Course Code: BAM 242

Module #20

Name: ________________________________________ Class number: __________________

Section: _________ Schedule: _____________________ Date: _________________________

Lesson Title: PHILIPPINE COMPETITION ACT Part 1 Materials:

Lesson Objectives: Student Activity Sheet
At the end of this module, I can:
1. Give its definition and scope of application. References:
2. Explain the prohibited acts. R.A. No. 10667
Implementing Rules and
Regulations of R.A. No. 10667

Productivity Tip:
It is easy to procrastinate on work you find difficult or boring. This is why on a daily basis, it
makes sense to tackle your harder subjects first, while your mind is still fresh. Record your
deadlines and prioritize your work. Happy learning!

A. LESSON PREVIEW/REVIEW

1) Introduction (2 mins)

Republic Act No. 10667

otherwise known as the
Philippine Competition Act is the
country’s primary competition law.

It defines, prohibits and penalizes

anti-competitive practices. It
promotes free and fair competition in
trade, industry and all commercial
economic activities.

In this module, prepare to learn

more about this law specifically its
scope and the prohibited acts under
this law.
Source:https://www.phcc.gov.ph/wp-content/uploads/2017/03/Primer-on-the-Philippine-Competition-Act.pdf

2) Activity 1: What I Know Chart, part 1 (3 mins)

Try answering the questions below by writing your ideas under the first column What I Know.

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 Course Code: BAM 242
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Name: ________________________________________ Class number: __________________

Section: _________ Schedule: _____________________ Date: _________________________

What I Know Questions: What I Learned

1. Explain the concept of anti-
competitive agreement.

2. Explain the concept of abuse of

dominant position.

3. Give examples of prohibited

mergers and acquisitions.

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Name: ________________________________________ Class number: __________________

Section: _________ Schedule: _____________________ Date: _________________________

B. MAIN LESSON

1) Activity 2: Pre-Printed Content Notes (13

mins)

SCOPE OF APPLICATION:

Republic Act No. 10667 otherwise known as the Philippine

Competition Act applies to:

All entity engaged in trade, industry or commerce in

the Philippines or

In international trade, industry or commerce having

direct, substantial and reasonably foreseeable
effects in the Philippines, including those that result
from acts done outside the territory of the
Philippines.

However, these rules shall not apply to:

the combinations or activities of workers or employees nor to

agreements or arrangements with their employers when such combinations, activities, agreements or
arrangements are designed solely to facilitate collective bargaining in respect of conditions of
employment.
We are the only companies
PROHIBITED ACTS: offering this kind of product!
Let us agree on the price so that We cannot legally do that! It is
Anti-Competitive Agreements we can gain more profit! a violation of the Philippine
Competition Act.

Agreements between or among competitors which are

prohibited per se:
o Restricting competition as to price or components
thereof, or other terms of trade;
o Fixing the price at an auction or in any form of bidding,
including cover bidding, bid suppression, bid rotation
and market allocation, and other analogous practices
of bid manipulation.

Agreements between or among competitors which have the

object or effect of substantially preventing, restricting or
lessening competition shall be prohibited.
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o Setting, limiting or controlling production, markets, technical development or investment;

o Dividing or sharing the market, whether by volume of sales or purchases, territory, type of goods
or services, buyers or sellers or any other means.

Agreements other than those specified above which have the object or effect of substantially preventing,
restricting or lessening competition shall also be prohibited.

Exceptions to Anti-Competitive Agreements:

Those which contribute to improving the production or distribution of goods and services or to promoting
technical or economic progress, while allowing consumers a fair share of the resulting benefits, may not
necessarily be deemed a violation of the Act.

Entities that control, are controlled by or are under common control with another entity or entities, have
common economic interests and are not otherwise able to decide or act independently of each other,
shall not considered as competitors.

Abuse of Dominant Position:

Abuse of dominant position is committed when one or more entities engage in conduct
that would substantially prevent, restrict or lessen competition, including:

Selling goods or services below cost with the object of driving competition out of
the relevant market.

Imposing barriers to entry or

committing acts that prevent
competitors from growing within the
market in an anti-competitive manner.

Setting prices or other terms or conditions that discriminate

unreasonably between customers or sellers of the same
goods or services.
o However, there are exceptions to this, like
socialized pricing for the less fortunate sector of the
economy and the price differential which reflects
the difference in the manufacturing cost, sale or
delivery.

Imposing restrictions on the lease or contract for sale or

trade of goods or services concerning where, to whom or
in what forms goods or services may be sold or traded.

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o However, it is not unlawful for businesses to engage in permissible franchising, licensing,

exclusive merchandising, or exclusive distributorship agreements.
o Also, agreements protecting intellectual property rights, confidential information or trade secret is
not unlawful.

Making supply of particular goods or

services dependent upon the
purchase of other goods or services
from the supplier which have no
direct connection with the main
goods or services to be supplied.
Directly or indirectly imposing
unfairly low purchase prices for the
goods or services of marginalized
agricultural producers, fisherfolk,
micro, small medium scaled
enterprises, and other marginalized
service providers and producers.

Directly or indirectly imposing unfair purchase or selling price on their competitors, customers, suppliers
or consumers.
o However, prices that develop in the market as a result of or due to a superior product or process,
business acumen or legal rights or laws shall not be considered unfair prices; and
Limiting production, markets or technical development to the prejudice of consumers.
o Just like the one mentioned previously, the limitations that develop in the market as a result of or
due to a superior product or process, business acumen, or legal rights or laws shall not be a
violation of this Act.

MERGERS AND ACQUISITIONS:

Merger refers to the joining of 2 or more entities

into an existing entity or to form a new entity,
including joint ventures.

It is within the power of the Commission to

review mergers and acquisitions having a direct,
substantial and reasonably foreseeable effect on
trade, industry or commerce in the Philippines.

The Commission shall assess whether a

proposed merger or acquisition is likely to
substantially prevent, restrict or lessen
competition in the relevant market or in the

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Name: ________________________________________ Class number: __________________

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market for goods and services as may be determined by the Commission.

Section 3 Rule 4 of R.A. No. 10667 provides for the compulsory notification. Compulsory notification is
where the parties to the merger or acquisition are required to provided notification to the Commission of
the impending merger or acquisition.

If within the relevant periods stipulated, the Commission determines that the merger or acquisition
agreement is prohibited under Section 20 of the Act and Section 9 of the IRR and does not qualify for
exemption under Section 21 of the Act and Section 10 of the IRR, the Commission may:

o Prohibit the implementation of the agreement

o Prohibit the implementation of the agreement unless and until it is modified by changes
specified by the Commission; or
o Prohibit the implementation of the agreement unless and until the pertinent party or parties enter
into legally enforceable agreements specified by the Commission.

Prohibited Mergers and Acquisitions

Mergers or acquisition agreements that substantially prevent, restrict or lessen competition in the
Philippines in the relevant market or in the market for goods or services, as may be determined by the
Commission, shall be prohibited.

2) Activity 3: Skill-building Activities (with answer key) (18 mins + 2 mins checking)

Exercise I

1. Are all mergers and acquisition agreement prohibited? Explain.

________________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________

2. Distinguish between merger and acquisition.

________________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________

3. Why is selling goods or services below cost with the object of driving competition out of the relevant market
considered as abuse of dominant position?

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Name: ________________________________________ Class number: __________________

Section: _________ Schedule: _____________________ Date: _________________________

________________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________

3) Activity 4: What I Know Chart, part 2 (2 mins)

It’s time to answer the questions in the What I know chart in Activity 1. Log in your answers in the table.

4) Activity 5: Check for Understanding (5 mins)

Exercise I. TRUE or FALSE

__________1. Agreement between or among competitors restricting competition as to price or

components is an abuse of dominant position.

__________2. Imposition of barriers to entry or committing acts that prevent competitors from growing
within the market in an anti-competitive manner is an anti-competitive agreement.

__________3. Fixing the price at an auction or in any form of bidding between or among competitors is
an anti-competitive agreement.

__________4. Socialized pricing for the less fortunate sector of the economy is an abuse of dominant
position.

__________5. Businesses can enter into merger and acquisitions whenever they want.

A. LESSON WRAP-UP

Activity 6: Thinking about Learning

Congratulations for finishing this module! Shade the number of the module that you finished

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 Course Code: BAM 242
Module #20

Name: ________________________________________ Class number: __________________

Section: _________ Schedule: _____________________ Date: _________________________

Did you have challenges learning the concepts in this module? If none, which parts of the module
helped you learn the concepts?
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________.

Some question/s I want to ask my teacher about this module is/are:

__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________.

Learning Scores Action Plan

Date
Target/Topic

What module# did you What contributed to the quality of your

What were your
What’s the do? What were the performance today? What will you do next
scores in the
date today? learning targets? What session to maintain your performance or
activities?
activities did you do? improve it?

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Name: ________________________________________ Class number: __________________

Section: _________ Schedule: _____________________ Date: _________________________

FAQs

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