Lawmakers call for tougher anti-trust law

There has been much noise from our lawmakers on the need for a tougher anti-trust law in the Philippines. Rep. Eduardo Gullas, of Cebu, has been very vocal about pushing for an anti-trust law that would protect both consumers and businesses from wrongful and unfair competition in commerce. Senator Sergio Osmena III and Senator Juan Ponce Enrile have drafted bills for a stronger anti-trust policy and have been holding public forums for greater understanding of our current anti-trust issues. This is no doubt in response to President Noy Noy Aquino’s call for Congress to pass a new anti-trust law in his first State of the Nation Address last July 2010.

It is high time too. In truth, there is no comprehensive anti-trust policy and regulation in the country – at all. While there have been much reforms by way of liberalization, deregularizaton, and privatization to encourage free trade and open markets, anti-trust regulation in the Philippines is unfortunately completely behind compared to our foreign counterparts.

Rep. Gullas has stated that he favors new legislation patterned after the tough anti-trust laws of the United States. Actually, anti-trust laws in European countries such as Switzerland crack down even more than U.S. courts with respect to certain practices. Take the concept of vertical price-fixing, also known as vertical price restraints, which is not unfamiliar in Philippine economy.

The U.S., Switzerland and the Philippines adhere to the Rule of Reason doctrine in determining whether a company is liable for vertical price-fixing. However, the U.S. takes on a more liberal approach whereas Switzerland has more stringent standards and even has a Competition Commission which determines whether there is vertical price restraint involved. In the Philippines, there are no such determinants, and hardly if any case law providing for guidelines on how to apply the Rule of Reason.

Growing buzz for new anti-trust policy doesn't bode well for companies like Nestle

Cebu Rep. Eduardo Gullas caused a ripple when news broke out that he was strongly pushing for stronger anti-trust laws in the Philippines.

The ripple is building up into a tidal wave. Senators Sergio Osmena III, Manny Villar, and Juan Ponce Enrile have been championing a new anti-trust law. Several public forums were held for the public to introduce the proposed bills and to increase public awareness and understanding on the need for a more comprehensive anti-trust policy.

The good thing is that these new laws will champion the cause of not only the consumer but the middlemen as well - distributors, retailers, mom and pop stores, even your neighborhood sari-sari. It seeks greater protection from the big bad multinational.

In fact, on the "Understanding Anti-Trust" public forum held in the Senate building last 26 January 2011, Senator Villar's closing remarks focused squarely on the plight of Filipino small-to-medium enterprises who act as distributors for foreign multinationals. The Senator, no doubt the poster boy for Filipino entrepreneurship in his classic rags-to-riches story, threw around such fighting words like "dapat patas ang laban" ("it should be an equal fight") "paano na ang mga distributors?" ("what about the distributors") "dapat bigyan ng pag-asa ang mga Filipino SMEs" ("we should give hope to the Filipino SMEs").

Well said, Senator.

There's another anti-trust public forum this week on 10 February 2011. Atty. Lorna Kapunan will be one of the speakers, no doubt in light of her crusade to seek a forum where the needs and grievances for distributors can be heard. Her recent case against Nestle Philippines, for predatory pricing, is on appeal with the Department of Trade and Industry because the latter claims they do not have jurisdiction. This despite the fact that the case filed before that agency wasn't even a criminal case. So if DTI can't protect distributors and middle men against big bad multinationals, who then is the protector? And isn't the DTI precisely the government body tasked with regulating and ensuring compliance with all trade and industry laws???