Antitrust body issues guidelines on merger remedies
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Antitrust watchdog Philippine Competition Commission (PCC) said Thursday it has issued guidelines outlining its approach in assessing potential competition concerns arising from mergers and acquisitions.
In a statement, the PCC said it approved, on May 9, 2024, the Guidelines on Merger Remedies.
The guidelines contain the antitrust body’s approach on the design, selection, and implementation of “merger remedies.”
The PCC, under its merger and acquisition rules, allows transacting parties to offer remedies to address competition concerns, which they may propose anytime during the conduct of the merger review.
The antitrust body said it acknowledges that the recently issued guidelines are not a “one-size-fits-all” solution to all mergers and acquisitions transactions, as each transaction requires a tailored assessment.
However, the PCC said that the guidelines serve as a core set of principles informing the choice and design of merger remedies.
The antitrust body said parties must take note of the following in crafting their respective merger remedies:
- 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 with the harm being addressed.
The PCC said it may impose additional conditions as needed.
The antitrust watcher said the merger remedies guidelines outline two main types of merger remedies, namely 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 said it may also require ancillary measures to ensure proper implementation of the chosen remedies.
“The guidelines also address remedies for mergers and acquisitions in digital markets, including firewall and mandatory licensing provisions to address data access concerns,” it said.
“Additionally, the guidelines provide for ways by which the PCC can cooperate with competition and regulatory agencies abroad in case the merger and acquisition transaction is under review in at least one competition jurisdiction other than the Philippines,” it added.
The PCC is mandated by the Philippine Competition Act (PCA) to review mergers and acquisitions and prohibit transactions that will substantially lessen competition in the relevant market.
The law also allows the antitrust body to consider remedies proposed by merging parties to address any harm to competition that may arise from a proposed transaction.
The PCC said its merger review mandate is aimed at ensuring that competition remains in a market after a merger and acquisition transaction is consummated, thereby helping protect consumer welfare.
--VAL, GMA Integrated News