Article 34Supplement v1, p. 34

COMMERCIAL LAWS SUPPLEMENT

dominant position by engaging in conduct that would

substantially prevent, restrict or lessen competition:

(a) Selling goods or services below cost with the object of

driving competition out of the relevant market: Provided ,

That in the Commission’s evaluation of this fact, it shall

consider whether the entity or entities have no such

object and the price established was in good faith to

meet or compete with the lower price of a competitor in

the same market selling the same or comparable product

or service of like quality;

(b) Imposing barriers to entry or committing acts that

prevent competitors from growing within the market in

an anti-competitive manner except those that develop in

the market as a result of or arising from a superior

product or process, business acumen, or legal rights or

laws;

(c) Making a transaction subject to acceptance by the

other parties of other obligations which, by their nature or

according to commercial usage, have no connection with

the transaction;

(d) Setting prices or other terms or conditions that

discriminate unreasonably between customers or sellers

of the same goods or services, where such customers or

sellers are contemporaneously trading on similar terms

and

conditions,

where the effect may be to lessen

competition substantially: Provided, That the following

shall be considered permissible price differentials:

(1) Socialized pricing for the less fortunate sector of the

economy;

(2) Price differential which reasonably or approximately

reflect differences in the cost of manufacture, sale, or

delivery

resulting

from

differing

methods,

technical

conditions, or quantities in which the goods or services

are sold or delivered to the buyers or sellers;

(3) Price differential or terms of sale offered in response to

the competitive price of payments, services or changes in

the facilities furnished by a competitor; and

(4)

Price

changes

in

response

to

changing

market

conditions, marketability of goods or services, or volume;

(e) Imposing restrictions on the lease or contract for sale

or trade of goods or services concerning where, to whom,

or in what forms goods or services may be sold or traded,

such as fixing prices, giving preferential discounts or

rebate upon such price, or imposing conditions not to

deal with competing entities, where the object or effect

of

the

restrictions

is

to

prevent,

restrict

or

lessen

competition

substantially:

Provided,

That

nothing

contained in this Act shall prohibit or render unlawful:

(1)

Permissible

franchising,

licensing,

exclusive

merchandising or exclusive distributorship agreements

such

as

those

which

give

each

party the right to

unilaterally terminate the agreement; or

(2) Agreements protecting intellectual property rights,

confidential information, or trade secrets;

(f)

Making

supply

of

particular

goods

or

services

dependent upon the purchase of other goods or services

from the supplier which have no direct connection with

the main goods or services to be supplied;

(g) Directly or indirectly imposing unfairly low purchase

prices

for

the

goods

or

services

of, among others,

marginalized agricultural producers, fisherfolk, micro-,

small-, medium-scale enterprises, and other marginalized

service providers and producers;

(h) Directly or indirectly imposing unfair purchase or

selling price on their competitors, customers, suppliers or

consumers, provided that prices that develop in the

market as a result of or due to a superior product or

process, business acumen or legal rights or laws shall not

be considered unfair prices; and

(i) Limiting production, markets or technical development

to the prejudice of consumers, provided that limitations

that develop in the market as a result of or due to a

superior product or process, business acumen or legal

rights or laws shall not be a violation of this Act:

Provided, That nothing in this Act shall be construed or

interpreted

as

a

prohibition

on

having a dominant

position in a relevant market or on acquiring, maintaining

and increasing market share through legitimate means

that

do

not

substantially

prevent,

restrict or lessen

competition:

Provided, further, That any conduct which contributes to

improving production or distribution of goods or services

within the relevant market, or promoting technical and

economic progress while allowing consumers a fair share

of

the

resulting

benefit

may

not

necessarily

be

considered an abuse of dominant position:

Provided, finally, That the foregoing shall not constrain

the Commission or the relevant regulator from pursuing

measures that would promote fair competition or more

competition as provided in this Act.

CHAPTER IV MERGERS AND ACQUISITIONS

Section 16. Review of Mergers and Acquisitions. — The

Commission shall have the power to review mergers and

acquisitions based on factors deemed relevant by the

Commission.

Section 17. Compulsory Notification. – Parties to the

merger

or acquisition agreement referred to in the

preceding section wherein the value of the transaction

exceeds

one

billion

pesos

(P1,000,000,000.00)

are

prohibited from consummating their agreement until

thirty

(30)

days

after

providing

notification

to

the

Commission in the form and containing the information

specified in the regulations issued by the Commission:

Provided, That the Commission shall promulgate other

criteria, such as increased market share in the relevant

market in excess of minimum thresholds, that may be

applied specifically to a sector, or across some or all

sectors, in determining whether parties to a merger or

acquisition

shall

notify

the

Commission

under

this

Chapter.

An

agreement

consummated

in

violation

of

this

requirement

to

notify

the

Commission

shall

be

considered

void

and

subject

the

parties

to

an

administrative fine of one percent (1%) to five percent (5%)

of the value of the transaction.

Should

the

Commission

deem

it

necessary,

it may

request further information that are reasonably necessary

and directly relevant to the prohibition under Section 20

hereof from the parties to the agreement before the

expiration of the thirty (30)-day period referred. The

issuance of such a request has the effect of extending the

period

within

which

the

agreement

may

not

be

consummated for an additional sixty (60) days, beginning

on the day after the request for information is received by

the parties: Provided, That, in no case shall the total

period for review by the Commission of the subject

agreement

exceed

ninety

(90)

days

from

initial

notification by the parties.

When the above periods have expired and no decision

has been promulgated for whatever reason, the merger

or acquisition shall be deemed approved and the parties

may proceed to implement or consummate it. All notices,

documents and information provided to or emanating

from the Commission under this section shall be subject

to confidentiality rule under Section 34 of this Act except

when the release of information contained therein is with

the consent of the notifying entity or is mandatorily

required to be disclosed by law or by a valid order of a

court of competent jurisdiction, or of a government or

regulatory agency, including an exchange.

In the case of the merger or acquisition of banks, banking

institutions,

building

and

loan

associations,

trust

companies,

insurance

companies,

public

utilities,

educational institutions and other special corporations

governed by special laws, a favorable or no-objection

ruling by the Commission shall not be construed as

© Compiled by RGL

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