CA denies PCC plea to lift TRO on San Miguel buyout review

MANILA, Philippines – The Court of Appeals (CA) has denied the petition of the Philippine Competition Commission (PCC) to allow the agency to review and investigate PLDT Incorporated and Globe Telecom Incorporated’s P69.1-billion buyout deal of the telecommunication assets of San Miguel Corporation (SMC).

The CA’s Special 12th Division issued a gag order directing PCC to remove immediately from its website its preliminary statement of concern (PSOC), which contained an initial finding that the deal “is likely to substantially prevent, restrict, and lessen competition” within the telco industry.

In a resolution penned by Associate Justice Ramon Bato Sr, the appellate court directed the PCC, PLDT, and Globe “to cease and desist” from issuing public comments and statements that would violate the sub judice rule and subject them to indirect contempt of the court.

No public comments

“Applying the sub judice rule, PCC should immediately remove its PSOC posted in its website and refrain from making comments on the subject acquisition while the case is pending in court,” the resolution stated. (READ: San Miguel’s sale of telco business: Will consumers benefit?)

“Likewise, to be fair, PLDT should also refrain from making comments on the subject acquisition and desist from communicating their opinion to the public during the pendency of this case,” it added.

PLDT, Globe, and the PCC are at an impassé over the San Miguel telco buyout.

The PCC has argued that the deal falls within the scope of its review. PLDT and Globe insisted that the anti-trust body’s transitory rules provide the deal a “deemed approved” status.

Globe and PLDT claim that under the transitory rules of the PCC, the P69.1-billion deal “only needed a notice” to the commission and is “not subject for review.”

But the PCC said it is its call if a transaction is “deemed approved” after it determined the sufficiency of requirements.

PLDT: PCC drumming up sympathy

PLDT earlier filed a motion with the court, arguing that the publication of the PSOC on PCC’s website violates Republic Act Number 10667 or the Philippine Competition Act, which deems as confidential the PCC’s deliberations and investigations.

Likewise, PLDT alleged that PCC’s continuing communication with the media to drum up public sympathy violates the sub judice rule.

On August 26, 2016, the CA issued a writ of preliminary injunction against PCC from conducting any investigation which would impair the rights of PLDT, Globe, and SMC.

The injunction was issued “in order not to affect the rights of the consumers and to protect the move to improve the interned speed and connection nationwide,” the CA said. 

In denying the PCC’s motion for reconsideration, the appellate court stood by its findings that the existence of all the requisites for the issuance of a writ of preliminary injunction has been established by PLDT and Globe. 

The court said PLDT and Globe were able to establish the existence of a clear positive right that needs judicial protection during the pendency of the main case.

PLDT and Globe had argued that the deal has been deemed approved by operation of law since they had fully complied with the terms of the PCC’s transitory circulars. (READ: Jobless soon: 400 consultants of scrapped 3rd telco player)

PLDT said its wireless subsidiary, Smart, has been implementing the transaction and using the frequencies as part of its nationwide rollout.

The companies warned that a reversal of the transaction will result in “irreparable and incalculable injury to the public service.”

The CA noted that the utilization of the previously unused 700 megahertz (MHz) by PLDT and Globe under a co-use agreement approved by the National Telecommunications Commission (NTC) will greatly benefit the public.

The CA also branded as “misplaced” the PCC’s contention that the issuance of the injunction effectively disposed of the case on the merits. – with a report from Chrisee Dela Paz/Rappler.com