The rules on the determination of control are provided in Republic Act No. 10667, also known as the “Philippine Competition Act“, and its Implementing Rules and Regulations (IRR). These rules are as follows:
Control refers to the ability to substantially influence or direct the actions or decisions of an entity, whether by contract, agency or otherwise. In determining the control of an entity, the Philippine Competition Commission may consider the following:
(a) Control is presumed to exist when the parent owns directly or indirectly, through subsidiaries, more than one half (1/2) of the voting power of an entity, unless in exceptional circumstances, it can clearly be demonstrated that such ownership does not constitute control.
(b) Control also exists even when an entity owns one half (1/2) or less of the voting power of another entity when:
- (1) There is power over more than one half (1/2) of the voting rights by virtue of an agreement with investors;
- (2) There is power to direct or govern the financial and operating policies of the entity under a statute or agreement;
- (3) There is power to appoint or remove the majority of the members of the board of directors or equivalent governing body;
- (4) There is power to cast the majority votes at meetings of the board of directors or equivalent governing body;
- (5) There exists ownership over or the right to use all or a significant part of the assets of the entity; or
- (6) There exist rights or contracts which confer decisive influence on the decisions of the entity.
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