The Anti-Trust Law

It is good and a welcome thing that President Aquino in his SONA message mentioned the need for an Anti-Trust Law. The Anti-Trust Law is also known in the United States as Competition Law. Its main objective or purpose is to prohibit agreements or practices that restrict free trading and competition between business entities. In particular, it calls for the repression of cartels. It also calls for the banning of abusive behavior by a company dominating a market leading to a dominant position. Transactions that are considered to threaten the competitive process are also prohibited.

The precursors of Anti-Trust Laws in the United States are the Sherman Anti-Trust Act of 1890 and the Clayton Anti-Trust Act of 1914. The Sherman Anti-Trust Act contains provisions in restraint of trade and considers the same illegal with penalty in case of violation. It prohibits under the meaning of restraint of trade, contracts, combination in the form of trust or otherwise, or conspiracy in restraint of trade or commerce among the several States or with foreign nations. It further provides that every person who shall monopolize or combine or conspire with any other person or persons to monopolize any part of the trade or commerce among the several States or with foreign nations will be held guilty of a felony and penalize. The same Act provides for the Jurisdiction of courts meaning the several district courts in the US invested with Jurisdiction to prevent restrain violations of the Anti-Trust Act. It also imposes as the duty of the US Attorney in the respective districts under the direction of the Attorney General to institute proceedings to prevent or restraint violations of the Anti-Trust Act.

The Clayton Anti-Trust Act of 1914 seeks to add substance to existing Anti-Trust Laws by preventing Anti-Competitive practices in there incipiency. Considers as unlawful for any person engaged in commerce, directly or indirectly, to discriminate in price between different purchasers of commodities where such commodities are sold for use or consumption within the United States when the effect of such discrimination maybe to lessen competition or tend to create a monopoly. The Act also provides as unlawful any person engaged in commerce knowingly to induce or receive a discrimination in price, discrimination in rebates, discounts, or advertising charges or underselling in particular localities.

So in the Philippines, the absence of Anti-Trust Law finds many companies engaged in the practice of restricting free trading and behavior dominating a particular market. It is evident and obvious which companies in the country are guilty of such acts or behavior. The reason given for failure of the law making body to enact Anti-Trust Laws similar to those in the US, is that the Philippines is relatively a small country with no inter-State commerce by and between States like the US. But now with about a hundred million population, many of them consumers, it is about time to address concerns about existing big companies monopolizing the market and conspiring with other companies thereby restricting free trade.

But Senate President Juan Ponce Enrile filed Senate Bill No. 3197 known as the Competition Act of 2009. The bill will define and prohibits business cartels, monopolies or abuse of market power through price fixing and price discrimination, bid rigging limitations and control of markets, agreements to limit or control markets and tie-in arrangements. It is provided in the bill that penalties will be imposed against traders who will engage in unethical business practices. Further the bill will authorize the Department of Justice to be the chief enforcer of the measure.

It is hoped that this bill will be acted upon by the present Congress. After all, there is the call of the President to enact such a law.