PRESS RELEASE
7 October 2024

New PCC study scopes potential competition concerns and regulatory solutions in digital advertising

The Philippine Competition Commission (PCC) has released a market study highlighting the need for a discussion on emerging competition concerns and potential regulatory reforms in the Philippine digital economy.

The market study, entitled “Digital Platforms and Online Advertising: A Guide for Competition Policy,” highlights the need for the Philippines to develop robust domestic capacities to address potential competition issues in digital markets. This is particularly important given that the same big tech companies accused of abusing market dominance in advanced jurisdictions are also operating in the Philippines.

Unlike traditional markets, digital platforms such as social media and online marketplaces present unique challenges to how an online market is analyzed and how regulators address competition concerns. Among others, the study explores how digital platforms use advantages such as leveraging their user base for premium services and advertising, creating significant barriers to entry for new competitors.

The study recommends three action points for the Philippines to develop its internal capabilities: building relationships with advanced jurisdictions through bilateral and regional partnerships, considering advocating for specialized laws on the digital economy, and strengthening the implementation of the Philippine Competition Act through comprehensive guidelines for digital market investigations.

In 2023, the PCC published guidelines on the motu proprio review of mergers and acquisitions in digital markets. It also developed horizontal and non-horizontal merger guidelines and other internal investigation procedures for enforcement.

Without strong internal capacities, including a well-prepared workforce capable of investigating and resolving complex digital market issues, the country risks ineffective enforcement of antitrust laws. Therefore, building these capacities is essential for the competition authority to render sound decisions and ensure fair competition in the digital economy.

The study discussed initiatives in the United States (US) and the European Union (EU) against major technology firms, ranging from abuse of dominance in online shopping to manipulation of advertising space auctions. The EU’s Digital Markets Act (DMA) is often cited as a model for legislation aimed at curbing the market power of technology giants, but concerns are raised about its potential bias against US-based companies.

In Southeast Asia, the study flagged that there is no unified antitrust law specific to the digital sector. But efforts by the ASEAN Experts Group on Competition are underway to address competition issues in cross-border digital trade, including the development of an investigation manual and enhanced capacity-building initiatives.

To read the market study in full, visit https://bit.ly/PCCMarketStudy2024-01 or send an email to eo-pmd@phcc.gov.ph.

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REFERENCES:  
publicaffairs@phcc.gov.ph  
PCC Public Affairs and Research Division
eo-pmd@phcc.gov.ph
Economics Office-Policy and Markets Division