Philippine Competition Act Flashcards
Who has the power to review mergers and acquisitions?
a. Philippine Competition Commission
b. Department of Trade and Industry
c. Securities and Exchange Commission
d. Commission on Audit
a
Which of the following are exceptions from prohibited mergers and acquisitions?
a. A party to the merger or acquisition agreement is faced with actual or imminent financial failure, and the agreement represents the least anti-competitive arrangement among the known alternative uses
b. The concentration is unlikely to bring gains in efficiencies that are greater than the effects of any limitation
c. Mergers that substantially prevent, restrict, or lessen competition
d. None of the above.
a
Parties to the merger or acquisition agreement wherein the value of the transaction ___________________________ are prohibited from consummating their agreement until _____ days after providing notification to the Commission
a. P100M; 30
b. P1B; 30
c. P1B; 90
c. P100M; 90
b
What is the effect if no notice was given for compulsory notification?
a. Agreement shall be voidable
b. The parties will be subject to administrative fine equivalent to 1% of the value of the transaction
c. An administrative fine of 1% - 5% of the value of the transaction will be imposed to the parties who violated
d. There will be no effect
c
This is defined as the ability to substantially influence or direct the actions or decisions of an entity, whether by contract, agency or otherwise.
a. Dominant position
b. Consolidation
c. Merger
d. Control
d
Dominant position refers to a position of economic strength that an entity or entities hold which makes it capable of controlling the relevant market independently from any or a combination of the following, except:
a. Competitors
b. Customers
c. Consumers
d. None of the choices
d
The following agreements, between or among competitors, are prohibited per se, except:
a. Fixing price at an auction or in any form of bidding
b. An agreement transaction contributes to promoting technical or economic progress
c. Restricting competition as to price, or components thereof
d. Choices a and c
b
Which of the following is an abuse of dominant position?
a. Selling goods or services below cost
b, Restricting competition as to price
c. Dividing or sharing the market, whether by volume of sales or purchases, territory, type of goods or services, buyers or sellers or any other means
d. Setting or controlling production, markets, technical development, or investment
a
Reason: Once you have maintained a dominant position, you are a leader. In order to keep selling your goods and drive away potential competitors, you will lower your prices below cost, even if it results to a loss, as long as you sell more goods.
For first offense of a person or entity in connection with investigations relative to anti-competitive agreements, abuse of dominant position, etc., how much is the administrative fine?
a. 100M - 200M
b. 100M
c. Up to 100M
d. P50,000
c
In the event an entity fails or refuses to comply with a ruling by the PCC, what should be the consequences?
a. Fine of P100M - P200M plus imprisonment
b. Penalty of P50K - P2M for each violation and a similar amount of penalty for each day until the entity complies
c. Penalty not to exceed P100M plus imprisonment
d. Any of the choices above
b
The following constitutes abuse of dominant position. Choose the exception:
a. Selling goods or services above cost with the object of not driving competition out of the relevant market
b. Imposing barriers to entry or committing acts that prevent competitors from growing within the market in an anti-competitive manner
c. Making a transaction subject to acceptance by the other parties of other obligations which, by their nature or according to commercial usage, have no connection with the transaction
d. Setting prices or other terms or conditions that discriminate unreasonably between customers or sellers of the same goods or services, where such customers or sellers are contemporaneously trading on similar terms and conditions, where the effect may be to lessen competition substantially
a.
“Selling goods or services ABOVE cost…object of DRIVING…”
Refers to the ability to substantially influence or direct the actions or decisions of an entity
Control
Control is presumed to exist when the parent owns, directly or indirectly, through subsidiaries, more than ____ of the voting power of an entity, unless in exceptional circumstances, it can clearly be demonstrated that such ownership does not constitute control.
One-half (1/2)
Control also exists even when an entity owns one half (1/2) or less of the voting power of another entity when (choose exception):
a. There is power over more than one half (1/2) of the voting rights by virtue of an agreement with investors
b. There is power to direct or govern the financial and operating policies of the entity under a specific provision of the law
c. There is power to appoint or remove the majority of the members of the board of directors or equivalent governing body
d. There is power to cast the majority votes at meetings of the board of directors or equivalent governing body;
b.
“There is power to direct or govern the financial and operating policies of the entity under a statute or agreement”
Dominance can exist only on the part of one entity, but it can never exist on the part of two or more entities. TRUE OR FALSE?
FALSE.
