Gov’t lawyer says Telcos face stiff fines

The Office of the Solicitor General raised the specter of a massive fine that could be levied on PLDT, Globe and San Miguel Corp. for proceeding with a P70-billion telco deal without prior approval from the Philippine Competition Commission.

The OSG, which made the filing on behalf of the PCC, noted this in a comment to the sixth division of the Court of Appeals dated Oct. 4. It further called on the court to allow the PCC to continue the review of the sale of SMC’s telecommunications unit to PDLT and Globe.

The government and the telco giants are in the midst of a legal battle over whether the  May 30 deal required the approval of the PCC.

The fine for violating this section of the Philippine Competition Act, which took effect last year, could amount to as much as P3.5 billion due to the  size of the deal.

The OSG noted that money had already changed hands and that PLDT and Globe were  rolling out valuable telco frequencies acquired from SMC. The telco giants said the frequencies were needed to improve the quality of mobile internet services in the country, amid stiff public criticism.

“Since the subject acquisition was consummated by the parities in the absence of a valid notification, therefore, pursuant to Section 17 of the PCA, the subject acquisition is void, and the parties are liable for an administrative fine of one percent to five percent of the value of the transaction,” the OSG said.

The OSG said the Court of Appeals should also order the involved parties to “cease and desist from further implementing” the transaction, undo all acts related to the deal and pay the  penalties.

PLDT and Globe earlier argued that the deal should be “deemed approved”, citing a technicality in the PCC’s own memorandum circulars that were in effect when the transaction was launched. The PCC countered that the required documents submitted by the telcos were deficient and lacked crucial material information.

The PCC was conducting a “comprehensive” review into the transaction it said likely had anti-competitive implications. This probe had been halted temporarily by another division of the appellate court.