MANILA, Philippines — The Philippine Competition Commission (PCC) has filed a case against mass housing developer 8990 Holdings Inc. and Urban Deca Homes Manila Condominium Corp. for breach of antitrust law by engaging an exclusive internet service provider (ISP) for a property in Tondo, Manila.
In a statement of objections filed on March 27, the PCC’s enforcement office charged the firms for abuse of dominance by imposing a sole ISP on residents and tenants of Urban Deca Homes Manila.
Urban Deca Homes Manila, a low-cost condominium project, is part of the property portfolio of 8990 Holdings developed by Euson Realty and Development Corp., and Tondo Holdings Corp.
The exclusive deal between Urban Deca Homes Manila and Itech Rar Solutions Inc. as ISP for the property is the first abuse of market dominance case filed before the PCC.
The deal violates Section 15 of the Philippine Competition Act (PCA) which prohibits the abuse of dominant position.
“This is a fair warning to businesses that resort to exclusive partnerships to corner profit and hinder the entry of other competitors in exercise of its market power. This act of abuse of dominance limits the choices made available to residents and is a violation of the competition law,” PCC Enforcement Office director Orlando Polinar said.
Under the PCA, an entity found to have committed an abuse of dominance in the market could face a fine of up to P100 million.
PCC looked into the deal following numerous complaints from unit owners and tenants of Urban Deca Homes Manila who claimed to be prevented from applying for other ISPs even when the in-house Fiber to Deca Homes service was slow, expensive, and unreliable.
Based on the complaints of residents, Fiber to Deca Homes charges P1,249 for 2Mbps, an amount almost equivalent to a 5Mbps plan from other service providers.
While Fiber to Deca Homes charges P2,599 for its 5Mbps plan, the same plan costs only P1,299 from other networks.
In addition, Fiber to Deca Homes’ 6Mbps service which costs P2,949, is equivalent to 50Mbps from one ISP, and almost the same price for 100Mbps from another ISP.
Through its probe, the PCC learned the exclusive partnership with one ISP prevented the entry and access of other providers in Urban Deca Homes Manila.
It also found that Urban Deca Homes Manila’s property manager blocked other ISPs from offering their fixed-line internet services to residents.
“Through this case, the PCC Enforcement Office intends to stop the property manager and developer from limiting the market for fixed-line internet so third-party providers may enter such market under reasonable terms and offer choices to the residents,” Polinar said.
The PCC is mandated to promote competition in the market by prohibiting anti-competitive agreements, abuses of market dominance, and anti-competitive mergers and acquisitions.