PHILIPPINES Law and Practice Contributed by: Raoul Angangco, Sylvette Y Tankiang, Kristin Charisse C Siao and Ma Carla Mapalo, Villaraza & Angangco
Determining Overlap To determine whether there are overlaps between the parties’ activities, the PCC looks at horizontal and ver - tical relationships between the parties in the relevant market. There is a horizontal relationship when the parties and/or entities within their respective notify - ing groups (which include subsidiaries, affiliates and other entities controlled by the UPE) provide products or services that directly compete in the same market. There is a vertical relationship when the parties and/or entities within their respective notifying groups oper - ate at different levels of a production or supply chain (such as when an entity from a party’s notifying group produces goods that use raw materials processed by an entity in the other notifying group). An “overlap” in the form of a vertical or horizontal relationship does not necessarily void the transac - tion unless it is shown that the transaction is anti- competitive. 4.3 Reliance on Case Law The PCC assesses market definition within the con - text of the particular facts and circumstances of the transaction under review. Relevant markets identified in past investigations in the same industry or inves - tigations conducted in other jurisdictions may be informative, but are not necessarily applicable to the PCC’s assessment of transactions. 4.4 Competition Concerns The PCC considers unilateral and co-ordinated effects. In analysing the potential for a horizontal merger to result in anti-competitive unilateral effects, the PCC assesses whether the merger is likely to sig - nificantly harm competition by creating or enhancing the merged firm’s ability or incentives to exercise mar - ket power independently. In analysing the potential for co-ordinated effects, the PCC assesses whether the merger increases the likelihood that firms in the market will successfully co-ordinate their behaviour or strengthen existing co-ordination in a manner that harms competition. 4.5 Economic Efficiencies Anti-competitive mergers may be exempted from pro - hibition by the PCC when the parties establish that the merger has brought about or is likely to bring about,
of the transaction is global and the parties have negligible or limited Philippine presence; and • joint ventures solely for the construction and devel - opment of a real estate development project.
4. Substance of the Review 4.1 Substantive Test
In reviewing transactions, the PCC assesses whether a transaction is likely to substantially prevent, restrict or lessen competition in the relevant market. 4.2 Markets Affected by a Transaction Market definition focuses on the extent to which customers would likely switch from one product to another (“relevant product market”) or from a supplier in one geographic area to a supplier in another area (“relevant geographic market”), in response to chang - es in prices, quality, availability or other features. The Merger Review Guidelines define a relevant market as one that could be subject to an exercise of market power likely to result in significant harm to competi - tion, rather than anti-competitive effects that are insig - nificant or transient. The PCC assesses market definition within the con - text of the particular facts and circumstances of the merger under review. In determining the relevant mar - ket, the PCC considers the following factors, among others: • the possibilities of substituting the goods or ser - vices; • the cost of distribution of the goods or services, their raw materials, their supplements and substi - tutes from other areas and abroad and the time required to supply the market from those areas; • the cost and probability of users or consumers seeking other markets; and • national, local or international restrictions that limit user access, access to alternative sources of sup - ply or suppliers’ access to alternative consumers. Once a market is defined, the PCC will, where circum - stances require, consider market shares and concen - tration as part of the evaluation of competitive effects.
512 CHAMBERS.COM
Powered by FlippingBook