The Philippine Competition Commission (PCC) has filed a case against mass housing developer 8990 Holdings Inc. for abusing its dominance by imposing an exclusive internet service tie-up on its property in Tondo, Manila.
8990 Holdings has been accused of imposing a sole internet service provider (ISP) on its residents and tenants, preventing them from availing themselves of alternative fixed-line ISPs.
The existing provider offers slower internet speed at a price that would have afforded residents better service from other ISPs, the PCC said, citing complaints from residents.
For example, its 6 megabits per second service costs P2,949, which is equivalent to 50 Mbps in one ISP, and almost the same price for 100 Mbps in another ISP, the PCC said.
The case involves Urban Deca Homes Manila, a low-cost condominium that forms part of 8990 Holdings’ property portfolio. The PCC said Urban Deca had an exclusive deal with ISP iTech-RAR Solutions Inc.
This marked the first abuse of market dominance case filed by the competition watchdog, three years since it was established. The Philippine Competition Act prohibits abuse of dominant position, among other anticompetitive practices.
“This is a fair warning to businesses that resort to exclusive partnerships to corner profit and hinder the entry of other competitors in exercise of its market power,” said Enforcement Office Director Orlando Polinar.
“This act of abuse of dominance limits the choices made available to residents and is a violation of the competition law,” he said.
The enforcement office, PCC’s investigative and prosecutorial arm, found that the company’s exclusive partnership with one ISP prevented the entry and access of other providers into Urban Deca Homes Manila.
It also found that the property manager blocked other ISPs from installing fixed-line internet on units and from marketing their services to interested residents.
The PCC said the probe was triggered by numerous complaints filed by unit owners and tenants of Urban Deca Homes Manila, claiming they were prevented from applying for other ISPs when the in-house “Fiber to Deca Homes” service was slow, expensive and unreliable.
Residents complained that Fiber to Deca Homes charges P1,249 for 2 Mbps, which is almost equivalent to a 5 Mbps plan from other service providers, while its 5 Mbps monthly plan of P2,599 only costs P1,299 in other networks.
“Through this case, the PCC enforcement office intends to stop the property manager and developer from limiting the market for fixed-line internet so third-party providers may enter such market under reasonable terms and offer choices to the residents,” Polinar said.
Under the Philippine Competition Act, an entity found to have abused its dominance in the market could face a fine of up to P100 million.