PCA

Question 1

What is competition law in general?

Answer 1

It is regulatory in nature, seeking to protect competition by controlling the exercise of market power which controls

High prices, Less choice and quality and innovation

Question 2

What is a market according to the law?

Answer 2

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

Question 3

Enumerate the kinds of markets

Answer 3

1. Perfectly Competitive
2. Imperfectly Competitive
   -monopoly (Prohibited by the constitution)
   -oligopoly
   -monopolistic competition
   -monopsony (1 buyer with all the power)

Question 4

What is ‘acquisition’ according to the PCA?

Answer 4

Refers to the purchase of securities or assets through contract or other means, for the purpose of obtaining control by:

a. 1 entity of the whole part or part of another
b. 2 or more entities over another
c. 1 or more entities over 1 or more entities

Question 5

What is ‘Dominant Position’ according to the PCA?

Answer 5

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:

1. Customers
2. Competitors
3. Suppliers
4. Consumers

Dominance in it of itself is a rebuttable presumption if the market share of an entity in the relevant market is at least 50% unless a new market share threshold is determined by the Commissioner of that particular sector. This can be singular or collective dominance.

Note, dominance in it of itself isn’t prohibited, abuse of that dominance is.

Question 6

What is ‘control’ according to the PCA?

Answer 6

The ability to substantially influence or direct the actions or directions of an entity, whether by contract, agency or otherwise

Question 7

What is ‘Merger’ according to the PCA?

Answer 7

The joining of 2 or more entities into an existing entity or to form a new entity

Question 8

What does ‘substantially prevents competition’ mean?

Answer 8

Refers to actions or agreements that create significant barriers for new or existing competitors

Question 9

What does ‘substantially restrict competition’ mean?

Answer 9

Practices that limit the competitive behavior of firms, like collusion

Question 10

What does ‘substantially lessen competition’ mean?

Answer 10

Practices that reduce the intensity of competition in the market. (like merging)

Question 11

What are the prohibited acts in the PCA?

Answer 11

Anti competitive agreements
Abuse of dominant position
Anti competitive Mergers and acquisitions

Question 12

How is agreement defined in the PCA?

Answer 12

Any type or form of contract, arrangement, understanding, collective recommendation, or concerned action, whether formal or informal, explicit or tacit, written or oral

Question 13

How is conduct defined in the PCA?

Answer 13

Any type or form of undertaking, collective recommendation, independent or concerted action, or practice, whether formal or informal

Question 14

What are the types of Anti-competitive agreements?

Answer 14

1. Prohibited per se (just straight up illegal)
   -Agreements between competitors like price-fixing, bid-rigging. Output Restriction, market sharing.

Question 15

What is considered abuse of dominant position?

Answer 15

Any conduct that would substantially prevent, restrict, or lessen competition.

Examples include
1. Predatory pricing
2. Imposing barriers to entry
3. Tying and Bundling
4. Price Discrimination
5. Imposing restriction on the lease, or contract
6. Dependent supply
7. Unfair low purchase prices
8. Unfair Purchase
9. Blocking access to essential facilities

Question 16

What are the kinds of mergers and acquisitions in the PCA?

Answer 16

1. Horizontal (merging of similar market)
2. Vertical (merging of same production line)
3. Conglomerate (neither horizontal or vertical)
   (EX: Pepsico and Quaker oats merger)

Question 17

What’s the general rule with mergers and acquisitions

Answer 17

If they substantially prevent, lessen, restrict competition in the relevant market. PROHIBITED

Exceptions:
1. If merger brings more gain in efficiency greater than the limitation of competition as a result of the merger
2. Parties in the M&A is facing actual or imminent financial failure, and they have no other choice but to merge

Question 18

PCC

Answer 18

Philippine Competition Commission

They adjust thresholds from time to time, almost always on March 1

Question 19

What are the ‘Billion Peso’ questions?

Answer 19

Size of party test (Value of assets/revenue of the ultimate parent entity)
If this exceeds 7.8 Billion pesos, they are required to provide notification to the PCC

Size of transaction test (Value of assets/revenue of the acquired entity)
If this exceeds 3.2 Billion pesos, they are required to provide notification to the PCC

You need to satisfy both tests