Tuesday, June 2, 2009

We need a competition movement!

Senate passes anti-trust measure
By Aurea Calica Updated June 03, 2009 12:00 AM

MANILA, Philippines - The Senate has passed on third and final reading the anti-trust bill that prohibits and penalizes business cartels and monopolies to protect consumers from abuse.

Senate Bill No. 3197 or the Competition Act of 2009 will discipline the country’s market system to avoid unfair trade and anti-competitive practices.

The bill authored by Senate President Juan Ponce Enrile, Senators Miriam Defensor-Santiago, Antonio Trillanes IV, Manuel Roxas II and Edgardo Angara defined and imposed penalties for business cartels, monopolies, monopoly power or abuse of market power through price fixing and price discrimination, bid rigging, limitation and control of markets, agreement to limit and or control markets, and tie-in arrangements.

Enrile said the anti-trust bill would cover not only oil companies but also pharmaceutical, cement, food products and other industries where there is possible collusion among traders.

Enrile said that the proposed law is patterned after anti-trust laws in the United States and in some European countries, the purpose of which is to foster sound business ethics that would protect the ordinary consumers.

Cartelization includes the following agreements: Fix selling price of goods or other terms of sale; limit supply or output; divide the market, whether by volume of sales or purchase or by territory, by type of goods sold, by customers or sellers, or by any other means; exclude or limit dealings with particular suppliers or sellers from supplying or selling goods, or customers from acquiring of buying goods; applying dissimilar conditions to equivalent transactions with other parties, thereby placing them at a competitive disadvantage; and making the transactions in particular goods dependent upon other conditions which have no connection with subject of the transaction.

The penalties that can be imposed for every violation cover a fine of not less than P10 million and not exceeding P50 million for a person; P250 million to P750 million if a firm and imprisonment not exceeding 10 years or both at the discretion of the court.

“In the alternative, a fine shall be imposed in the amount double the gross proceeds gained by the violator or double the gross loss suffered by the plaintiffs,” the bill read.

The Senate President explained that despite the existence of laws aiming to foster competition in the industries, they proved to be inadequate to stop the detriments of anti-competitive structures and behavior in the market. “Moreover, while there are special laws which have provisions that encourage competition, it is a fact that not one corporation was ever prosecuted for anti-trust acts,” he said.

“We need to enact an anti-trust measure. In fact, the adoption of a competition policy has been included in the Medium-Term Development Plan for 2004 — 2010 to create a competitive environment not only to ensure efficiency among big business firms and corporations,” Enrile further said. 

“More importantly, we need to foster an environment that is conducive for the development of micro, small and medium enterprises, he said.

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