The Philippine Competition Commission (PCC) has hit a stumbling block in its attempt to stop the country’s two dominant operators’ PHP69 billion ($1.5 billion) deal to acquire San Miguel Corp’s (SMC) telecoms assets.
This week PCC issued a statement warning that the deal is “likely” to negatively impact competition. A day after this “preliminary statement of concerns” was posted on PCC’s website, an appeal court granted PLDT’s request to temporarily halt a review of the joint acquisition by the antitrust agency.
In its statement of concerns PCC outlined seven potential issues and noted that more may be added as its investigation progresses, BusinessWorld reported. It pointed to the aborted partnership of SMC and Australia’s Telstra as well as the loss of potential competition from Vega Telecom, a subsidiary of SMC that was sold off.
“The joint acquisition is likely to further entrench the dominant position of PLDT and Globe Telecom, in markets where outcomes have not traditionally served consumers well,” the statement said.
The appeals court decision, which calls for PCC to stop conducting further proceedings for the pre-acquisition investigation, is however a major setback for PCC in its attempt to encourage more competition in the country’s mobile space.
The court said: ‘We agree with PLDT that, due to the ‘deemed approved’ status extended to the acquisition by virtue of the transitory rules, at the very least, PLDT has a clear right to be protected from the pre-acquisition review and/or investigation conducted by PCC.”
PCC said it is considering appealing the decision.
Both PLDT and Globe filed for temporary restraining orders in July, asking for a halt of the review, with both arguing the “transaction is already deemed approved”. The actions followed the PCC declaring in June it was conducting a “comprehensive review” of the acquisition, struck in May, after asking operators to resubmit filings, with the agency indicating that the companies may have failed to comply with guidelines of the competition act and the filings were “deficient and defective”.