The rules on the Determination of Dominance 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:
EXISTENCE OF DOMINANCE
Dominance can exist on the part of one entity (single dominance) or of two or more entities (collective dominance).
ASSESSMENT OF DOMINANCE
In determining whether an entity has a market dominant position for purposes of R.A. 10667 and its IRR, the Philippine Competition Commission (“Commission”) shall consider the following illustrative and non-exhaustive criteria, as may be appropriate:
- (a) The share of the entity in the relevant market and the ability of the entity to fix prices unilaterally or to restrict supply in the relevant market;
- (b) The share of other market participants in the relevant market;
- (c) The existence of barriers to entry and the elements which could foreseeably alter both the said barriers and the supply from competitors;
- (d) The existence and power of its competitors;
- (e) The credible threat of future expansion by its actual competitors or entry by potential competitors (expansion and entry);
- (f) Market exit of actual competitors;
- (g) The bargaining strength of its customers (countervailing power);
- (h) The possibility of access by its competitors or other entities to its sources of inputs;
- (i) The power of its customers to switch to other goods or services;
- (j) Its recent conduct;
- (k) Its ownership, possession or control of infrastructure which are not easily duplicated;
- (l) Its technological advantages or superiority, compared to other competitors;
- (m) Its easy or privileged access to capital markets or financial resources;
- (n) Its economies of scale and of scope;
- (o) Its vertical integration; and
- (p) The existence of a highly developed distribution and sales network.
PRESUMPTION OF DOMINANCE
There shall be a rebuttable presumption of market dominant position if the market share of an entity in the relevant market is at least fifty percent (50%), unless a new market share threshold is determined by the Commission for that particular sector.
THRESHOLDS FOR DOMINANCE
The Commission shall, from time to time, determine and publish the threshold for dominant position or the minimum level of share in the relevant market that could give rise to a presumption of dominant position. In such a determination, the Commission would consider:
- (a) The structure of the relevant market;
- (b) The degree of integration;
- (c) Access to end-users;
- (d) Technology and financial resources; and
- (e) Other factors affecting the control of a market, as provided in the provision on Assessment of Dominance (above).
EXCEPTIONS
The Commission shall not consider the acquisition, maintenance and increase of market share through legitimate means that does not substantially prevent, restrict, or lessen competition in the market, such as but not limited to, having superior skills, rendering superior service, producing or distributing quality products, having business acumen, and enjoying the use of protected intellectual property rights as violative of the Act and these Rules. Provided, that the concerned entity or entities invoking the exception shall clearly establish to the Commission’s satisfaction, that the barrier to entry or anti-competitive act is an indispensable and natural result of the superior product or process, business acumen, or legal rights or laws.
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