Think-tank bats for stricter anti-trust law

MANILA, Philippines - A private think-tank has urged Congress to act against corporate practices that stifle free competition and create monopolies.

The group called for the passage of a law that will mandate a review of proposed business mergers and consolidations before they are approved to check against abuses.

Forensic Law and Policy Strategies Inc. (Forensic Solutions), headed by former Justice Secretary Alberto Agra, said in its latest policy paper that an anti-trust law is necessary to ensure unfettered competition in Philippine industries and to position Filipino consumers as the supreme arbiter in a free market that yields the highest quality of goods and services at the lowest prices possible.

It noted that anti-trust legislation is badly needed especially now that the trend is towards the privatization and deregulation of vital industries, with governments getting off the back of business and ceding state control over economic activities.

“Mergers and acquisitions, which are tools for expansion and restructuring, have resulted in even greater market power being concentrated in fewer corporations. This environment is fertile ground for restrictive business practices that prevent true and fair competition,” it said.

Forensic Solutions stressed that the absence of legislation particularly addressing the effects of mergers and consolidations on market competition leaves the Philippines illequipped to police abuses and anti-competitive practices.

It noted that mergers and corporate consolidations in rich countries have a significant effect on developing economies like the Philippines, where the local subsidiaries of foreign corporate giants could engage in similar moves, leaving local consumers unprotected from such anti-competition practices.

It added that subsidiaries of multinationals that may behave competitively in industrialized countries where strong antitrust regulations are in place might be more inclined to indulge in anti-competitive practices in developing countries where there are few such regulations.

Forensic Solutions noted that two bills have already been filed by Senate President Juan Ponce Enrile and Sen. Miriam Defensor Santiago that aim to penalize questionable mergers.

Enrile’s Senate Bill 123 penalizes combinations or conspiracies in restraint of trade and all forms of artificial machinations that will injure, destroy or prevent free market competition.

It also prohibits stock or asset acquisitions, grant of proxies or voting rights, and board membership in two or more corporations that have the effect of substantially reducing competition or tending to create a monopoly.

On the other hand, Santiago’s Senate Bill 1835 amends certain provisions of the Revised Penal Code against monopolies by prescribing criminal penalties and fines on corporation of persons taking part in any monopoly or combinations of practices in restraint of trade.