PRESS RELEASE
11 July 2024

PCC issues guidelines for merger remedies

The Philippine Competition Commission (PCC) has published the Guidelines on Merger Remedies, which outlines the agency’s approach when assessing the merging parties’ proposals to address competition concerns arising from merger and acquisition (M&A) transactions.

Approved by the Commission on 9 May 2024, the Guidelines contain guidance on the design, selection, and implementation of merger remedies. Under the PCC’s merger rules, transacting parties may offer remedies to address competition concerns, which they may propose anytime during the conduct of the merger review.

The PCC acknowledges that the Guidelines are not a one-size-fits-all solution to all M&A transactions, as each transaction requires a tailored assessment. The Guidelines nonetheless serve as a core set of principles informing the choice and design of merger remedies.

In choosing and crafting merger remedies, the transacting parties must take note of the following:

• Remedies must be designed in such a way that they address the competition concerns identified during the merger review. It should be clearly demonstrated that any proposed remedy is aimed at addressing the competition harm.

• Remedies must be effective in addressing the harms to competition. The proposed remedies should address both the substantial lessening of competition and its adverse effects.

• Remedies must be commensurate to the harm being addressed.

• The PCC may impose additional conditions as needed.

The Guidelines outline two main types of merger remedies: behavioral and structural. Behavioral remedies involve restrictions on certain business conduct of the merged firm post-transaction, while structural remedies may include divestiture or sale of assets. The PCC may also require ancillary measures to ensure proper implementation of the chosen remedies.

The Guidelines also address remedies for M&As in digital markets, including firewall and mandatory licensing provisions to address data access concerns. Additionally, the Guidelines provide for ways by which the PCC can cooperate with competition and regulatory agencies abroad in case the M&A transaction is under review in at least one competition jurisdiction other than the Philippines.

The PCC is mandated by the Philippine Competition Act (PCA) to review M&As and prohibit transactions that will substantially lessen competition in the relevant market. The law also allows the PCC to consider remedies proposed by merging parties to address any harm to competition that may arise from a proposed transaction. The PCC’s merger review mandate is aimed at ensuring that competition remains in a market after an M&A is consummated, thereby helping protect consumer welfare.

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

Link: https://www.phcc.gov.ph/press-releases/pcc-issues-guidelines-for-merger-remedies/