Anti-trust agency approves SM Retail acquisition of Goldilocks
The Philippine Competition Commission (PCC) approved the acquisition by SM Retail Inc. of Goldilocks Bakeshop Inc., but it put the retail giant under monitoring for five years to check for anti-competitive practices.
In a statement issued on Tuesday afternoon, the competition watchdog said it approved the acquisition after the parties committed to address potential competition issues in the transaction.
SM Retail is a subsidiary of SM Investments Corp. (SMIC), which through another subsidiary, SM Prime Holdings Inc. (SMPHI), develops, owns and operates shopping malls.
SMPHI operates close to 70 malls in the Philippines.
Goldilocks has a network of more than 500 stores, some of which operate in SM malls. Moving forward, Goldilocks will become a subsidiary of SM Retail.
In essence, the antitrust watchdog was concerned that the retail giant would use its vast resources to give an undue advantage to its new subsidiary against the bakeshop’s competitors.
SM, in response, committed to address these issues.
PCC said the undue advantage could be in the form of manipulating available retail spaces, giving rivals bad locations, unfavorable lease terms, or even completely refusing to give rivals lease space.
SM, which has access to sales records of its tenants, could also share business information to the bakeshop’s rivals.
“While selection of tenants in a mall is market-driven and based on consumer preferences, a mall operator should not be allowed to discriminate mall tenants and lease applicants, especially those that compete with stores owned by the mall itself,” said PCC Chairman Arsenio M. Balisacan.
In its PCC-approved voluntary commitment, the SM Group promised to give Goldilocks’ competitors a fair shake in their lease at all times, according to the same statement. A copy of the voluntary commitment was not made available.
SMPHI also committed itself to data protection. This means that the mall operator would not share mall tenants’ information – such as sales data – to Goldilocks, thus creating a so-called information firewall.
PCC said the SM Group is legally obliged to comply with its commitment and submit reports to the competition watchdog.
Over a period of five years, the parties will be monitored periodically by a team of experts from PCC. Monitoring will also include random inspections.
If the monitoring team identifies violations or deficiencies during inspection, PCC said the SM Group shall promptly address the concerns.
Any breach of the conditions will subject SM to fines, additional remedies, and other measures available to PCC. /atm
