PCC accepts P1.5 million settlement offer from PALSCON

CEBU, Philippines — The Philippine Competition Commission (PCC) has approved a P1.5 million settlement proposal from the Philippine Association of Legitimate Service Contractors (PALSCON) to resolve concerns regarding possible anti-competitive agreements within the organization.

Following an investigation on the association by the PCC Enforcement Office for suspected violations of Section 14 (b)(2) of the Philippine Competition Act (PCA), PALSCON opted to submit an undertaking to the Commission to correct its behavior.

The PCA prohibits agreements among competitors that aim to limit competition, such as dividing the market based on sales, territory, product or service type, or other factors. PALSCON's Code of Ethics contained provisions which had the effect of limiting the competition among its members.

In 2021, during the PCC Enforcement Office’s full administrative investigation, PALSCON requested to engage in settlement discussions pursuant to Section 2.17 of the PCC Rules of Procedure. The Rules allow entities under investigation to offer a settlement to the Commission at any time during the investigation, but before the final decision is made.

After a series of negotiations, PALSCON submitted a Complete Revised Settlement Proposal on July 14, 2023, which the Commission approved on October 5, 2023.

To address PCC’s concerns, PALSCON has committed the following undertakings;  Payment of settlement amount totaling to P1,547,079.60; Attendance of the PALSCON board of directors and at least two senior officers of each PALSCON member to a competition law seminar to be organized by PCC; Appointment of a competition law compliance officer who will ensure compliance of PALSCON members with the PCA, PCC issuances, as well as attendance to competition law seminars by identified PALSCON officers; Issuance by PALSCON of acknowledgment recognizing their association’s inadvertent mistake or failure to properly communicate to its members the meaning of Article II, Section 3 of PALSCON’s Code of Ethics, which shall be published on PALSCON’s website for two (2) years; and Revision of PALSCON’s Code of Ethics, particularly, Article II, Section 3, to state that “PALSCON shall not support, tolerate, or condone anti-competitive practices between and among its members, as well as agreements, conduct, policies or regulations which are anti-competitive in nature.”

“This settlement marks a crucial step towards fostering a more competitive and transparent environment within the industry," said Armando L. Gutierrez Jr., PALSCON national president.

“We hope it will encourage businesses to adopt fair practices and share their expertise for the benefit of all,” Gutierrez added.

According to PCC chairperson Michael G. Aguinaldo by addressing unfair practices, “this settlement forms part of the Commission’s holistic approach towards building a culture of competition in the country.”

“We hope that eventually, associations and business groups become more wary of how their guiding principles create advantages or disadvantages that affect the level playing field,” Aguinaldo added.

The Commission encourages voluntary compliance with the PCA and other competition laws by making available to the parties non-adversarial remedies provided under Section 37 of the PCA.