I.

Legal perspective
- The basics of Philippine competition law
- How it progressed through time, and an understanding of the political economy around that,
and
- RA 10667, or The Philippine Competition Act, an act providing for a
- If you don;t have competition, like Phil, very high concentrations of wealth , using anti-
competitive behavior, and its part of the economic structure, but we
- Highly centralized, and stratifying those who control accumulation of wealth and those who
provide labor.
- You have to prove the elements of the crime, if there is proof beyond reasonable doubt, it is
subject to the hefty fine of two hundred pesos or six hundred (lol sarcasm, love it) This has
persisted to the present day. The political structure is controlled by those who control the
economic structure.
- This would now progress through the years
- Apply the policy rather that just provide punishment for the activites listed as crimes.A
reflection is how long it took.
- Competition policy is inclusive of competition law, and copetition law is a component of
competition policy, it has some impact and effect on competition. You ciould
- To avoid confusion, although it is not exclusive to the competition act, it is the primary
jurisdiction, so any conflicts has to be resolved by the PCA. If there is a doubt, its the PCA
through the PCC that will prevail.
- Not taken in a vacuum; its acutually a community effort; everybody is applying the competition
law
- The competiton act is about economic efficientcy. Then your law is dealing with the whole issue
of fairness, and competition as will be explained, is not about fairness or justice or humanity, its
about competition, its about the competitive pricing at work, and the logic, ruthless as it is, and
the result would be a just and fair system. The effective is efficiency, to avoid concentration.
- The assumption that they dont really happen.
- The nature of business is to achieve a monopoly in its particular niche; profit maximization. It is
important to drive the economy.
- It is the abuse od dominance that is bad. Either you exclude the competitor or you abuse the
consumer. That is what the PCA is supposed to do, that why it is necessary to have a law.
- Per e v rule of reason? General rule is that all violations of PCA is subject to a rule of reason. IF
youve proven that there is an agreement and that there is dominance, that is not per se a
violation, so the relevant agencies have to prove that the agreement is anti-competitive. When
there is a cartel, why else would they be engaging in an agreement with fixed prices? Its purely
anti-competitive. Keep it as a per se violation, so that is the only area where you get both, the
rest subject to rule of reason
- Merger control, not violation, but must be subject to a review. The reason why there are
threshholds and its impact on the economy
- The PCC can also restructure, and
- For repeat violation, a
- There was some compromises that had to be made because of interventions, and you can
probably guess which companies were intervening, so if there were some irrational portions, it
was probably due to interventions. If we do comparative law analysis, Eurpoean v American v
asia, youcould break it down to civil law tradition and common law. Eurpean model for civil law.
Mergers are closer to American model. Eventually we would also. Modifications would happen
through appeal cases. That is an important aspect of Philippine legal system. Why is not just the
PCC? This law will work only if everybody is a participant. You are either a producer or a buyer.
One way or another you are part of the economic system.
II. Economic perspective
- The canons on competition are fairly well known, but their applicationand how
- These economist had competition laws will be ignored
- The aspiration was to catch up with the west. You cannot compete with West with small and
medium scale industries. You incentivize. The nature
- The suspicion that the business community harbours is formidable, but it is actually pro-
efficiency, although it is misconstrued as anti-bussiness. The alternative is regulation, which is a
more direct way of controlling behavior. This was regulation with a view to promotion, instead
of consumer welfare. They have both promotional or regulatory duties, served by this
confusiom
- Strong interventions like industrial policies can be made to work. In that context, the east Asian
miracle economies is not a story of industrial policy,
- All existing contracts entered into by previous administrations can be revoked on the matter of
bad faith.
- Multiple veto centers
- Weak institution implies that you need softer intervention in the market.
- Competition policy is like a PPP
- A feature of interst is the type of market failure that is being addressed. May market failures
faced ? Some areas are not to be served, so if it is decided that it will be served, it must be
decided to give them certain subsidies. The locator will lose in the first ten years, but will recoup
as the market grows. Disgranting of a franchise is anti-competitive but it is at the same time
enhansibe of consumer well-fare.
- Case: PET scan ervice offered in the country. This is offereby by St Lukes. It produces things that
are taken in by the patient. Patients used to go abroad for this service, since it is not offered
locally. The charge of St Lukes was originally 120k. Now, we do not know what contract was
signed between St Lukes hospital regarding this permit. It must have made a representation that
they deserve some privileges. The fact oft the matter is that when a gov hospital req the same
equipment, the charge fell, because there was an alternative. This is an interesting case, and it it
abusing its domincance in the market. These are very large.
- Conglomerates compete in banking and infrastructure, and that competiton reduves market
power and advacnves consumer welfare.
- Size is sometimes vey good; it is the only way to survive the global market
- Research and development is a costly activity.
- Awarding a monopoly in order to allow them to reap the full benefits
- In a situation where there is too little competition, introducing more would
- Up to a certain threshold, it would lead to a decline; therefore the optimal balance is a crucial
task. What does thiss imply for the courts. From an economists point of view, what would be the
appropriate legal standard that would support 1. Fostering competition 2 innovation. In reality,
finding out if a particular act could be part of anti-competitive behavior, what is seen as low p
- process could be seen as anti-compettitive activity,
- Should the courts think of minimizing air costs as part of dscioon making analyses.
- The first error would refer to punishing a firm that might be actually engaged in non-competitive
behavior, and scond not punishing one not engaged in one
- So these errors depend on the costs and benefits.
- This would mean a decline.
- Sharing economies
- Adressing the twin goals becomes more interesting and challenging, as law and econokics are
complementing partners
DEFINITION OF COMPETITION
- No definition except to put in the elements of what you believe, since the elsments of perfect
competition, those are the things that are in the realm of theory, not practice. How do you
deifne competition? Effective competition is understood somehow which means that is some
reasonable restraint.
- While you are still developing, you should not allow competitive behavior
- IT says basically that the goal is to protect consumer welfare but there is an inclusion of
preventing economic concentration, and given the fact that it repeals RPC.
- If the action or product confirms production, the law is very clear that the provision should not
be used as a loophole. It may not necessarily be deemed a violation of this act, and the phrase
of contributing consumer welfare.
- The restrictions must not be unnecessary, must not impose unnecessary restrictions, and not
eliminate competition in a part in the market. In terms of looking at conduct, Sec 26 talks about
how the competition authoritites will determine if the competition is bad or not.
- Forebearance will not impede competition in the market, and forebearnce is consistent with
public interest. There are so many economic concepts, and it is not the way law is traditionally
framed.
III. INTERNATIONAL PERSPECTIVE
- Many of the challenges are common even for developing countries. What is particular is the
universality of it, more than 100 jurisdictions adopted competition law
- Lingua france
- Competition law is grounded in economics, but it is about the interpretation of economics in day
to day work.
- Brexit poses a great challenge for UK authri
- One of the challenges is international cartels. Marine houses cartel , it is a cartel between big
companies.
- The way we navigate is key as to the way we move forward. It was caught by the European
commisision, a coordinated effort. Aside from international cartel, there are more gray areas.
- The Eurpoean commission fined google for anti-compettive abuse of dominance.
- Competition policy is broader tha comptetion law. It encompasses advocacy efforts. The claw
took 2 years. The advocacy efforts are key
- Prioritization, what cases are you going to bring? These are all questions, but they impact
compettion law enforcements. These are questions that each and every jurisdiction is facing.
- Some of the isuses htat weve been discussing, judicial enforcenment, so we face common
challenges, yet we must bear in mind that we are dealing with
- Competition law is an economic
- There is another point; to what extend is it embedded in culture. HOW DO YOU CHANGE A
CULTURE?
- quotes
Competition policy evolves. Sometimes, some law enforcers, it feels like your shooting at a
mving target
It cannot be pursued as an end in itself without reference to the legal contect
Competiton law provides for a platform for national interests
Compettiion law is like a sponge that may promote diff considerations.
- Laws on dominance and regulation, this was a very large study that asked different authorities
what their objectives are, collaed the answers, and this is what they came up with. Consumer
welfare may mean different things to different people.
- What type of efficiencies? What type a competition authority may bhoose to prioritize
- Economic freedom; unique to competition law
- Protection of small and medium size enterprises.
- What you find recently is an increased use of the word fairness. But the way you interprest and
enforce it is a differenct issue
- Market access, open up the markets, as a tol to break down barriers, ninth goal is marketing
privatization, and this is really important in countries where the state plays a big role, and tenth
increasing competititveness.
- What are the challenges? How do we promote global governmetns?
- Part of what competition is about is the legal and economic contect of every country, you
cannot have a copy paste situation.
- We deal with anti-competitive agreement, merge of control,
- Importance of competitive policy, apart form the points I would like to bring in another point,
and this is the ageda for the upcoming forum, one is compettion and democracy. Reading it, you
see the relevance based on the points made before, rather than the hands of a select few, who
would have the influence, in an ideal word, that would be compettion law. How would you
establish mindsets? This is reflected in the intense effort to bring competition law to the
country. They help productivity improve
- UK EXPERIENCE: It has been there for quite a number of years.
- When it comes to market investigations, it is a big part of enforcement efforts at the moment,
and when it comes to the cartel offense, but we havne;t seen much of criminal prosecutions
today. This act is key becas
- You need some time to find a working
- The enforcement level fell, at that time, the competition market completed.
- You look at structural problems following such investigations. So we need to take a holistic
approach, it is the actual effect you have on the economy, but broader powers, representing the
benefits that UK consumers derive and that is quite substantiual, we need to look at the bigger
picture, its what the authority does in a particular environment
- The CMA is one of the ket periods
- We have one stop system, that case will be taken by the UK competition
- They immediate impact of Brexit, so they would really need to step up, but one needs to be
optmisitc, and they have the capacity to di it, even if not the respirces.
- We have national markets and domestic competition law. How do we take international
corporation forward, many mechanisms.
- In terms of substance, the key challenge is target markets
- Historically, in some industries, competition law never arrives the way we want it,
- Some consumers take benefit, some will lose.
- If you have a handful of firms, you have questions about privacy.