PCC finds ‘reasonable grounds’ to probe DITO’s complaints vs. Globe, Smart

The Philippine Competition Commission (PCC) on Friday announced it would start a preliminary inquiry into the anti-competitive complaints filed by DITO Telecommunity Corp. against Smart Communications Inc. and Globe Telecom Inc.

In a statement as regards DITO's complaints, the antitrust watchdog said it “found reasonable grounds to open a preliminary inquiry.”

Early this month, DITO filed complaints before the PCC, citing interconnection issues with Smart and Globe and accusing the two companies of abuse of dominance.

“The PCC Enforcement Office (CEO) will look into the allegations in the complaints for possible violations of Section 15 of the Philippine Competition Act (PCA) pertaining to abuse of dominance. The CEO will also study whether other violations of the PCA pertaining to anti-competitive agreements have been committed,” the anti-trust body said.

“As it proceeds with the investigation, the PCC will coordinate and consult with the National Telecommunications Commission and other relevant authorities for regulatory and technical considerations,” it added.

The PCC said it took complaints of anti-competitive behavior “very seriously.”

“Without prejudging the outcome of the CEO’s investigation, the PCC reminds players with substantial market power, not only in the telecommunications industry but across sectors, of their responsibility to compete fairly and to adhere to the principles of competition,” it said.

Globe and Smart have fired back against DITO accusing the new major telco of avoiding to payment of penalties which resulted from fraudulent calls or international simple resale (ISR) calls—identified as international in origin but masked as local calls—placed through DITO's network and bypassing proper voice traffic channels.

DITO has since denied that ISR calls are not made by the company but were fraudulent calls made by third parties.

Globe and Smart welcomed the inquiry by the PCC.  

“While we have yet to receive a copy of DITO’s complaint before the PCC, as a publicly-listed company, Globe maintains that a fair and healthy competitive environment is necessary to promote consumer welfare,” Globe said.

“Specifically, Globe welcomes the opportunity to present to the PCC how DITO violated the terms and conditions of its Interconnection Agreement with us which prompted the filing of a previous case with the NTC. Likewise, we reiterate our view that this is a clear case of forum shopping since a similar case for the same issues is pending with the NTC,” the Ayala-led telco said.

Smart, likewise, said it “welcomes the opportunity to reaffirm before the PCC its commitment to fostering healthy competition in the telecom sector, and affirms its willingness to assist and cooperate in the preliminary inquiry that the PCC’s Competition Enforcement Office has announced in relation to a reported DITO Telecommunity Corporation complaint.”

Smart, however, pointed out that “DITO must first address the serious and continuing deficiencies in its own network that have allowed criminals to abuse interconnection facilities by fraudulently masking international calls as domestic, thereby prejudicing Smart subscribers who are victimized by scams, and depriving the government of tax revenue, and Smart of toll income.”

“Smart is confident that the PCC will, in due course, clear it of any wrongdoing in respect of DITO's reported complaint,” the Pangilinan-led telco said.

In response to the PCC’s opening of a probe, DITO chief administrative officer Adel Tamano said the telco welcomed “the PCC finding reasonable grounds to move forward with DITO's complaint against Globe and Smart for their abuse of dominant position, which undermines competition.”

“From the onset this case has not been about mere commercial terms but rather is about public interest in interconnection between the telco players and fostering genuine competition in the industry,” Tamano said. —NB/LBG, GMA News