DEMYSTIFYING DOMINANCE: ESTABLISHING LEGAL PARAMETERS FOR ABUSE OF DOMINANCE

Claudia Gabriella Squillantini (JD'15)

ABSTRACT

It is only natural to strive to be the biggest, the best and the brightest. Instinct drives man to do anything and everything in his power to achieve these goals, including eliminating rivals who stand in his way. The law, however, must step in to regulate human nature. No less than the highest law of the land proscribes anti-competitive behavior. The Revised Penal Code, the Civil Code and various other sectorial regulations seek the same end. Unfortunately, these provisions have failed to effectively deter anti-competitive behavior. The wealth of the country remains concentrated in the hands of a very select few. Moreover, Philippine markets remain extremely saturated. In fact the Philippines, has the least competitive market in ASEAN (second only to Myanmar), since it continues to be dominated by corporate giants. Given this bleak situation, there is a necessity to create a comprehensive competition law to foster competition on the market. There is not only a practical necessity for enacting a comprehensive competition law, but a legal one as well. The Philippines may be subjected to paying compensation, or worse, to a suspension of trade concessions if it is found that the Philippines has an obligation under international law to develop a competition law by 2015. To obviate the risk at the outset, it is advisable to enact a competition law. If there is indeed a duty to enact a competition law by 2015, there is a particular necessity to establish a proper framework for punishing abuse of dominance, one of the main kinds of anticompetitive behavior. As mentioned, the Philippine market is dominated by a few big players. Not all of their behavior, however, can be classified as abusive. Rather, certain acts that appear abusive of dominance may serve to promote competition, rather than inhibit it. Thus, in order to avoid producing a "chilling effect" on the very behavior competition law is intended to encourage, it is necessary to clearly and carefully define dominance and the acts constituting abuse thereof. Due to the prevalence of dominant firms in the Philippine market, and the importance of carefully regulating their conduct, this paper is concerned only with abuse of dominance. Currently, the Philippines has an existing legal framework and sector-specific regulations to punish anti-competitive behavior. Congress has proposed several House Bills and Senate Bills on competition law that are still pending. Still, the Philippine market continues to be ruled by large corporations. Existing laws have proven ineffectual at curbing anti-competitive practices, and the Bills have failed to materialize into an actual law. What is needed is a comprehensive competition law that will clearly and definitively demystify dominance.