PHILIPPINES Law and Practice Contributed by: Raoul Angangco, Sylvette Y Tankiang, Kristin Charisse C Siao and Ma Carla Mapalo, Villaraza & Angangco
efficiency gains that are greater than the effects of any likely limitation on competition resulting from the transaction. Efficiencies that increase market compe - tition may also be considered. To be taken into account by the PCC, efficiencies must be demonstrable, with detailed, verifiable evidence of anticipated price reductions or other benefits. Moreo - ver, the efficiency gains must be merger-specific and consumers must not be worse off as a result of the merger. For that purpose, efficiencies should be sub - stantial and timely and, in principle, benefit consumers in the relevant markets where competition concerns There is no explicit authority for the PCC to consider “non-competition” issues when reviewing transac - tions. However, as discussed above, the Merger Review Guidelines provide that the PCC assesses market definition within the context of the particular facts and circumstances of the merger under review. Rules governing foreign direct investment (specifically, the limitations on this) are not governed by the PCA or other rules or issuances of the PCC. The PCC does not require special filings for foreign direct investment. 4.7 Special Consideration for Joint Ventures An acquisition of shares in a corporation will be deemed a joint venture transaction if joint control exists between or among the new and existing joint venture partners post-transaction. In the context of joint ventures, joint control refers to the ability of the joint venture partners to substantially influence or direct the actions or decisions of the joint venture, whether by contract, by agency or otherwise. Joint control exists when an entity has the ability to determine the joint venture’s strategic commercial decisions (positive joint control) or to veto them (nega - tive joint control). would otherwise be likely to arise. 4.6 Non-Competition Issues As discussed, for the purposes of calculating the aggregate value of the assets to determine the size of the transaction, any amount of credit or any obliga - tions of the joint venture that any of the joint venture
parties agreed to extend or guarantee to the joint ven - ture at any time will be included.
5. Decision: Prohibitions and Remedies 5.1 Authorities’ Ability to Prohibit or Interfere With Transactions The PCC may prohibit or interfere with a transaction if it is likely to result in a substantial lessening, restric - tion or prevention of competition in the relevant mar - ket. The PCC may prohibit the implementation of the agreement or require modifications or amendments to address competition concerns. It may also impose penalties on the parties and nullify transactions that were consummated in violation of the compulsory notification requirements. Decisions will be in writing and the merger parties will be furnished with a certified copy of the decision. A non-confidential version may also be furnished to such persons as the PCC considers appropriate and published on the PCC website for public information. 5.2 Parties’ Ability to Negotiate Remedies Should a finding be made that a merger is likely to substantially prevent, restrict or lessen competition, the parties may negotiate remedies to address the competition concerns. At any stage of the review, the parties may propose to amend or modify the agree - ments or undertake commitments to remedy, mitigate or prevent the competition concerns identified by the PCC as arising from the merger. Before accepting any commitments, the PCC must be reasonably convinced that these are clearly suf - ficient to address the competition concerns and are proportionate to them. In instances where the PCC considers the commitments proposed by the merger parties to be a suitable remedy, the PCC may decide to consult the stakeholders concerned or the public and issue an invitation to comment on its website. Third parties may also be approached on an individual basis for their views. Typical Remedies The PCC considers two types of remedies to address competition concerns: structural and behavioural.
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