Competition watchdog still studying landmark TV5, ABS-CBN deal
MANILA, Philippines — The Philippine Competition Commission is fast-tracking its economic analysis to see how a landmark deal between TV5 and ABS-CBN will affect market, the panel told members of the House of Representatives on Wednesday.
The commission was hesitant to say that the landmark deal between the two media companies is a competition issue.
"The basis for conducting a motu-propio review will have to also include an initial assessment of whether the transaction is likely to cause a lessening of competition based on a very cursory examination of the facts," officer-in-charge Johannes Bernabe told the House committees on Legislative Franchises and Trade and Industry.
Under the landmark deal, which the two companies said it will put on hold to answer questions raised about it, ABS-CBN Corp. will acquire 34.99% of capital and voting stock, giving it a minority share in TV5.
"It is not a merger from our perspective but it is an acquisition because there is a purchase of shares. Whether or not it breaches the 35-percent threshold, it is an acquisition of shares," Bernabe said, referring to the threshold for mergers and acquisitions that the PCC must be notified of.
The PCC may still review deals and companies with deals below the threshold may still voluntarily notify the competition watchdog.
The Securities and Exchange Commission said at the same hearing that ABS-CBN only partly complied with its directives when it sent just an executive summary of the agreement and not the full agreement itself, adding that ABS-CBN only submitted the investment agreement after it was sent a show-cause order.
The SEC also said it had to send another letter reiterating its directive thereafter, saying the initial submission was "not a full, fair, and accurate disclosure of material facts," while a more full assessment is still needed to see if the agreement is exempt from the need for registration before the body.
The hearing was called at the urging of some members of the House, including Rep. Rodante Marcoleta (SAGIP party-list), one of ABS-CBN's chief accusers in franchise hearings in 2020. At the hearing on Wednesday, he brought up previous issued hurled against the broadcaster.
Marcoleta argued that joint venture still constitutes influence and control within the company as he urged the PCC. He said that the deal gives ABS-CBN "another vehicle to produce material" for television when, he said erroneously, that the company "lost its franchise to produce content" in 2020.
The frachise that the House panel denied ABS-CBN was for the use of frequencies owned by the government.
Lawmaker: House probe can lead to 'derogation' of press freedom, free speech
In a letter addressed to House Speaker Martin Romualdez earlier that day, Rep. Edcel Lagman (Albay 1st District) slammed the ongoing probe for what he said was its effects on free speech and the freedom of the press.
"There is no franchise issue...there is no sale, lease, transfer, or grant of the usufruct or assignment of TV5's franchise to ABS-CBN. Moreover, there is no merger or transfer of controlling interest in TV5," he writes.
"There is absolutely nothing wrong with that arrangement. What is definitely errant is when authorities trample on the freedom of expression and of the press."
Lagman went on to argue that the deal actually enhances fair competition in the television and broadcast industries in the country.
"Without a franchise, ABS-CBN ceased to be a major player in the industry. TV5 has not achieved major player status. One television network presently dominates the industry," he said.
"With the recent infusion of ABS-CBN investment in TV5, the playing field approximates leveling." — Franco Luna
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