House leaders say anti-trust bill to be passed next week

MANILA, Philippines - The House of Representatives aims to pass next week a landmark anti-trust bill that seeks to curb monopolies, and protect consumers and the economy from unfair competition, Speaker Feliciano Belmonte Jr. said yesterday.

The House leader issued the statement after the closed the period of debates on the proposed Philippine Fair Competition Act ended on Tuesday after deleting a controversial provision that allows predatory pricing if done “in good faith.”

Belmonte, the principal author of the measure, said the House aims to pass the bill next week or “before we adjourn” on March 18.

He earlier said the House will not allow itself to be pressured by certain big business interests into passing a watered-down anti-trust law.

During the final floor deliberations earlier this week, Abakada party-list Rep. Jonathan de la Cruz asked sponsors of the bill to delete the “good faith” portion in the measure that was smuggled into the Senate version and carried over to the House.

He said the “good faith” provision in the measures provides an “escape clause” for big companies should they abuse their dominant position by running to the ground their smaller competitors in the guise of “acting in good faith.”

He said the good faith provision “has no place in an anti-competition act, just like what we are discussing right now. 

“The alternative, Mr. Speaker, will be to strike out the phrase ‘in good faith’, because in almost all competition laws, whether in ASEAN or in Europe or in the US, the well-established general presumption is that prices held average of variable cost applied for an undertaking in a dominant position are regarded as abusive in themselves without the necessity of accepting them by way of good faith because the good faith is an escape clause,” he said in his interpellation.

 “Because dominant players can always claim good faith, and it will be very, very hard for any competitor, Your Honor, to even claim that such good faith is not available to the dominant player,” he said.

Davao del Norte Rep. Antonio Rafael del Rosario, one of bill’s authors and defenders, initially rejected the deletion proposal of De La Cruz saying it would ‘change the meaning of the bill” but nevertheless agreed to have it stricken out during the amendment period.

The House concluded its period of interpellation on the measure Tuesday night even as some lawmakers have expressed interest to quiz the sponsors of the measure such as House ways and means chairman Marikina Rep. Romero Quimbo and Act Teachers party-list Rep. Antonio Tinio.

The ‘good faith’ clause was inserted in the bill under Abuse of Dominant Position, which prohibits companies and other business entities from selling goods or services at below cost or at super discount prices just to eliminate their competition and also prevent the entry of new players in the market.

But such an act would be deemed legal if companies or business establishments would profess that it acted in “good faith” in pricing its product or service very low with no ill intention toward its smaller competitors.

The original anti-trust or competition bills filed in the Senate and three of which authored by Sens. Miriam Defensor-Santiago, Teofisto Guingona and Sergio Osmena did not contain the “good faith” provision.

Sen. Bam Aquino, sponsor of the measure, likewise did not include the “good faith” clause in his committee report after holding extensive deliberation and getting inputs from business and competition experts.

The controversial clause was inserted as the bill underwent Senate plenary deliberations.

Winston and Camel maker Japan Tobacco International Philippines Inc. (JTIP) has earlier written legislators to express its concern on the clause in the proposed measure, which allows unscrupulous companies to resort to predatory pricing in the guise of “good faith.”

JTIP said the “good faith” clause is not found in similar legislation or fiat in other countries, including those from the ASEAN and European Union (EU).

 “We believe in fair competition and in the approval of a genuine anti-trust measure,” JTIP general manager Manos Koukourakis said.

Manos said: “If retained in the proposed measure, it will provide a legal safeguard for dominant market players who can hide under the cloak of “good faith” while continuing with their predatory pricing strategy and shall have the effect of diluting the legal objective of prohibiting anti-competitive pricing strategies.”

 “We note that as presently proposed, the proposal is on some important aspects not in line with established core principles of competition law and standard provisions in competition laws around the world,” he said in a letter sent to members of the Senate and House.