are the secretaries of DTI and the Departments of Finance and Education, director general of the National Economic and Development Authority, and five representatives from the private sector.

Ochoa said the President deemed it important to include the DOE secretary in the joint panel in view of the rising cost of power that dulls the country’s international competitiveness.

“The DOT is included in the NCC in recognition of the fact that the development of the tourism industry holds the greatest potential for job creation and generation of additional revenues for the government," he said.

Under EO 44, the NCC serves as a primary collection point of investor issues that need to be addressed in order to improve international competitiveness in the industry, services and agricultural sectors.

The council will advise the President on policy matters affecting the competitiveness of the business sector and provide inputs to the Philippine Development Plan, the Philippine Investments Priority Plan and the Philippine Exports Priority Plan.

Part of the NCC’s task is to coordinate, monitor and ensure the implementation of key policy improvement processes associated with international competitiveness, as well as recommend legislation that may contribute to further boost competitiveness.

Designated to head the NCC was Trade Secretary Gregory Domingo with a private sector representative, to be appointed by the President, as co-chairperson. The five representatives from the private sector will have a term of two years.

The DTI-Center for Industrial Competitiveness serves as the NCC Secretariat to be headed by its executive director, with the support of a private sector staff headed by an operations director.

The EO earmarks P5 million, which will be drawn from the contingency fund of the Office of the President, for the operating expenses of the NCC. Subsequent annual funding of the council will be incorporated in the regular budget of the DTI and subject to existing accounting and auditing laws and regulations, while the private sector shall provide funding for its own activities. — Amita O. Legaspi/KBK, GMA News"