PHILIPPINES Law and Practice Contributed by: Raoul Angangco, Sylvette Y. Tankiang, Kristin Charisse C. Siao and Ma. Carla Mapalo, Villaraza & Angangco
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 changes in prices, quality, availabil - ity, or other features. The Merger Review Guide - lines define a relevant market as one that could be subject to an exercise of market power that would likely result in significant harm to competi - tion, rather than anti-competitive effects that are insignificant or transient in nature. The PCC assesses market definition within the context of the particular facts and circumstanc - es of the merger under review. In determining the relevant market, the PCC considers the following factors, among others: • the possibilities of substituting the goods or services; • the cost of distribution of the goods or ser - vices, its raw materials, its supplements and substitutes from other areas and abroad, and the time required to supply the market from those areas; • the cost and probability of users or consum - ers seeking other markets; and • national, local or international restrictions that limit the access by users or to alternative sources of supply or the access of suppliers to alternative consumers. Once a market is defined, the PCC will, where circumstances require, consider market shares and concentration as part of the evaluation of
horizontal and vertical relationships between the parties in the relevant market. There is a horizon - tal relationship when the parties and/or entities within their respective Notifying Groups (which include subsidiaries, affiliates and other entities controlled by the UPE) provide products or ser - vices that directly compete in the same market. There is a vertical relationship when the parties and/or entities within their respective Notifying Groups operate at different levels of a produc - tion 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 trans - action unless it is shown that the transaction is anti-competitive. 4.3 Reliance on Case Law The PCC assesses market definition within the context of the particular facts and circumstanc - es of the transaction under review. Relevant markets identified in past investigations in the same industry or investigations conducted in other jurisdictions may be informative but are not necessarily applicable to the PCC’s assess - ment of transactions. 4.4 Competition Concerns The PCC looks at unilateral effects and co- ordinated effects. In analysing the potential of a horizontal merger to result in anti-competitive unilateral effects, the PCC assesses whether the merger is likely to harm competition significant - ly by creating or enhancing the merged firm’s ability or incentives to exercise market 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
competitive effects. Determining Overlap
To determine whether there are overlaps between the parties’ activities, the PCC looks at
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