December 12, 2017 | MANILA, PHILIPPINES

PCC brings fight vs telcos over P69-B deal review to SC

THE Philippine Competition Commission (PCC) has asked the Supreme Court to lift the injunction against its review of PLDT, Inc. and Globe Telecom Inc.’s P69.1-billion joint acquisition of San Miguel Corp.’s (SMC) telecommunications assets.

The PCC, represented by the Office of the Solicitor General (OSG), filed its petition with the High Court on Tuesday.

“Through this petition, we would like to send a strong message to consumers and business that the PCC -- as the country’s primary competition authority -- will not back down or be intimidated by companies who have grown accustomed to unregulated business practices that hamper competition and ultimately hurt the consumers,” PCC Chairman Arsenio M. Balisacan said in a briefing on Wednesday.

The former Socio Economic Planning Secretary said the PCC asked the High Court to “dissolve” the writ of preliminary injunction issued by the Court of Appeals 12th Division last August 2016, which stopped the PCC from reviewing the buyout deal.

“Second, we sought to stop PLDT from further proceeding with the final payment or performing any action for the consummation or implementation of the terms of the acquisition while the case is ongoing,” he said, adding the PCC has to fulfill its legal mandate in the interest of promoting competition in the telecommunications sector.

To recall, the CA 12th Division granted PLDT’s request for a preliminary injunction on the anti-trust body’s review of the telco giants’ purchase of SMC’s telecommunication assets, including the prized 700-megahertz (MHz) spectrum.

The dispute stemmed from the PLDT and Globe’s insistence that the buyout deal should be “deemed approved” upon submission of documents of the sale -- as provided by two transitory memorandum circulars the PCC issued in February shortly after it was established -- and the PCC’s argument that “the acquisition cannot be claimed to be ‘deemed approved’” since the telcos’ notice was “deficient and defective.”

“What we’re asking the Supreme Court is to allow us to review and in addition to that, issue order to PLDT to, in the meantime discontinue its consummation, including the payment of the last tranche... because it will be more difficult to undo it if the consummation is completed, [we’ll have] much more limited options and remedies later on and it will be more costly for the parties,” Mr. Balisacan said.

The PCC official also lamented the appellate court’s “disregard” of public interest involved in the review of the competition concerns arising from the telco deal.

“Any court acting by its best lights, would have easily determined from the outset that the public interest promoted by PCC’s review of the acquisition should never be subordinated to any supposed urgency and necessity to grant injunctive relief against speculative business losses and transient commercial inconveniences. Yet, the petition said, ‘[the CA], against all logic, cast its lot with the Goliaths of the telecommunications sector,’” the petition read.

PCC Commissioner Johannes Benjamin R. Bernabe told reporters the petition only refers to PLDT because the CA’s 6th Division had earlier denied Globe’s petition for a temporary restraining order (TRO) and preliminary injunction against the PCC review.

Although the CA approved Globe’s urgent motion to consolidate its petition with that of PLDT, Mr. Bernabe said “this does not mean the CA 6th Division’s decision to allow the PCC to review the transaction is invalid.”

“If we will include Globe in the petition, then that is somehow inconsistent -- for the lack of a better term -- with our position that the CA 6th Division’s decision is valid. The 12th has to take into account the ruling of the 6th,” the former senior partner at Ocampo & Manolo Law Offices added.

On Wednesday, telco stocks took a beating with PLDT losing P60 or 3.41% to end P1,700 apiece, and Globe giving up P50 or 2.45% to end P1,990 each.

Both PLDT and Globe deferred comment until they receive a copy of the PCC petition.

PCC Commissioner Stella Alabastro Quimbo noted during the same briefing that the “CA has not decided on the ‘deemed approved’ status of the deal yet.”

“For us, the most important aspect of this transaction is the co-use agreement between the two telcos. We asked for more info on the co-use agreement with respect to 700 MHz,” she said.

The business community is closely watching this case, as it sets the tone of future action by the watchdog on future mergers and acquisition deals.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls.