PRESS RELEASE
9 October 2024

PCC accepts settlement proposal from PALSCON to address anti-competitive practices

The Philippine Competition Commission (PCC) has accepted a P1.5-million settlement proposal offered by the Philippine Association of Legitimate Service Contractors (PALSCON) to address potential anti-competitive agreements in the organization.

Following an investigation on the association by the PCC Enforcement Office for suspected violations of Section 14 (b)(2) of the Philippine Competition Act (PCA), PALSCON opted to submit an undertaking to the Commission to correct its behavior.

The PCA prohibits agreements among competitors that aim to limit competition, such as dividing the market based on sales, territory, product or service type, or other factors. PALSCON’s Code of Ethics contained provisions which had the effect of limiting the competition among its members.

In 2021, during the PCC Enforcement Office’s full administrative investigation, PALSCON requested to engage in settlement discussions pursuant to Section 2.17 of the PCC Rules of Procedure. The Rules allow entities under investigation to offer a settlement to the Commission at any time during the investigation, but before the final decision is made.

After a series of negotiations, PALSCON submitted a Complete Revised Settlement Proposal on 14 July 2023, which the Commission approved on 5 October 2023.

To address PCC’s concerns, PALSCON has committed the following undertakings:

• Payment of settlement amount totaling to One Million Five Hundred Forty-Seven Thousand and Seventy-Nine Pesos and Sixty Centavos (Php 1,547,079.60);

• Attendance of the PALSCON board of directors and at least two senior officers of each PALSCON member to a competition law seminar to be organized by PCC;

• Appointment of a competition law compliance officer who will ensure compliance of PALSCON members with the PCA, PCC issuances, as well as attendance to competition law seminars by identified PALSCON officers;

• Issuance by PALSCON of acknowledgment recognizing their association’s inadvertent mistake or failure to properly communicate to its members the meaning of Article II, Section 3 of PALSCON’s Code of Ethics, which shall be published on PALSCON’s website for two (2) years; and

• Revision of PALSCON’s Code of Ethics, particularly, Article II, Section 3, to state:

PALSCON shall not support, tolerate, or condone anti-competitive practices between and among its members, as well as agreements, conduct, policies or regulations which are anti-competitive in nature.

“This settlement marks a crucial step towards fostering a more competitive and transparent environment within the industry,” said Armando L. Gutierrez Jr., PALSCON national president. “We hope it will encourage businesses to adopt fair practices and share their expertise for the benefit of all.”

PCC Chairperson Michael G. Aguinaldo echoed this sentiment: “By addressing unfair practices, this settlement forms part of the Commission’s holistic approach towards building a culture of competition in the country. We hope that eventually, associations and business groups become more wary of how their guiding principles create advantages or disadvantages that affect the level playing field.”

The Commission encourages voluntary compliance with the PCA and other competition laws by making available to the parties non-adversarial remedies provided under Section 37 of the PCA.

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REFERENCE:
publicaffairs@phcc.gov.ph
PCC Public Affairs and Research Division