Article 36Supplement v1, p. 36

COMMERCIAL LAWS SUPPLEMENT

(c)

Adopt

a

broad

and

forward-looking

perspective,

recognizing future market developments, any overriding

need

to

make

the

goods

or

services

available

to

consumers, the requirements of large investments in

infrastructure, the requirements of law, and the need of

our economy to respond to international competition, but

also taking account of past behavior of the parties

involved and prevailing market conditions;

(d) Balance the need to ensure that competition is not

prevented or substantially restricted and the risk that

competition

efficiency,

productivity,

innovation,

or

development of priority areas or industries in the general

interest of the country may be deterred by overzealous or

undue intervention; and

(e) Assess the totality of evidence on whether it is more

likely

than

not

that

the

entity

has

engaged

in

anti-competitive

agreement

or

conduct

including

whether the entity’s conduct was done with a reasonable

commercial purpose such as but not limited to phasing

out of a product or closure of a business, or as a

reasonable commercial response to the market entry or

conduct of a competitor.

Section 27. Market Dominant Position. – In determining

whether an entity has market dominant position for

purposes of this Act, the Commission shall consider the

following:

(a) The share of the entity in the relevant market and

whether it is able to fix prices unilaterally or to restrict

supply in the relevant market;

(b) The existence of barriers to entry and the elements

which could foreseeably alter both said barriers and the

supply from competitors;

(c) The existence and power of its competitors;

(d) The possibility of access by its competitors or other

entities to its sources of inputs;

(e) The power of its customers to switch to other goods or

services;

(f) Its recent conducts; and

(g) Other criteria established by the regulations of this

Act.

There

shall

be a rebuttable presumption of market

dominant position if the market share of an entity in the

relevant market is at least fifty percent (50%), unless a

new

market

share

threshold

is

determined

by

the

Commission for that particular sector.

The Commission shall from time to time determine and

publish the threshold for dominant position or minimum

level of share in the relevant market that could give rise to

a

presumption

of

dominant

position.

In

such

determination,

the

Commission

would

consider

the

structure of the relevant market, degree of integration,

access to end-users, technology and financial resources,

and other factors affecting the control of a market, as

provided in subsections (a) to (g) of this section.

The

Commission

shall

not

consider

the

acquiring,

maintaining and increasing of market share through

legitimate

means

not

substantially

preventing,

restricting, or lessening competition in the market such

as but not limited to having superior skills, rendering

superior

service,

producing

or

distributing

quality

products, having business acumen, and the enjoyment

and

use of protected intellectual property rights as

violative of this Act.

Section 28. Forbearance. – The Commission may forbear

from applying the provisions of this Act, for a limited time,

in whole or in part, in all or specific cases, on an entity or

group of entities, if in its determination:

(a) Enforcement is not necessary to the attainment of the

policy objectives of this Act;

(b) Forbearance will neither impede competition in the

market where the entity or group of entities seeking

exemption operates nor in related markets; and

(c) Forbearance is consistent with public interest and the

benefit and welfare of the consumers.

A public hearing shall be held to assist the Commission in

making this determination.

The Commission’s order exempting the relevant entity or

group of entities under this section shall be made public.

Conditions may be attached to the forbearance if the

Commission

deems

it

appropriate

to

ensure

the

long-term interest of consumers.

In the event that the basis for the issuance of the

exemption order ceases to be valid, the order may be

withdrawn by the Commission.

CHAPTER VI FINES AND PENALTIES

Section 29. Administrative Penalties. –

(a) Administrative Fines. – In any investigation under

Chapter III, Sections 14 and 15, and Chapter IV, Sections 17

and 20 of this Act, after due notice and hearing, the

Commission

may

impose

the

following

schedule of

administrative fines on any entity found to have violated

the said sections:

First offense: Fine of up to one hundred million pesos

(P100,000,000.00);

Second offense: Fine of not less than one hundred million

pesos (P100,000,000.00) but not more than two hundred

fifty million pesos (P250,000,000.00).

In fixing the amount of the fine, the Commission shall

have regard to both the gravity and the duration of the

violation.

(b) Failure to Comply With an Order of the Commission. –

An entity which fails or refuses to comply with a ruling,

order or decision issued by the Commission shall pay a

penalty of not less than fifty thousand pesos (P50,000.00)

up to two million pesos (P2,000,000.00) for each violation

and a similar amount of penalty for each day thereafter

until the said entity fully complies. Provided that these

fines shall only accrue daily beginning forty-five (45) days

from the time that the said decision, order or ruling was

received.

(c) Supply of Incorrect or Misleading Information. – The

Commission may likewise impose upon any entity fines of

up

to

one

million

pesos

(PI,000,000.00)

where,

intentionally

or

negligently, they supply incorrect or

misleading information in any document, application or

other paper filed with or submitted to the Commission or

supply

incorrect

or

misleading

information

in

an

application for a binding ruling, a proposal for a consent

judgment, proceedings relating to a show cause order, or

application for modification of the Commission’s ruling,

order or approval, as the case may be.

(d) Any other violations not specifically penalized under

the relevant provisions of this Act shall be penalized by a

fine of not less than fifty thousand pesos (P50,000.00) up

to two million pesos (P2,000,000.00).

Provided that the schedule of fines indicated in this

section shall be increased by the Commission every five

(5) years to maintain their real value from the time it was

set.

Section 30. Criminal Penalties. – An entity that enters

into

any

anti-competitive

agreement

as

covered by

Chapter III, Section 14(a) and 14(b) under this Act shall, for

each and every violation, be penalized by imprisonment

from two (2) to seven (7) years, and a fine of not less than

fifty million pesos (P50,000,000.00) but not more than

two hundred fifty million pesos (P250,000,000.00). The

penalty of imprisonment shall be imposed upon the

responsible officers, and directors of the entity.

When the entities involved are juridical persons, the

penalty of. imprisonment shall be imposed on its officers,

directors, or employees holding managerial positions,

who are knowingly and willfully responsible for such

violation.

© Compiled by RGL

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