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CA upholds legality of PLDT-Globe-SMC deal

  • Written by Hector Lawas
  • Published in Nation
  • Read: 129

THE Court of Appeals (CA) upheld the legality of the joint purchase by the Philippine Long Distance
Telephone Company (PLDT) and Globe Telecommunications of the telecommunication assets of food and
beverage giant San Miguel Corporation (SMC).

The CA ruled that the Philippine Competition Commission (PCC) gravely abused its discretion
when it ordered a full review of the acquisition deal worth almost P70 billion, despite PLDT and
Globe’s compliance to its Memorandum Circular 16-002.
    
The CA issued a writ of mandamus compelling the PCC “to recognize the subject acquisition as
deemed approved by operation of law.”
    
Memorandum Circular 16-002 requires parties to a merger acquisition to merely notify the
Commission through a letter containing certain information.
    
The CA stressed that it was convinced that the notice sufficiently contains the “Key Terms of
the Transaction” and substantially complied with the requirements of MC No. 16-002.
    
“With the subject notice being compliant with the requirements of MC 16-02 and there being no
false material statement therein, the subject acquisition is deemed approved by operation of law and
may no longer be challenged under the PCA (The Philippine Competition Act),” the CA said.
    
“It follows that PCC is duty-bound to recognize that status and give effect thereto. The
petition for mandamus is therefore, meritorious,” it added.
    
However, the CA pointed out that  the approval of the deal does not remove the power of PCC to
conduct a post-acquisition review to ensure that PLDT and Globe would not engage in any anti-
competitive conduct.
    
“If the parties misuse the subject acquisition to engage in anti-competitive behavior, then PCC
may very well exercise its powers to prevent and punish anti-competitive behavior under R.A. 10067 or
the Philippine Competition Act,” the CA stressed.