Globe Telecom has issued a statement saying it did not enter into any prohibited act as defined under the Philippine Competition Commission’s rules and guidelines regarding its acquisition of the 50% of San Miguel Corp.’s telecommunications business.
The statement was issued in response to PCC’s earlier announcement that Globe and PLDT may have violated the Philippine Competition Act.
“The mere filing of a notification with the PCC does not guarantee a “deemed approved” status for the subject transaction, even under the transitory rules. Parties to a proposed merger and acquisition cannot make the determination of whether a transaction is deemed approved; this is for the PCC to determine,” stated the PCC.
PCC specified that it has been erroneously claimed that transactions entered into and reported to the PCC prior to the publication of the Implementing Rules and Regulations (IRR) of the Philippine Competition Act (PCA) fall outside of PCC’s authority to review because these are “deemed approved” under the applicable Memorandum Circulars.
“This is not accurate. The PCC reviews all submissions for sufficiency and completeness of information, and decides, after due consideration, if the subject transaction will be deemed approved. If a submission is determined to be insufficient or defective in form and/or substance, for example, the PCC may reject such a submission. Omission of key terms of the transaction and submission of false material information may also be grounds for rejection. Certain submissions may likewise raise serious concerns regarding potential violations of the PCA.
“The PCC conducts full and expeditious review of a notification of transaction only after receipt of complete information. Under the law, the purpose of such a review is to prevent anticompetitive mergers and acquisitions. In its review, the PCC exercises all powers granted by the law.”
Only a notice required
Responding to PCC’s statement, Globe says it filed the notice of its purchase of 50% of SMC telco businesses in accordance with the Commission’s own rules, particularly PCC Memorandum Circular 16-002 which requires only a notice of the transaction and such transaction shall be ‘deemed approved’ and may no longer be challenged under Section 23.
“It is unfortunate that the PCC is reacting to news stories that are written not necessarily in the context of the parties’ submission. We have in fact given the PCC additional documents for their own reference and information,” said Globe General Counsel Atty. Froilan Castelo. “The submission of the notice under MC 16-002 underscores the authority of the PCC covering the amount of the transaction.”
Globe reiterates that the parties and their respective advisers reviewed the transaction to ensure compliance with all relevant laws, including the provisions of the Philippine Competition Act.
“The company did not enter into any prohibited act as defined under the PCC rules and guidelines. In addition, recognizing the importance of open market competition, the transaction did not result in any market share gain or loss for any of the three parties involved because the companies purchased were non-operating.
“Having access to the 700 MHz now instead of allowing the resource to remain idle, and using it in various areas in the metropolis, we are seeing the benefits immediately in terms of faster mobile internet speeds and better quality of service to our customers. As we roll out more sites using the 700 MHz we can accelerate the benefits brought about by additional capacity in serving our mobile data customers.”