Framework of fair competition
The Philippine Competition Commission (PCC) made the right move to question before the Supreme Court (SC) an earlier order of a Court of Appeals division stopping it from reviewing the acquisition by PLDT and Globe of the 700 megahertz (MHz) frequencies owned by a San Miguel Corp. subsidiary.
According to the PCC, if the transaction pushes through, PLDT and Globe would gain control of about 80 percent of available digital frequencies in the country, a situation that would make it difficult for a new player to break the duopoly.
In addition to its motion to overturn the appellate court’s order, the PCC wants the SC to stop the contracting parties from consummating the deal, which reportedly is being planned by the end of May.
This preemptive action is essential because once the sale and purchase agreement is completed, it may be difficult to unravel it because third parties may have already gained some rights or interests from it.
Unless there are compelling reasons, our courts are generally averse to the idea of unwinding accomplished facts or events.
Left unchallenged, the stop order would have reduced the PCC, early in its organization, to a mere bystander in a mega billion-peso contract that would have a profound impact on the telecommunications landscape of the country for many, many years.
It’s a test case for the PCC as it will determine its capability to execute its mandate “to prevent economic concentration which will control the production, distribution, trade or industry that will unduly stifle competition, lessen, manipulate or constrict the discipline of free markets.”
The resistance to the PCC’s exercise of its oversight power in big ticket transactions is understandable, if not expected.
For decades, Big Business in the country has been used to having its way in its operations with hardly any interference from government except for occasional slaps on the wrist.
Attempts by government to wield its regulatory or supervisory authority over commercial activities that are imbued with public interest are often looked at by the adversely affected parties as undue interference in private business.
To make matters worse, some courts are quick on the draw in issuing restraining orders against the government when these private companies run to them for help when they perceive administrative remedies will not be in their favor.
The PCC’s move would also give the highest court of the land the opportunity to pass upon the validity of the broad grant powers given by Congress to promote free and fair competition in the market to enhance economic efficiency.
Although the case revolves principally around the issue of whether the PCC can still look into the PLDT-Globe-SMC transaction despite its being “deemed approved” under PCC’s own memorandum circular, the SC is not barred from going beyond the parameters of the issue and looking into the salient provisions of the PCC’s organic law, Republic Act No. 10667.
Some quarters have described the PCC as a virtual super body for commerce and trade in the country. Some of its powers overlap, to some extent, with those of the Department of Finance, Department of Trade and Department of Justice.
It’s just a matter of time before the PCC finds itself in conflict with or at odds with any of the three departments mentioned over matters that the latter may believe are also within their respective areas of responsibility.
In the meantime, unless declared unconstitutional by the SC, those powers are considered valid and can be lawfully exercised. Except for PLDT and Globe, other private companies subject to the PCC’s authority have willingly complied with the rules.
Since time is of the essence in the resolution of the dispute between PLDT-Globe and the PCC, it is essential that the SC act on the petition quickly. Whoever wins the case is immaterial.
What is important is, at this early stage, the business community will know exactly how things stand on the extent of the PCC’s regulatory authority and the parameters of fair competition.
