After 2 decades of languishing in Congress, a competition law that will ensure a level playing field in business and the economy was finally passed. Known as the Philippine Competition Act, it is slated to be signed by President Aquino soon.
This landmark legislation aims to slay monopolies, cartels and oligopolies—those who suppress competition and impose their goods and services on consumers, no matter how inferior and inefficient these are. Moreover, it addresses a structural flaw in our society, where power and wealth are concentrated in the hands of a few.
As the principal author, Senator Bam Aquino, has said: “At its core, the competition law is about maintaining opportunities for all…so that present market leaders cannot exclude up and coming challengers who might be able to lower prices, improve product quality, offer consumers more choices, or spark the next wave of innovation in the market.”
Moreover, studies have shown that effective competition laws lead to greater investments and ultimately, economic development. In a paper on competition policy, the Organization for Economic Cooperation and Development said that a “proper competition framework…attracts investment for development.”
Here are some of the law’s prohibited acts:
- Fixing price at an auction or any form of bidding;
- Dividing or sharing the market, whether by volume of sales or purchases;
- Limiting or controlling production, markets or investment;
- Selling goods or services below cost with the object of driving competition out of the market;
- Imposing barriers to entry; and
- Giving preferential discounts and imposing conditions not to deal with competing entities.
Penalties for violating the law range from fines (up to P250 million) to a prison term from 2 to 7 years. A Philippine Competition Commission will be tasked to enforce the law.
The Philippines is a latecomer and has a lot of catching up to do. We are the “only original member of the ASEAN without a comprehensive antitrust law,” said Senate President Franklin Drilon. With this law, he explained, “…we are much closer to ensuring that our country is at par with our Asean neighbors in preventing unfair trade behavior within our shores.”
That this vital legislation took such a long journey says much about the character of the leaders and legislators we choose as well as the elitist structure of our society. In the 1990s, when President Fidel Ramos went after monopolies, starting with the giant telecommunications firm PLDT, he urged Congress thrice to pass an anti-trust law. This, he believed, would institutionalize the liberal economic reforms his administration pushed in sectors such as shipping, banking and insurance.
It took more than 20 years for the law to be in place. Its enactment, of course, is simply the first step in correcting inequity. Much will depend on the will and integrity of the body that will enforce it.
Still, we look to the future with bright hopes that a stronger entrepreneurial spirit is unleashed, that new names and faces will emerge in a throbbing marketplace of opportunities, that the public will be served best, and that the economy will grow to be inclusive. – Rappler.com