Article 41Supplement v1, p. 41

COMMERCIAL LAWS SUPPLEMENT

source of any income, profits, losses, expenditures, which

are not generally known to the public or to other persons

who can obtain economic value from its disclosure or use,

or is liable to cause serious harm to the person who

provided it, or from whom it originates, and is the subject

of efforts that are reasonable under the circumstances to

maintain its secrecy;

(f) "Control" refers to the ability to substantially influence

or direct the actions or decisions of an entity, whether by

contract, agency or otherwise;

(g) "Dominant position" refers to a position of economic

strength that an entity or entities hold which makes it

capable of controlling the relevant market independently

from any or a combination of the following: competitors,

customers, suppliers, or consumers;

(h) "Entity" refers to any person, natural or juridical, sole

proprietorship, partnership, combination or association in

any form, whether incorporated or not, domestic or

foreign, including those owned or controlled by the

government,

engaged

directly

or

indirectly

in

any

economic activity;

(i)

"Joint

venture" refers to a business arrangement

whereby an entity or group of entities contribute capital,

services, assets, or a combination of any or all of the

foregoing,

to undertake an investment activity or a

specific project, where each entity shall have the right to

direct and govern the policies in connection therewith,

with the intention to share both profits and risks and

losses subject to agreement by the entities;

(j) "Market" refers to the group of goods or services that

are sufficiently interchangeable or substitutable and the

object of competition, and the geographic area where

said goods or services are offered;

(k) "Merger" refers to the joining of two (2) or more

entities into an existing entity or to form a new entity,

including joint ventures;

(l) "Relevant market" refers to the market in which a

particular

good

or

service

is

sold

and

which

is

a

combination of the relevant product market and the

relevant geographic market, defined as follows:

(1) a relevant product market comprises all those goods

and/or services which are regarded as interchangeable or

substitutable by the consumer or the customer, by reason

of the goods and/or services' characteristics, their prices,

and their intended use; and

(2) the relevant geographic market comprises the area in

which the entity concerned is involved in the supply and

demand of goods and services, in which the conditions of

competition are sufficiently homogenous and which can

be distinguished from neighboring areas because the

conditions of competition are different in those area;

(m) "Ultimate parent entity" is the juridical entity that,

directly or indirectly, controls a party to the transaction,

and is not controlled by any other entity.

RULE 3 Prohibited Acts

SECTION 1. Anti-Competitive Agreements. —

(a)

The

following

agreements,

between

or

among

competitors, are per se prohibited:

(1) Restricting competition as to price, or components

thereof, or other terms of trade;

(2) Fixing the price at an auction or in any form of bidding,

including cover bidding, bid suppression, bid rotation and

market allocation, and other analogous practices of bid

manipulation.

(b)

The

following

agreements,

between

or

among

competitors,

which

have

the

object

or

effect

of

substantially

preventing,

restricting,

or

lessening

competition shall be prohibited:

(1) Setting, limiting, or controlling production, markets,

technical development, or investment;

(2) Dividing or sharing the market, whether by volume of

sales or purchases, territory, type of goods or services,

buyers or sellers, or any other means.

(c) Agreements other than those specified in (a) and (b) of

this

Section,

which

have

the

object

or

effect

of

substantially

preventing,

restricting,

or

lessening

competition shall also be prohibited. Provided, that those

which

contribute

to

improving

the

production

or

distribution

of

goods

and

services or to promoting

technical

or

economic

progress,

while

allowing

consumers a fair share of the resulting benefits, may not

necessarily be deemed a violation of the Act.

(d) For purposes of this Section, entities that control, are

controlled by, or are under common control with another

entity or entities, have common economic interests, and

are not otherwise able to decide or act independently of

each other, shall not be considered competitors.

SECTION 2. Abuse of Dominant Position. —

(a) It shall be prohibited for one or more entities to abuse

their dominant position by engaging in conduct that

would

substantially

prevent,

restrict,

or

lessen

competition, including:

(1) 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 such entity or entities had no such

object and that 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.

(2) 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;

(3) 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;

(4) 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:

i. Socialized pricing for the less fortunate sector of the

economy;

ii. Price differentials 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;

iii. 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

iv.

Price

changes

in

response

to

changing

market

conditions, marketability of goods or services, or volume.

(5) 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:

i. fixing prices, or

ii. giving preferential discounts or rebate upon such price,

or

© Compiled by RGL

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