The Philippine Competition Commission (PCC) is encouraging micro, small and medium enterprises (MSMEs) to become familiar with the Philippine Competition Act (PCA) and go to the PCC if they believe there are violations of the law’s provisions.
PCC Commissioner Johannes Benjamin R. Bernabe in an October 23 forum on competition policy highlighted the importance for MSMES to be aware of what exploitative business practices can constitute the so-called “abuse of market dominance.”
“Kung yung mga nakaka-deal ng mga MSMEs na maaaring malalaking kumpanya, kung kayo naman po yung supplier or intermediate user na maaaring naiipit ng malaking players sa mercado, ito naman iyong sinasabing relevant provision na kayo ang maaaring magsumbong sa PCC [If the MSMEs are dealing with big companies in the market as supplier or intermediate user and find themselves at a disadvantage, this may be the relevant provision that you can raise with the PCC],” said Bernabe.
While it is not illegal to have a dominant position in the market, it is, however, illegal to abuse one’s dominant position, according to the PCC.
The competition law prohibits entities from abusing their dominant position in the market by engaging in conduct that would substantially prevent, restrict, or lessen competition.
Dominant position refers to “a position of economic strength that an entity or entities hold which makes it capable of controlling the relevant market independently from any or a combination of the following: competitors, customers, suppliers, or consumers,” according to the PCC’s Guide for Businesses.
Abuse of market dominance, meanwhile, is defined as “when an entity with a significant degree of power in a market engages in conduct that restricts competition.”
Such conduct, it added, includes predatory pricing, imposing barriers to market entry, and the unfair exercise of monopoly of power, among others.
This could include selling goods or services below market cost to drive out competition, imposing barriers to entry or preventing the growth of competitors, and making a transaction subject to the acceptance of parties that have no connection with the transaction.
It also covers setting prices or terms that discriminate between customers or sellers of the same goods or services, imposing restrictions on the lease or contract for sale or trade of goods or services, and making supply of particular goods or services dependent upon the purchase of other goods or services from the supplier.
Also prohibited are imposing unfairly low purchase prices for the goods or services of marginalized service providers and producers such as farmers, fisherfolk, and MSMEs.
It is also unlawful to impose unfair purchase or selling price on competitors, customers, suppliers, or consumers; and to limit production, markets, or technical development to the prejudice of consumers.
But Bernabe stressed that it is not only the big players but SMEs too that may find themselves in a dominant position, and they must thus refrain from abusing their position as SMEs are not exempted from the provisions of the PCA.
But more important, he said, is that MSMEs should increase their knowledge to protect themselves and exert their rights.
“Kung kayo ay nasa-subject sa [If you are being subjected to] exploitative, abusive behavior please exercise your right and inform the PCC,” he emphasized.
“Kung kayo po ay nakaka-experience ng ganito, lumapit po kayo sa amin … at puede po ninyong ikunsulta, isumbong, isangguni ang mga bagay na ito at para po kung kami ay mag-imbestiga at makita namin na ito’y dapat na ipagbawal ay mahihinto ang ganitong abusive, exploitative practice [If you experience this, you can come to us to consult, complain or raise these issues so we can investigate and if we see that it is illegal, put an end to such abusive, exploitative practice],” Bernabe concluded.