CA stops PCC review of San Miguel telco buyout deal
MANILA, Philippines (UPDATED) – The Court of Appeals on Wednesday, August 30, stopped the Philippine Competition Commission (PCC) from reviewing and investigating the PLDT Incorporated and Globe Telecommunications’ P69.1-billion buyout deal of the telecommunication assets of San Miguel Corporation (SMC).
In a 7-page resolution penned by Associate Justice Ramon Bato Jr, the CA's 12th Division issued a writ of preliminary injunction on the PCC review, as sought by PLDT in a petition.
The writ stops the PCC "from conducting further proceedings for the pre-acquisition review and/or investigation of the subject acquisition."
“After painstaking evaluation of the parties' arguments, taking into account the pertinent law and jurisprudence, in order to maintain the status quo ante while the case is being judiciously studied and to preserve the rights of the parties during the pendency of the instant petition and no to render ineffectual whatever judgment that may be rendered by this court, it would be more prudent for this court to grant petitioner's prayer for a preliminary injunction," the CA ruled.
It also said the issuance of the writ is needed to protect the PLDT's right to "safe harbor" or protection from challenge under Republic Act 10667 or the Philippine Competition Act.
P1-M cash bond
The CA, however, ordered PLDT to post a P1-million cash bond "to answer for whatever damages the respondent PCC will suffer should this court decide that PLDT is not entitled to the relief.”
In its petition, PLDT alleged that by reviewing the deal, the PCC had committed grave abuse of discretion amounting to lack or excess of jurisdiction, as it had disregarded its own rules in violation of the company’s right to due process and equal protection clause.
PLDT cited the transitory rules of the PCC under PCC Memorandum Numbers 16-001 and 16-002 to support its argument that upon filing by PLDT of the required notice, the acquisition is “deemed approved,” allowing it to immediately utilize the 700MHZ spectrum.
PLDT also said that since the National Telecommunications Commission – which has primary and exclusive jurisdiction on issues involving frequency – has given prior approval of the deal, a PCC review of the deal can be considered an encroachment of the jurisdiction and mandate of the NTC.
In its decision, the CA said PLDT has a right to be protected due to the “deemed approved” status extended to the acquisition by virtue of the PCC's transitory rules.
Globe has filed a similar petition, which had been consolidated into PLDT's petition before the CA's 12th Division.
PLDT told the Philippine Stock Exchange on Wednesday morning, August 31, that it received the resolution of the appellate court.
"We advise that our legal counsel in the subject case officially received today the Resolution of the Court of Appeals (12th Division) granting the preliminary injunction enjoining the Philippine Competition Commission from conducting further proceedings for the pre-acquisition review and/or investigation of the acquisition by PLDT and Globe of the telecommunications business of San Miguel Corporation," the Manuel V. Pangilinan-led telco said.
"Until further orders from the said Court. PLDT has instructed its legal counsel to immediately post the required bond in the sum of P1 million," PLDT added.
Globe, meanwhile, has not disclosed to the local bourse yet if the telco has already received the resolution.
PCC looks into legal options
While it said it will not comment on the court decision, the PCC pointed out that it still has the power to "prohibit implementation or require appropriate remedies," should the PCC conclude that the telco deal "substantially prevents, restricts, or lessens competition in any relevant market."
PCC chairman Arsenio Balisacan said in a text message that the government body is looking at legal options following the CA resolution.
"The PCC is currently examining the appropriate legal options in light of the resolution issued by the CA," he said.
The former socioeconomic planning secretary reiterated that the "PCC remains committed to promoting competition in the telecommunications industry so that the consumers can benefit from more reliable mobile services, faster Internet and lower prices," Balisacan added. – Chrisee Dela Paz/Rappler.com