Philippine Competition Act 2024 Flashcards

sec.14 to sec. 22

1
Q

What is this law about?

To Prom C
To Prot C
Up inv&raquo_space; inc jobs

A

The Philippine Competition Act (PCA) or R.A. 10667 is the primary competition law of the Philippines for Promoting FAIR COMPETITION in the marketplace and PROTECTING well-being of CONSUMERS in the process.

The PCA was passed in 2015 after languishing in Congress for 24 years. It is a game-changing legislation envisioned to improve consumer protection and help accelerate investments and job creation in the country, consistent with the national government’s goal of creating more inclusive economic growth.

Enforcement of this law helps ensure that markets are open and free, challenging anti-competitive business practices while maintaining an environment where competition is driven by business acumen. A competitive market means a market with multiple buyers and multiple sellers, driving market prices lower and offering consumers more choices. A truly competitive market encourages efficiency and innovation, and forces businesses to excel. The act reflects the belief that competition:

promotes entrepreneurial spirit;
encourages private investments;
facilitates technology development and transfer, and
enhances resource productivity.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

CHAPTER III
PROHIBITED ACTS

Section 14. Anti-Competitive Agreements. –

Which of the following practices, between or among competitors, is per se prohibited under Section 14(a) of the Anti-Competitive Agreements?

a) Joint investment in technical development
b) Market research collaboration
c) Restricting competition as to price
d) Employee training programs

A

Correct Answer: c) Restricting competition as to price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

CHAPTER III
PROHIBITED ACTS

Section 14. Anti-Competitive Agreements. –

a-
In Section 14(b) of the Anti-Competitive Agreements, what type of agreement between competitors is prohibited?

a) Collaborative research initiatives
b) Market allocation and bid suppression practices
c) Employee benefit negotiations
d) Joint ventures for technological advancements

b-
According to Section 14(c) of the Anti-Competitive Agreements, which agreements may not necessarily be deemed a violation of the Act?

a) Agreements contributing to improving production or distribution
b) Agreements limiting market control
c) Agreements related to employee benefits
d) Agreements on market research sharing

A

a-
Correct Answer: b) Market allocation and bid suppression practices

Essay Type Question:

Discuss the key provisions of Section 14 of the Anti-Competitive Agreements. Explain the categories of agreements that are per se prohibited, those that are prohibited for having the object or effect of substantially preventing, restricting, or lessening competition, and the exceptions provided under Section 14(c). Provide examples to illustrate the application of these provisions and how they contribute to maintaining fair competition in the market.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

CHAPTER III
PROHIBITED ACTS

Section 14. Anti-Competitive Agreements. –

According to Section 14(c) of the Anti-Competitive Agreements, which agreements may not necessarily be deemed a violation of the Act?

a) Agreements contributing to improving production or distribution
b) Agreements limiting market control
c) Agreements related to employee benefits
d) Agreements on market research sharing

A

Correct Answer: a) Agreements contributing to improving production or distribution

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

CHAPTER III
PROHIBITED ACTS

Essay Type Question:

Discuss the key provisions of Section 14 of the Anti-Competitive Agreements.

Explain the categories of agreements that are per se prohibited, those that are prohibited for having the object or effect of substantially preventing, restricting, or lessening competition, and the exceptions provided under Section 14(c).

Provide examples to illustrate the application of these provisions and how they contribute to maintaining fair competition in the market.

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Section 15. Abuse of Dominant Position

Multiple Choice Questions:

What is a permissible price differential under Section 15(d) of the Prohibited Acts?

a) Price differential reflecting differences in the cost of manufacture
b) Any price difference between customers or sellers
c) Discriminatory pricing without justification
d) Fixed prices for a specific market segment

A

Correct Answer: a) Price differential reflecting differences in the cost of manufacture

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Section 15. Abuse of Dominant Position

Multiple Choice Questions:

According to Section 15(e) of the Prohibited Acts, what agreements are not considered unlawful?

a) Agreements preventing competition among entities
b) Exclusive distributorship agreements with termination rights
c) Price-fixing agreements
d) Agreements restricting intellectual property rights

A

Correct Answer: b) Exclusive distributorship agreements with termination rights

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Section 15. Abuse of Dominant Position

Multiple Choice Questions:

In Section 15(g) of the Prohibited Acts, what entities may be protected against unfairly low purchase prices?

a) Large-scale enterprises
b) Marginalized agricultural producers
c) Exclusively urban enterprises
d) International suppliers

A

Correct Answer: b) Marginalized agricultural producers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Section 15. Abuse of Dominant Position

Essay Type Question:

Discuss the key provisions of Section 15 of the Prohibited Acts, focusing on the abuse of dominant position.

Explain the various forms of conduct that are prohibited, such as selling below cost, imposing barriers to entry, discriminatory pricing, and restricting production.

Analyze the exceptions provided under the section, including permissible price differentials, lawful agreements, and the role of the Commission in promoting fair competition.

Provide examples to illustrate how these provisions contribute to maintaining a competitive market environment in the Philippines.

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

CHAPTER IV
MERGERS AND ACQUISITIONS

Section 16. Review of Mergers and Acquisitions.

What is the authority granted to the Commission under Section 16 of the Mergers and Acquisitions chapter?

a) Power to approve all mergers and acquisitions
b) Power to review mergers and acquisitions based on relevant factors
c) Power to initiate mergers and acquisitions
d) Power to veto all mergers and acquisitions

A

Correct Answer: b) Power to review mergers and acquisitions based on relevant factors

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

CHAPTER IV
MERGERS AND ACQUISITIONS

Section 16. Review of Mergers and Acquisitions.

Who has the discretion to determine the factors relevant to the review of mergers and acquisitions?

a) Congress
b) The President
c) The Commission
d) The entities involved in the merger

A

Correct Answer: c) The Commission

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

CHAPTER IV
MERGERS AND ACQUISITIONS

Section 16. Review of Mergers and Acquisitions.

According to Section 16, what is the primary focus of the Commission’s review of mergers and acquisitions?

a) Profitability of the entities
b) The impact on competition and relevant markets
c) The size of the entities involved
d) The political implications of the merger

A

Correct Answer: b) The impact on competition and relevant markets

Essay Type Question:

Discuss the significance of Section 16 in the regulation of mergers and acquisitions in the Philippines. Explain the power granted to the Commission and the factors it considers relevant in the review process. Analyze how the review process contributes to maintaining fair competition, protecting consumers, and preventing monopolistic practices. Provide examples of situations where the Commission’s intervention in mergers and acquisitions would be crucial for promoting a competitive market environment.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

CHAPTER IV
MERGERS AND ACQUISITIONS

Section 16. Review of Mergers and Acquisitions.

Essay Type Question:

Discuss the significance of Section 16 in the regulation of mergers and acquisitions in the Philippines.

Explain the power granted to the Commission and the factors it considers relevant in the review process.

Analyze how the review process contributes to maintaining fair competition, protecting consumers, and preventing monopolistic practices.

Provide examples of situations where the Commission’s intervention in mergers and acquisitions would be crucial for promoting a competitive market environment.

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

CHAPTER IV
MERGERS AND ACQUISITIONS

Section 17. Compulsory Notification

What is the threshold value for a merger or acquisition transaction that triggers compulsory notification to the Commission under Section 17?

a) P500 million
b) P1 billion
c) P2 billion
d) P5 billion

A

Correct Answer: b) P1 billion

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

CHAPTER IV
MERGERS AND ACQUISITIONS

Section 17. Compulsory Notification

What is the consequence if parties consummate a merger or acquisition agreement without providing the required notification to the Commission?

a) A warning letter
b) Administrative fine of 5% of the transaction value
c) Mandatory approval by the Commission
d) Voiding of the agreement

A

Correct Answer: b) Administrative fine of 1% to 5% of the value of the transaction

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

CHAPTER IV
MERGERS AND ACQUISITIONS

Section 17. Compulsory Notification

How long is the initial waiting period before parties can consummate a merger or acquisition following notification to the Commission?

a) 15 days
b) 30 days
c) 45 days
d) 60 days

A

Correct Answer: b) 30 days

17
Q

CHAPTER IV
MERGERS AND ACQUISITIONS

Section 17. Compulsory Notification

Essay Type Question:

Explain the significance of the compulsory notification requirement in Section 17 of the Mergers and Acquisitions chapter.

Discuss the purpose of the notification, the threshold value triggering the requirement, and the consequences of non-compliance.

Analyze how this provision contributes to the Commission’s oversight of mergers and acquisitions, ensuring fair competition and protecting market dynamics.

Provide examples of situations where the compulsory notification process would be crucial for preventing anti-competitive practices and safeguarding the interests of consumers and competitors.

A
18
Q

CHAPTER IV
MERGERS AND ACQUISITIONS

Section 18. Effect of Notification

Multiple Choice Questions:

What actions can the Commission take if, after notification, it determines that a merger or acquisition agreement is prohibited under Section 20 and does not qualify for exemption under Section 21?

a) Issue a warning
b) Prohibit the implementation of the agreement
c) Allow the implementation without changes
d) Impose a fine on the parties

Correct Answer: b) Prohibit the implementation of the agreement

In which scenario would the Commission consider allowing the implementation of the agreement?

a) If the parties pay a penalty
b) If the parties modify the agreement as specified by the Commission
c) If the parties file a legal challenge
d) If the parties ignore the Commission’s decision

Correct Answer: b) If the parties modify the agreement as specified by the Commission

What is the purpose of legally enforceable agreements specified by the Commission under option (c)?

a) Compensation for affected competitors
b) Ensuring compliance with competition laws
c) Facilitating faster implementation of the agreement
d) Allowing the Commission to participate in the agreement

Correct Answer: b) Ensuring compliance with competition laws

Essay Type Question:

Discuss the significance of Section 18 in the Mergers and Acquisitions chapter. Explain the powers vested in the Commission regarding the effect of notification and the possible courses of action it can take. Analyze the criteria that the Commission might consider in determining whether to prohibit, modify, or allow the implementation of a merger or acquisition agreement. Illustrate with hypothetical examples to demonstrate how the Commission’s decisions under this section contribute to maintaining fair competition, protecting market dynamics, and ensuring that mergers and acquisitions align with the objectives of the competition law.

A
19
Q

CHAPTER IV
MERGERS AND ACQUISITIONS

Section 18. Effect of Notification

Multiple Choice Questions:

What actions can the Commission take if, after notification, it determines that a merger or acquisition agreement is prohibited under Section 20 and does not qualify for exemption under Section 21?

a) Issue a warning
b) Prohibit the implementation of the agreement
c) Allow the implementation without changes
d) Impose a fine on the parties

A

Correct Answer: b) Prohibit the implementation of the agreement

20
Q

CHAPTER IV
MERGERS AND ACQUISITIONS

Section 18. Effect of Notification

Multiple Choice Questions:

In which scenario would the Commission consider allowing the implementation of the agreement?

a) If the parties pay a penalty
b) If the parties modify the agreement as specified by the Commission
c) If the parties file a legal challenge
d) If the parties ignore the Commission’s decision

A

Correct Answer: b) If the parties modify the agreement as specified by the Commission

21
Q

CHAPTER IV
MERGERS AND ACQUISITIONS

Section 18. Effect of Notification

Multiple Choice Questions:

What is the purpose of legally enforceable agreements specified by the Commission under option (c)?

a) Compensation for affected competitors
b) Ensuring compliance with competition laws
c) Facilitating faster implementation of the agreement
d) Allowing the Commission to participate in the agreement

A

Correct Answer: b) Ensuring compliance with competition laws

22
Q

CHAPTER IV
MERGERS AND ACQUISITIONS

Section 18. Effect of Notification

Essay Type Question:

Discuss the significance of Section 18 in the Mergers and Acquisitions chapter.

Explain the powers vested in the Commission regarding the effect of notification and the possible courses of action it can take.

Analyze the criteria that the Commission might consider in determining whether to prohibit, modify, or allow the implementation of a merger or acquisition agreement.

Illustrate with hypothetical examples to demonstrate how the Commission’s decisions under this section contribute to maintaining fair competition, protecting market dynamics, and ensuring that mergers and acquisitions align with the objectives of the competition law.

A
23
Q

CHAPTER IV
MERGERS AND ACQUISITIONS
Section 19. Notification Threshold.

What does Section 19 of the Mergers and Acquisitions chapter empower the Commission to do?

a) Set transaction values for all mergers and acquisitions
b) Adopt and publish regulations on various aspects of notification
c) Determine the market value of companies involved in mergers
d) Impose fines on parties involved in mergers

A

Correct Answer: b) Adopt and publish regulations on various aspects of notification

24
Q

CHAPTER IV
MERGERS AND ACQUISITIONS
Section 19. Notification Threshold.

Which of the following is within the purview of the regulations that the Commission may adopt according to Section 19?

a) Determining the market share of companies
b) Specifying information to be supplied for notified mergers or acquisitions
c) Setting mandatory merger conditions
d) Dictating the terms of merger agreements

A

Correct Answer: b) Specifying information to be supplied for notified mergers or acquisitions

25
Q

CHAPTER IV
MERGERS AND ACQUISITIONS
Section 19. Notification Threshold.

What is the purpose of exceptions or exemptions from the notification requirement as mentioned in Section 19?

a) Encourage more companies to merge
b) Simplify the notification process for certain cases
c) Increase government revenue through fees
d) Impose additional scrutiny on all mergers

A

Correct Answer: b) Simplify the notification process for certain cases

26
Q

CHAPTER IV
MERGERS AND ACQUISITIONS
Section 19. Notification Threshold.

Essay Type Question:

Examine the significance of Section 19 in the context of mergers and acquisitions regulation.

Discuss the importance of the Commission’s authority to adopt and publish regulations regarding transaction value thresholds, information requirements, exceptions or exemptions, and other procedural rules.

Explore how these regulations contribute to ensuring a fair and transparent process for notifying mergers or acquisitions. Provide examples of situations where exceptions or exemptions might be warranted and how the regulations help strike a balance between regulatory oversight and facilitating legitimate business transactions.

A
27
Q

CHAPTER IV
MERGERS AND ACQUISITIONS

Section 20. Prohibited. Mergers and Acquisitions

What is the primary criterion for determining whether a merger or acquisition is prohibited under Section 20?

a) Size of the companies involved
b) Location of the companies involved
c) Impact on competition in the relevant market
d) Number of employees affected

A

Correct Answer: c) Impact on competition in the relevant market

28
Q

CHAPTER IV
MERGERS AND ACQUISITIONS

According to Section 20, what authority is responsible for determining the prohibition of mergers or acquisitions?

a) Department of Finance
b) Securities and Exchange Commission
c) Competition Commission
d) Department of Trade and Industry

A

Correct Answer: c) Competition Commission

29
Q

CHAPTER IV
MERGERS AND ACQUISITIONS

Section 20. Prohibited. Mergers and Acquisitions

In what circumstances would a merger or acquisition be considered prohibited under Section 20?

a) If it involves any two competing companies
b) If it results in increased market share
c) If it substantially prevents, restricts, or lessens competition
d) If it only affects the local market

A

Correct Answer: c) If it substantially prevents, restricts, or lessens competition

30
Q

CHAPTER IV
MERGERS AND ACQUISITIONS

Section 20. Prohibited. Mergers and Acquisitions

Essay Type Question:

Discuss the role and significance of Section 20 in regulating mergers and acquisitions.

Explain the criteria used by the Competition Commission to determine whether a merger or acquisition is prohibited.

Provide examples of situations where a merger or acquisition might be considered to substantially prevent, restrict, or lessen competition in the relevant market.

Analyze the potential effects on consumers and the market as a whole when such prohibitions are enforced.

A
31
Q

CHAPTER IV
MERGERS AND ACQUISITIONS

Section 21. Exemptions from Prohibited. Mergers and Acquisitions.

Under Section 21, what condition allows the Commission to exempt a merger or acquisition from prohibition?

a) If the entities involved are small-scale businesses
b) If the merger brings about greater efficiencies than the limitation on competition
c) If the entities are state-owned enterprises
d) If the merger involves international corporations

Correct Answer: b) If the concentration has brought about or is likely to bring about gains in efficiencies greater than the effects of any limitation on competition

In what situation can a merger or acquisition be exempted according to Section 21?

a) When both parties are financially stable
b) When a party faces actual or imminent financial failure
c) When the merger involves only local companies
d) When the entities are engaged in similar business activities

Correct Answer: b) When a party faces actual or imminent financial failure

What is a specific condition mentioned in Section 21 for which an entity is not prohibited from continuing to own the stock or other share capital of another corporation?

a) The entity is a government-owned corporation
b) The acquisition was made prior to the approval of this Act
c) The entity is a multinational corporation
d) The stock is acquired for voting and control

Correct Answer: b) The acquisition was made prior to the approval of this Act

A
32
Q

CHAPTER IV
MERGERS AND ACQUISITIONS

Section 21. Exemptions from Prohibited. Mergers and Acquisitions.

Under Section 21, what condition allows the Commission to exempt a merger or acquisition from prohibition?

a) If the entities involved are small-scale businesses
b) If the merger brings about greater efficiencies than the limitation on competition
c) If the entities are state-owned enterprises
d) If the merger involves international corporations

A

Correct Answer: b) If the concentration has brought about or is likely to bring about gains in efficiencies greater than the effects of any limitation on competition

33
Q

CHAPTER IV
MERGERS AND ACQUISITIONS

Section 21. Exemptions from Prohibited. Mergers and Acquisitions.

In what situation can a merger or acquisition be exempted according to Section 21?

a) When both parties are financially stable
b) When a party faces actual or imminent financial failure
c) When the merger involves only local companies
d) When the entities are engaged in similar business activities

A

Correct Answer: b) When a party faces actual or imminent financial failure

34
Q

CHAPTER IV
MERGERS AND ACQUISITIONS

Section 21. Exemptions from Prohibited. Mergers and Acquisitions.

What is a specific condition mentioned in Section 21 for which an entity is not prohibited from continuing to own the stock or other share capital of another corporation?

a) The entity is a government-owned corporation
b) The acquisition was made prior to the approval of this Act
c) The entity is a multinational corporation
d) The stock is acquired for voting and control

A

Correct Answer: b) The acquisition was made prior to the approval of this Act

35
Q

CHAPTER IV
MERGERS AND ACQUISITIONS

Section 22. Burden of Proof.

According to Section 22, where does the burden of proof lie in the context of mergers and acquisitions?

a) With the government regulatory agencies
b) With the competitors of the entities involved
c) With the parties seeking the exemption
d) With the Commission

A

Correct Answer: c) With the parties seeking the exemption

36
Q

CHAPTER IV
MERGERS AND ACQUISITIONS

Section 22. Burden of Proof.

What must a party demonstrate when seeking exemption under Section 21(a)?

a) That the merger will not affect competition
b) That the entities involved are financially stable
c) That significant efficiency gains would not be realized without the agreement
d) That the merger is in the public interest

A

Correct Answer: c) That significant efficiency gains would not be realized without the agreement

37
Q

CHAPTER IV
MERGERS AND ACQUISITIONS

Section 22. Burden of Proof.

Essay Type Question:

Explain the concept of the burden of proof as outlined in Section 22 of the law regarding mergers and acquisitions.

Discuss the specific requirements and conditions that a party must fulfill when seeking an exemption under Section 21(a) and the significance of demonstrating that significant efficiency gains would not be realized without the agreement.

A