The Philippine Competition Commission (PCC) is in the process of developing guidelines to review mergers and acquisitions in digital markets, with the goal of promoting fair competition.
These guidelines are designed to provide transparency and legal clarity by identifying potential risks associated with digital mergers, which could prompt a review by the PCC, even in the absence of a formal complaint.
The PCC also encourages digital companies to engage with the commission during the merger process to facilitate a thorough assessment.
The draft guidelines outline nine indicators that would trigger a review initiated by the PCC. While the list is not exhaustive, the presence of the following multiple indicators would be considered a signal for further scrutiny:
- Transactions involving a gatekeeper: If a digital service provider acts as a bottleneck, limiting competition in the market, its acquisition of a smaller company could result in unfair advantages.
- Transactions involving companies handling large amounts of data: Merging data from different services can enhance targeted advertising capabilities and potentially compromise user privacy, giving the acquirer an edge over other advertising providers.
- Transactions that reinforce network effects: Acquiring competitors can significantly strengthen network effects, creating barriers for other platforms seeking to compete.
- Transactions involving innovative companies: Mergers involving innovative firms can have a significant impact on the market, potentially affecting strategies and reducing incentives for further innovation.
- Conglomerate transactions involving digital players: Conglomeration can impede the development, innovation, and market access of competitors, favoring the acquiring company.
- Multiple mergers and acquisitions within a year: Aggregating several small acquisitions may collectively impact competition, even if individual transactions fall below notification thresholds.
- Transactions involving parties under investigation: Companies already being investigated for anti-competitive conduct may face heightened scrutiny during the review process.
- Transactions near the notification threshold: Mergers or acquisitions that are close to the notification threshold, taking into account monetary and non-monetary benefits, may trigger a review.
- Transactions involving parties with significant market share: If the parties involved collectively hold a 30% or more share in relevant goods or services, the PCC may consider it a significant transaction warranting a review.
By establishing these guidelines, the PCC aims to effectively assess digital mergers and acquisitions, ensuring fair competition in the evolving digital landscape of the Philippines.
ns involving a gatekeeper: If a digital service provider acts as a bottleneck, limiting competition in the market, its acquisition of a smaller company could result in unfair advantages.
Transactions involving companies handling large amounts of data: Merging data from different services can enhance targeted advertising capabilities and potentially compromise user privacy, giving the acquirer an edge over other advertising providers.
Transactions that reinforce network effects: Acquiring competitors can significantly strengthen network effects, creating barriers for other platforms seeking to compete.
Transactions involving innovative companies: Mergers involving innovative firms can have a significant impact on the market, potentially affecting strategies and reducing incentives for further innovation.
Conglomerate transactions involving digital players: Conglomeration can impede the development, innovation, and market access of competitors, favoring the acquiring company.
Multiple mergers and acquisitions within a year: Aggregating several small acquisitions may collectively impact competition, even if individual transactions fall below notification thresholds.
Transactions involving parties under investigation: Companies already being investigated for anti-competitive conduct may face heightened scrutiny during the review process.
Transactions near the notification threshold: Mergers or acquisitions that are close to the notification threshold, taking into account monetary and non-monetary benefits, may trigger a review.
Transactions involving parties with significant market share: If the parties involved collectively hold a 30% or more share in relevant goods or services, the PCC may consider it a significant transaction warranting a review.
By establishing these guidelines, the PCC aims to effectively assess digital mergers and acquisitions, ensuring fair competition in the evolving digital landscape of the Philippines.
