Fair competition for a fair and free market

Massimo Motta, in his book entitled Competition Policy Theory and Practice, mentioned that the main objective of competition policy as enforced by the European Commission are probably economic efficiency and European market integration. He stated that the first purpose of such policy is the maintenance of competitive markets.

Competition policies serve as instruments to encourage industrial efficiency, the optimal allocation of resources, technical progress and the flexibility to adjust to a changing environment. Thus, the European Community competition policy has always taken a very strong line against price fixing, market-sharing cartels, abuses of dominant positions, and anticompetitive mergers. It has also prohibited unjustified state-granted monopoly rights and state-aid measures that do not ensure the long-term viability of firms but distort competition by keeping them artificially in business. To him, the fundamental objective of welfare encompasses total surplus, consumer surplus, defense of smaller companies, promotion of market integration, economic freedom, fighting inflation and the internationally accepted norms of fairness and equity in the market place.

The above-mentioned principles have been incorporated in many laws around the world, in recognition of the need to regulate the absolute and unbridled freedom to contract, forcing companies and industries to behave in an equitable/considerate way with respect to both its customers and competitors.

In the Philippines former President Benigno S. Aquino III signed into law the Philippine Competition Act (Republic Act 10667) on July 21, 2015, and established the Philippine Competition Commission (PCC) to enforce such Act. RA 10667 disallows abuse of dominant position, anticompetitive agreements, mergers and acquisitions. Before the passage of this law, antitrust provisions can be found in different laws covering different industries, such as the Electric Power Industry Reform Act, Public Telecommunication Policy Act, Downstream Oil Deregulation Act of 1998 and the general banking law. The Department of Justice and other government agencies played a central role in making sure that aforementioned laws are complied with by way of filing relevant cases.

As such, business and industry welcomed the creation of the PCC, which is headed by a very driven and capable leader in the person of Dr. Arsenio Balisacan. Under his leadership, the PCC’s basic aim is to be a world-class authority in promoting fair market competition to help achieve a vibrant and inclusive economy and advance consumer welfare. Their mission acknowledges that sound market regulation will help foster business innovation, increase global competitiveness and expand consumer choices to improve public welfare.

Over the last few years, the PCC has come up with significant accomplishments. They have released the implementing rules and regulations for RA 10667 after conducting robust public consultations in 2016, worked relentlessly with the National Economic and Development Authority on the Charter on national competition policy and the Philippine Development Plan, drafted mergers and acquisitions guidelines, and conducted various reviews of a growing number of mergers and acquisitions notifications. Even joint ventures are now being looked into, and how these entities can and should comply with RA 10667.

Realizing that enforcement is key to ensuring a truly competitive market, the Competition Enforcement Office and rules relating to the same have already been drafted by the PCC. To engage both internal and external stakeholders, it has also done a variety of local capacity-building workshops on relevant topics, such as cartel investigation and competition law and economics. The drive is to create a regulatory environment for market competition to protect consumers and promote competitive businesses.

At the end of the day, achieving the objectives of the PCC will, in reality, redound to the benefit of Juan de la Cruz. While we have seen positive indicators in our economic life, the PCC fully recognizes that there remains a challenge in attaining economic development where no one is left behind. This vision is unique because it also institutionalizes the value of inclusiveness where the sweet fruits of economic progress are shared by not a few but by all.


For comments and suggestions arielnepo.businessmirror@gmail.com



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