PCC flags provisions in House stimulus bill ‘curbing’ anti-competition oversight

The Philippine Competition Commission (PCC) has raised the red flag  in the House of Representatives’ approved economic stimulus bill, which it claimed will weaken its regulatory oversight over anti-competitive behavior in time of the COVID-19 crisis.

The PCC published a position paper on Friday on pending stimulus measures in the Congress, such as the House Bill No. 6815 or the Accelerated Recovery and Investments Stimulus for the Economy of the Philippines Act (ARISE) approved on third and final reading last June 4.

While the antitrust body supports the overarching purpose of the ARISE bill, the PCC said it “respectfully expresses its reservations on certain provisions of the proposed measure, which may negate not just the welfare-enhancing objectives of this landmark economic stimulus package, but also the overall state of competition.”

The commission said it is specifically concerned with the potential detrimental impact likely to be caused by Sec. 12 of the ARISE Bill concerning “regulatory relief for business entities.”

The questioned Sec. 12 “Regulatory Relief for Business Entities” of the proposed house bill states:

“The BIR, PCC, SEC and other relevant regulatory agencies are likewise directed to desist from imposing fines and other monetary penalties for non-filing, late filing, failure to comply with compulsory notification and other reportorial requirements relating to business activities and transactions that promote continuity and capacity-building in all sectors of the economy.

“For a period of six months from the lifting of the CQ, the PCC, SEC and other relevant regulatory agencies shall review all pending matters before them or those subject of any ongoing review, fact- finding or preliminary inquiry or investigation, in order that business activities and transactions that promote continuity and capacity-building in all sectors of the economy shall be promptly resolved or otherwise allowed to proceed unimpeded.

“The PCC, during the same period which may be extended for an additional period of six months thereafter, shall desist from requiring any submission by parties to any proceedings before it, including fact-finding or preliminary inquiries, and from issuing any show cause order, cease and desist order, subpoena, statement of concern or similar statement and other similar issuances: Provided, That nothing herein shall prohibit the PCC from issuing decisions approving any transaction or transactions, confirmation of non-coverage, commitment decisions and similar orders relating to business activities and transactions that it shall have determined to promote continuity and capacity-building as well as orders and decisions relating to the enforcement of Chapter III of the Philippine Competition Act (PCA): Provided, further, that all mergers and acquisitions involving enterprises engaged in essential businesses entered into 30 days prior to or during the CQ and for a period of one year thereafter shall be deemed to promote continuity and capacity-building, and are hereby declared exempt from the compulsory notification and related requirements under the PCA.”

The PCC said such provisions which “specifically target the functions of the PCC were only proposed and adopted during the period for individual amendments on the House floor.”

“The PCC was thus not afforded the opportunity to be heard and explain to our congressmen how these amendments may result in anti-competitive outcomes,” it said.

The provisions, it said, creates a limit on the mandate of the PCC under the PCA, by requiring it, among others, to desist from (i) imposing fines and other monetary penalties; (ii) from requiring any submission by Parties to proceedings before it, including fact-finding or preliminary inquiries; and (iii) issuing any show cause order, cease and desist order, subpoena, statement of concern or similar statement and other similar issuances.

“Ultimately, the proposal seeks to curb the PCC’s exercise of its core functions of merger review and enforcement against anti-competitive acts for a minimum period of six months,” it said.

The antitrust body said it recognizes the value of regulatory flexibility for business enterprises as they recover from the unforeseen economic hardships brought about by COVID-19.

But, it said, “this should not come at the expense of exposing the general public— who are likewise feeling the financial brunt caused by the pandemic—to potential abuses by unscrupulous businesses brought about by a relaxation of competition law, as proposed by the subject provision of the ARISE Bill.”

“As explained below, an abdication of the enforcement of antitrust law, even though on a temporary basis, will likely create more harm than good, especially at a time when the structural foundations of our economy are still reeling from the ill-effects of COVID-19,” it said. —LDF, GMA News