Competition watchdog increases penalties for anti-competitive practices

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Metro Manila (CNN Philippines, January 25) — The Philippine Competition Commission has enacted inflationary adjustment on fines it slaps for violations of the country’s competition law.

This has raised penalties for anti-competitive agreements, abuses of dominance, anti-competitive mergers and violations of the compulsory merger notification by 10%, the competition watchdog said in a statement Monday. Memorandum Circular No. 21-001, which imposes the said increase, had also been published today.

Such inflation adjustment is provided for by the Philippine Competition Act every 5 years to ensure penalties maintain their real value from the time of the law’s enactment. The memorandum states no adjustment has been made since the act’s effectivity on August 8, 2015.

“Indexing the value of imposable fines to inflation ensures that the competition law’s sanctions maintain sufficient deterrent effect,” said Arsenio M. Balisacan, chairperson of the PCC.

The maximum fine for cartels, abuses of dominances and prohibited mergers is now ₱110 million for the first offense, up from the previous ₱100 million. Penalties for the second offense now range ₱110 million to ₱275 million, higher than the ₱100 million to ₱250 million fine imposed before.

Meanwhile, individuals committing such offenses for the third time and beyond will now be penalized ₱165 million to ₱275 million, compared to the ₱150 million to ₱250 million fine range in place prior.

Fines for violations done amid the Commission’s competition enforcement and merger review have likewise been increased. Offenses include failure or refusal to comply with any of the PCC's rulings, orders or decisions, with violators now being fined an adjusted ₱55,000 to ₱2.2 million penalty range.

Supplying the agency incorrect or misleading information, meanwhile, now merits up to ₱1.1 million penalty. The fine used to be only up to ₱1 million.

The schedule of fines will only apply to offenses committed after the memorandum circular takes effect February 9, 15 days after its publication.

However, the Commission also clarified factors like the gravity and duration of the offense, profits earned from the violation, and harm to consumers still determine the computation of the fines to be imposed on violators.

“Along with effective detection and prosecution of infringements, increasing PCC’s fines is meant to deter cartelistic and abusive business practices that take advantage of consumers amid the pandemic,” the Commission chief added.

The PCC has since imposed fines totaling to ₱162.5 million on offending entities since its creation in 2016.