- PCC raises administrative fines for violation of competition law
- CEO issues Statement of Objections against Developer for abuse of dominance
Administrative fines for violations of the Philippine Competition Act increased as of 9 February 2021. A second administrative case is before the PCC concerning a condominium developer for providing exclusive internet services.
This update was published on 13 April 2021, as part of our quarterly newsletter, Asia Pacific Competition Highlights. Click here to access the full report, which covers the most notable antitrust developments across 10 Asia Pacific jurisdictions.
PCC raises administrative fines for violation of competition law
Administrative fines for violations of the Philippine Competition Act increased as of 9 February 2021.
On 25 January 2021, the Philippine Competition Commission (“PCC”) published the PCC Memorandum Circular No. 21-001 (“Circular”), which increased the administrative fines for violations of the Philippine Competition Act (“PCA”) and PCC rules and regulations. The Circular implements Section 29 of the PCA, which authorises the PCC to increase the administrative fines every five years to account for inflation.
Effective from 9 February 2021, the administrative fines for the following violations of competition law, are as follows:
1. Anti-competitive agreements, abuse of dominance, or entering into prohibited M&A’s:
- First Offence: Up to PhP 110 Million (approx. USD 2.24 Million);
- Second Offence: From Php 110 Million to PhP 275 Million (approx. USD 2.24 Million to USD 5.61 Million);
- Succeeding Offences: From PhP 165 Million to PhP 275 Million (approx. USD 3.36 Million to USD 5.61 Million).
2. Failure to notify a notifiable transaction: 5% of 1% of the value of the transaction for the first 30 days of delay or fraction thereof, and an additional penalty of 1% of the value of the transaction for every additional 30 days of delay or fraction thereof, provided penalty shall not exceed PhP 2.2 Million (approx. USD 45,000).
3. Supplying incorrect or misleading information: Up to PhP 1.1 Million (approx. USD 22,500).
4. Other violations of the PCA or the PCC Rules of Procedure: PhP 55,000 to PhP 2.2 Million (approx. USD 1,100 to USD 45,000). The Circular shall apply prospectively and remain effective unless otherwise amended, supplemented, or repealed by the PCC.
CEO issues Statement of Objections against Developer of abuse of dominance
A second administrative case is before the PCC concerning a condominium developer for providing exclusive internet service.
On 15 February 2021, the PCC published a Statement of Objection (“SO”) issued by the PCC’s Competition Enforcement Office (“CEO”) against Greenfield Development Corporation (“Greenfield”) and its subsidiary, Leopard Connectivity Business Solutions Inc. (“Leopard”). The PCC CEO alleged that Greenfield and Leopard abused their dominant position when they entered into an exclusive agreement to supply fixed-line internet to Twin Oaks Place’s residential units in Greenfield District. Greenfield is both the property developer of Twin Oaks Place and the owner of Leopard, with the latter managing the Twin Oaks Place Fiber Network (TOPFN) that provides fixed-line internet to all Greenfield properties.
The CEO issued the SO after concluding its full administrative investigation, which was prompted by complaints from residents of the Twin Oaks Place building. It was alleged the due to the exclusive arrangement between Greenfield and Leopard, and residents were barred from contracting with alternative internet service providers despite issues regarding Leopard’s high prices, slow speed, and unreliable internet connection.
In 2019, a similar abuse of dominance case was brought by the CEO against Urban Deca Homes Manila Condominium Corporation (“Urban Deca”) and 8990 Holdings, Inc. (“8990 Holdings”) for their agreement with Itech-RaR Solutions. Inc. to provide exclusive fixed-line internet services to condominium projects of Urban Deca. This case was eventually settled. The respondents paid the fine of around PhP 27 Million (approx. USD 550,000) and committing to allowing internet service providers access to their (Urban Deca and 8990 Holdings) residential projects.