Justice department issues rules on criminal prosecutions for Competition Act violators

THE Department of Justice (DoJ) issued a circular approving the rules implementing the criminal provisions of Republic Act No. 10667 or the Philippine Competition Act (PCA).

According to Department Circular No. 016, the DoJ’s Office for Competition (OFC) will conduct preliminary investigations and prosecute criminal offenses identified in the competition law.

Covered offenses include entering into anti-competitive agreements which restrict competition as to price or other forms of trade among others, and agreements fixing prices at an auction or in any form of bidding including cover bidding, bid suppression, bid rotation, and market allocation and other forms of manipulation.

Offenses also include entering agreements that set, limit or control production, markets, technical development or investment, and those that divide or share the market, “whether by volume of sales or purchases, territory type of goods or services, buyers or seller or any other means.”

“A criminal action based on covered offenses under Sections 1 and 2 of Rule II shall forever be barred, unless commenced within five (5) years from the time the violation is discovered by the offended party, the authorities or agents,” according to the circular.

Under PCA Section 30, entities are subject to fines while responsible officers and directors are subject to imprisonment.

An entity charged in a criminal proceeding may enter a plea of Nolo Contendere, signifying neither acceptance nor denial of responsibility for the charges, though it accepts the punishment “as if a plea of guilt has been entered.”

“The plea cannot be used against such an entity in a suit for civil liability arising from the criminal action or in another cause of action: Provided that a plea of Nolo Contendere may be entered only up to arraignment and subsequently, only with the permission of the court.”

The OFC may also grant immunity from prosecution from covered offenses and recognize immunity granted by the Philippine Competition Commission.

Qualified for immunity under the leniency program are respondents in a complaint over anti-competitive agreements in exchange for voluntary disclosure of information regarding the agreement.

The circular takes effect in 15 days days after publication in a newspaper. —