Antitrust/ Competition Law: Investigation of Administrative Cases involving Anti-Competitive Conduct before the Philippine Competition Commission*
The Philippine Competition Commission (“PCC”) shall have original and primary jurisdiction over the enforcement and implementation of Republic Act No. 10667, otherwise known as the Philippine Competition Act (“PCA”).[i] It has the power to conduct inquiries and investigate, upon complaint or motu proprio anti-competitive conduct. The PCC may investigate the acts, whether done in or out of the territory of the Republic of the Philippines, of any person or entity engaged in any trade, industry and commerce in the Republic of the Philippines, including international trade having a direct, substantial, and reasonably foreseeable effects in trade, industry, or commerce in the Republic of the Philippines.[ii]
The power of the PCC to investigate administrative cases for any violation of the PCC, its implementing rules of other Philippine competition laws, is vested with the Enforcement Office of the PCC (“Enforcement Office”).[iii] This power begins with the filing of a verified complaint by any interested person, referral by another government regulatory agency, through other forms of complaints, referrals or reports, or motu proprio, at the discretion of the Commission.[iv]
It must be noted that a complaint or referral, once commenced with the PCC, is subject to its control. As a matter of fact, the withdrawal of a complaint or referral from the Enforcement Office does not automatically result in the termination of the investigation or discharge the entity complained of, nor exempt the entity from possible imposition of administrative sanction or penalty.[v]
The complaint or referral may either be given or denied due course. Interestingly, the Commission is vested with power to deny due course to the complaint, taking into consideration jurisdiction, public interest, likelihood of success, compliance with the formal requirements to lodge a complaint, or absence of reasonable grounds.[vi]
If a complaint is given due course, the Enforcement Office, for a period of ninety (90) days[vii], begins a fact-finding Preliminary Inquiry, prior to the conduct of a Full Administrative Investigation.
The purpose of the Preliminary Inquiry is to determine, among others, the interest of the entity filing the complaint, PCC’s jurisdiction, the purported violations of the PCA, its implementing rules, and other Philippine competition laws, the possible violators, the potential adverse effect of a conduct or agreement on consumer welfare or competition in the relevant sector or industry, and the prejudice it may cause to public interest.[viii] On the other hand, the purpose of a Full Administrative Investigation is to ascertain whether there is sufficient basis to charge an entity for violation of the Act, its implementing rules, or other competition laws.
The Enforcement Office will do one of two (2) things during the Preliminary Inquiry. First, it may issue a resolution ordering the closure of the Preliminary Investigation if no violation is found or there is lack of facts or information to support the allegations in the complaint or referral. Second, it may issue a resolution to conduct a Full Administrative Investigation, if a possible violation is found, based on the facts or information available at the end of the ninety (90) day period.[ix]
At any time after the termination of the Preliminary Inquiry, the PCC can also file before the Department of Justice, criminal complaints for violations of the PCA or other competition laws for preliminary investigation and prosecution before the proper court.[x]
If the resolution of the Enforcement Office is to conduct a Full Administrative Investigation, it will issue a Notice of Investigation to the Entity under Full Administrative Investigation. In addition, the commencement of the Full Administrative Investigation shall be published in the PCC website.[xi] The Enforcement Office may also require the Entity under Full Administrative Investigation to appear for clarificatory questioning.
If the after Full Administrative Investigation, the Enforcement Office finds sufficient basis (this refers to the existence of such facts and circumstances that would engender reasonable belief that there is a violation of the Act, its implementing rules, or other competition laws, and that the Entity subject of the Statement of Objections [SO] probably committed it)[xii], it shall file before the Commission a Statement of Objections charging the entity for violation of the PCA. Thus, the adjudication phase will begin. Otherwise, the Enforcement Office shall close the Investigation.[xiii] The closure of the investigation is without prejudice to the conduct of another, if warranted by circumstances.[xiv]
Prior to the filing of a Statement of Objections, the Enforcement Office may resort to the issuance of a Show Cause Order (SCO), as a Non-Adversarial Remedy. The Enforcement Office may issue a SCO to the entity after Preliminary Inquiry, or upon a preliminary finding that an entity’s business conduct is violative or not in accord with the PCA or other competition laws.[xv]
If issued a SCO, the entity may either submit an explanation disputing the findings of the Enforcement Office or provide a written proposal to address them.[xvi] The Enforcement Office may call a clarificatory conference requiring the entity to appear and submit additional documents or information.[xvii]
Should the Enforcement Office find the explanation and documents submitted by the entity insufficient, it may continue with its investigation or proceed with the filing of a SO. On the other hand, if the entity submits a written proposal to the Enforcement Office, the proposal will be transmitted to the Commission, who shall, within thirty (30) days, issue its ruling.[xviii]
In aid of its mandate to conduct a Preliminary Inquiry, and in the course of a Full Administrative Investigation, the Enforcement Office is granted various powers. These include the power to administer oaths; to issue subpoenas duces tecum and duces tecum ad testificandum; to request to anyone who may have access to, possession or control any documents to submit such documents, file written reports, answer questions, or give statement, or submit specified information; to apply for an inspection order with a court pursuant to its discovery and inspection powers to inspect the premises of an entity and to obtain books, tax records, and other documents; to deputize or enlist any enforcement agency of the government or any private person or institution; to initiate contempt proceedings; to charge an entity for violations of the PCA, among others.[xix]
The Enforcement Office may charge the entity for a violation of its order, such as where it is supplied incorrect or misleading information[xx], its investigation is obstructed[xxi], reprisal or discrimination is committed by an entity against another who cooperated with the Enforcement Office or furnished documents or information[xxii], and other actionable violations[xxiii].
This is how violations of the PCA and competition laws are investigated in the Philippines.
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* This is part of the papers submitted by NDV Law’s Atty. Norieva “Nikki” de Vega to the University of Melbourne, in partial fulfillment for the completion of a Master of Laws Degree (Global Competition and Consumer Law).
[i] Philippine Competition Act 2015 § 10.
[ii] Ibid § 3.
[iii] PCC Rules of Procedure § 2.1.
[iv] Ibid § 2.2.
[v] Ibid § 2.6.
[vi] Ibid § 2.3 and 2.4.
[vii] Ibid § 2.5.
[viii] Ibid § 2.1.
[ix] Ibid § 2.6.
[x] Ibid § 2.18.
[xi] Ibid § 2.9.
[xii] Ibid § 2.11.
[xiii] Ibid § 2.11.
[xiv] Ibid § 2.13.
[xv] Ibid § 3.10.
[xvi] Ibid § 3.12.
[xvii] Ibid § 3.13.
[xviii] Ibid § 3.15.
[xix] Ibid § 2.14.
[xx] Ibid § 6.11.
[xxi] Ibid § 6.15.
[xxii] Ibid § 6.12.
[xxiii] Ibid § 6.16.