Download Philippines Adopts New Corporate Rehabilitation And

News | regional update >>
Regional updates
CHINA
14
CHINA
Paul Weiss
Philippines
SyCip Salazar Hernandez
& Gatmaitan
SINGAPORE
Loo & Partners
Each month, ALB
draws on its panel
of country editors to
bring readers up to
date with regulatory
developments across
the region
Abuse of Dominant
Market Position –
Implementing Rules
Soon To Be Established
On May 25, 2010, the State
Administration of Industry and
Commerce (“SAIC”) issued the draft
Provisions on Prohibition of Abuse of
Dominant Market Position (the “Draft
Provisions”). The Draft Provisions,
together with the draft Anti-Price
Monopoly Provisions issued by the
National Development and Reform
Commission in August 2009 (the
“NDRC Draft Provisions”), when issued
in final form, will constitute a complete
set of implementing rules for Chapter III
of the Antimonopoly Law (“AML”).
The AML prohibits the following acts
conducted by an operator with dominant
position: (i) selling or purchasing
products at unfair prices; (ii) selling
products below cost without justifiable
reasons; (iii) refusal to trade without
justifiable reasons; (iv) restricting others
to exclusively trade with it or other
operators designated by it without
justifiable reasons; (v) tying products
or imposing other unreasonable
conditions without justifiable reasons;
and (iv) applying different treatments
in price or other conditions without
justifiable reasons. While the NDRC Draft
Provisions focus on regulating those acts
in connection with pricing under (i), (ii)
and (vi), the Draft Provisions focus on
acts of abuse by means of (iii) – (v) and
using different treatments unrelated to
pricing under (vi). These provisions set
forth useful protocols for an operator
that may be recognized as having a
dominant position.
Apart from the per se violations
under (i), all the other acts of abuse
of dominant position under the AML
are violations only if no justifiable
reasons can be substantiated. The
Draft Provisions provides that when
determining on whether there is a
justifiable reason, the following factors
should be considered: whether the
act has been conducted according
to commercial customary practices,
ordinary course of business and
ordinary interests; whether the act
exerts any adverse effects on market
competition and consumer interests;
and whether the act has any negative
impact on economic efficiency and
common interests. The Draft Provisions
are silent on whether the intent of an
operator with dominant position should
be taken into account. According to the
antitrust practices in the United States,
unlike the per se violations, intent and
motives are relevant when determining
the consequences of such conducts.
Thus, a specific intent to exclude or
restrict competition should also be
included in the “rule of reason” test.
Different from the business
concentration, the prohibition on abuse
of dominant position under the AML
has not been put into effect. Therefore,
the Draft Provisions and the NDRC
Draft Provisions should be promulgated
and implemented as soon as possible.
Written by
Jeanette Chan, partner
Sue Yang, associate
Paul, Weiss, Rifkind,
Wharton & Garrison
Hong Kong Club Building, 12th Floor3A
Chater Road, Central Hong Kong
Email: [email protected]
Ph: (8610) 5828-6300 or
(852) 2846-0300
Philippines
Philippines Adopts
New Corporate
Rehabilitation And
Insolvency Framework
On 2 February 2010, the Philippine
Congress adopted Republic Act No. 10142,
entitled the Financial Rehabilitation and
Asian Legal Business ISSUE 10.9