PCC to resume review of exempt M&A transactions in 2022 – Manila Bulletin

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The Philippine Competition Commission (CPC) looks forward to continuing its review of mergers and acquisitions (M&A) transactions below lower and adjusted thresholds after the two-year period under the Bayanihan 2 Act expires in September 2022.

PCC

This is part of the agenda set by the CPC for this year to “regain momentum for inclusive growth and a more resilient economy.”

It should be remembered that the merger notification thresholds of 50 billion pesos for person size and transaction size remain in effect under the Bayanihan to Recover as One Law (Bayanihan Law 2) enacted by Congress. in 2020.

As such, the PCC only received four M&A notifications for the whole of 2021. The PCC approved two, while two transactions were withdrawn because they were exempt from mandatory notification. These four transactions, worth a total of 470 billion pesos, involved real estate (2), finance and insurance (1), and transport and warehousing (1). The two approved real estate mergers and acquisitions were City of Manila – Waterfront Joint Venture and City of Manila – JBros Joint Venture.

On September 15, 2021, the CCP regained its power to conduct a motu proprio review of non-notifiable transactions after a one-year moratorium under the Bayanihan Law 2.

The Mergers and Acquisitions Office (MAO) continued to diligently monitor transactions that may have resulted in a substantial decrease in competition in the market.

For merger review and competition enforcement, CPC Chairman Arsenio M. Balisacan stressed that “the CPC will monitor the markets and initiate motu proprio merger reviews of transactions that may have significantly reduced competition. “.

The Commission further recalls that transactions likely to significantly increase market concentration, lead to the creation of monopolies, erect barriers to entry or encourage anti-competitive behavior must be subject to review. competition control to ensure the protection of consumer welfare.

Going forward, Balisacan said it is essential for the CCP to remain aware of the many lessons it has learned amid the crisis as it fulfills its mandate to protect and promote competition.

For 2022, Balisacan said the Commission will continue to prioritize sectors considered essential during this period: e-commerce, health and pharmaceuticals, food and agriculture, energy and electricity, insurance, construction, water and telecommunications.

PCC will also develop and publish guidelines on the review of non-horizontal mergers.

Balisacan said PCC will step up enforcement activities to investigate markets in priority sectors, monitor complaints and respond to consumer and stakeholder inquiries.

The antitrust body is also committed to further developing its bid-rigging screening tool in partnership with other agencies to improve its ability to detect bid-rigging indicators in public procurement.

As part of research and promotion of competition, the PCC is committed to launching market research in the bus transport, telecommunications (Internet service providers, wholesale broadband and spectrum management sectors). ) and water.

It will also carry out competitive impact assessments in the energy, food and sport sectors.

For 2021, Balisacan said the PCC has prioritized enforcement efforts since early 2020, focusing on priority sectors such as food and agriculture, e-commerce, health and pharmaceuticals, energy and electricity, insurance, water, real estate, logistics and maritime transport.

The Competition Enforcement Bureau (PDG) seeks to protect consumers and vulnerable businesses from anti-competitive agreements and behavior, especially in times of economic hardship and uncertainty.

As of December 26, 2021, the CEO had handled a total of 869 inquiries and complaints. These include informal complaints about possible cartels and abuse of dominance, as well as clarifications of the law and the jurisdiction of the CCP in some cases.

At present, the CEO is undertaking a preliminary investigation and 18 Full Administrative Investigations (FAI). In 2021, she opened 10 ISPs regarding complaints involving companies in the telecommunications, water, energy and health sectors.

He also filed two statements of grievance or formal complaints with the Commission, which will now go to arbitration. One is in the tourism industry and the other is in the healthcare industry, both involving price fixing cartels which are prohibited under

Section 14 (a) of the Philippine Competition Law.

Since the CPC launched its Internet Service Provider (ISP) Working Group in March 2021, the CEO has received and dealt with over 100 ISP-related complaints. Most of these complaints were handled through voluntary compliance when issuing executive advisory letters by the CEO. A few remaining cases are currently being assessed.

As a result of the ISP task force’s efforts, the CEO issued three show cause orders in May 2021 to a major real estate developer and its property manager. This was in response to homeowners’ complaints that only one ISP is allowed to operate inside the developer’s subdivisions, thus limiting competition and consumer choice.

“These interventions are expected to result in greater consumer empowerment, lower prices and better quality of service, as ISPs compete more vigorously for consumers.

The shift to working from home arrangements, the rise of remote methods in the delivery of healthcare and education, and the increasing use of digital platforms for day-to-day transactions underscore the need to preserve competition in the marketplace. the sectors that support such activities, ”Balisacan said.


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