02 Jun PCC to assess PLDT-Globe-SMC telco deal
The Philippine Competition Commission (PCC) is set to probe the P70 billion buy out of telecommunications giants Philippine Long Distance Company (PLDT) and Globe Telecom of San Miguel Corporation’s (SMC) telecommunications assets.
In an official statement, the Commission said that they have a keen interest in the proposed transaction because of the strong public clamor for faster, cheaper, and better quality internet and mobile services, and these could be stymied by a lack of competition in the sector. The Commission clarified that the new Philippine Competition Act is in full force and effect even if its Implementing Rules and Regulations have not been passed.
According to PCC Chair Arsenio Balicasan, they will immediately take action upon receipt of the documents related to the sale. After the submission of the documents, the anti-trust body has 30 days or up to 90 days if there are issues with the documents submitted, to rule whether the transaction is against the competition law.
The PCC also said that it is within its powers to evaluate all business agreements and transactions that may have potential impacts on market competition. PCC’s Memorandum Circular No. 16-002 requires entities involved in mergers and acquisitions valued at more than P1 billion to notify the Commission of the transaction, otherwise, they would be barred from consummating their agreement.
Balicasan however clarified that the law does not prohibit a duopoly, “What it is guarding against is the abuse of a dominant position [in an industry],” he said.
According to the Philippine Competition Act, it shall be prohibited for one or more entities to abuse their dominant position by engaging in conduct that would substantially prevent, restrict, or lessen competition. There is also a presumption of market dominant position if the market share of an entity in a relevant market is at least 50%, unless a new market threshold is set by the Commission.
Domingo, Ronnel. “SMC deal with PLDT, Globe still hangs.” Inquirer.Net. 1 June 2016. Web. 1 June 2016.
Lazo, Kristyn. “PCC to ‘move quickly’ to assess telecom deal.” ManilaTimes.Net. 30 May 2016. 1 June 2016.
Magkilat, Bernie. “PCC to probe $1.5-B PLDT-Globe-SMC telco purchase deal.” Manila Bulletin. 31 May 2016. Web. 1 June 2016.
PCC Statement on Globe and PLDT purchase of SMC’s Telecoms Business, InvestPhilippines.Info. 31 May 2016. Web. 2 June 2016.
Philippine Competition Act, R.A. 10667