Towards a level playing field

Two decades is how long it took for Congress to pass a fair competition law.

The long wait, however, may have been worth it.

That is, if the new law would eventually establish a level playing field in business in this country by prohibiting monopolies, cartels and oligopolies, all of which suppress competition.  

These are some of the prohibited acts under the new law: fixing price at an auction or any form of bidding; dividing or sharing the market, whether by volume of sales or purchases; limiting or controlling production, markets or investment; selling goods or services below cost with the object of driving competition out of the market; imposing barriers to entry; and giving preferential discounts and imposing conditions not to deal with competing entities.

The law provides stiff penalties for violations, ranging from fines (up to P250 million) to a prison term from 2 to 7 years. A Philippine Competition Commission will be tasked to enforce the law.

The author of the law, Sen. Bam Aquino, explained the rationale for it in these terms: “At its core, the competition law is about maintaining opportunities for all…so that present market leaders cannot exclude up-and-coming challengers who might be able to lower prices, improve product quality, offer consumers more choices, or spark the next wave of innovation in the market.”

But the significance of the Philippine Competition Act, also known as the Fair Competition Act, goes beyond all this.

Fair competition can lead to more investments that can create more jobs, especially for those living in the margins of society.

It can also spur economic development and social progress, and thus reduce the gap between the rich and the poor in Philippine society.  

The new law's capability to change the way we do business in this country, however, will depend in no small measure on the resolve of the Competition Commission that will enforce its wide-ranging provisions. They will have to implement the law with an even hand and without fear or favor.

        

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