The Philippine Competition Commission (PCC) stood its ground against PLDT Inc. and Globe Telecom, saying their joint P70-billion deal to acquire a telco rival would not be approved until a full review was completed.
The newly created antitrust regulator said the welfare of the public was at stake in this consequential deal.
PCC said on Friday it would pursue a “comprehensive” review of the transaction to acquire San Miguel Corp.’s (SMC) telecommunications assets held through Vega Telecom.
“A comprehensive review includes a determination of the relevant market, whether there will be substantial changes to the market structure, and the potential impact of the transaction on public welfare,” the PCC said in a statement.
The move could spark legal action from PLDT and Globe, which argued the transaction was already deemed approved, based on the PCC’s own “transitory” guidelines.
The development on Friday followed a more than week-long back and forth public tussle between the PCC and the PLDT-Globe telco duopoly that saw a stern warning from the regulator and the resubmission of transaction notices for the deal that was announced to the public last May 30.
“We assessed the new submissions of the parties, and based on the totality of information available to us, including public statements made by the parties, we believe there is a basis to conduct this review by virtue of the powers granted to the Philippine Competition Commission by the Philippine Competition Act,” the PCC said in its statement.
Globe general counsel Froilan Castelo said the firm would need to internally discuss options moving forward while PLDT did not immediately respond to a request for comment. Both companies earlier raised the possibility of filing a legal suit against the PCC.
PLDT and Globe said the deal was deemed approved under the PCC’s own memorandum circular No. 16-002. The circular detailed the treatment of deals that occurred after the effectivity of the competition law but before the effectivity of its implementing rules and regulations.
The SMC telco acquisition was sealed on May 30, days before the June 3 publishing of the law’s IRR, which would still take effect after 15 days, or by June 20 this year.
PLDT and Globe said they already filed the required deal notices under the PCC circular and that the transaction can no longer be challenged by the regulator.
However, the PCC said on Friday the circulars it issued were “transitory in nature and do not dilute the authority of the PCC to conduct substantive review under PCA, especially where national interest and public policy require it.”