3. Determining the Relevant Market

Determining the Relevant Market under the Philippine Competition Act

Under Republic Act No. 10667, the Philippine Competition Commission must define the relevant market allegedly affected when determining whether an anti-competitive agreement or conduct has been committed¹. For this purpose, the Commission evaluates factors affecting the substitutability of goods or services forming the market and the geographic area delineating its boundaries². It must also ascertain whether the alleged agreement or conduct causes an actual or potential substantial adverse impact on competition in that relevant market that outweighs efficiency gains¹. In addition, the Commission may establish criteria based on increased market share in the relevant market exceeding minimum thresholds for compulsory merger and acquisition notification³.

In determining the relevant market, the following factors, among others, must be considered:

• Possibilities of Substitution: The feasibility of substituting the goods or services with others of domestic or foreign origin, considering technological possibilities, the availability of substitutes to consumers, and the time required for substitution².
• Distribution Costs and Supply Time: The cost of distributing the good or service, its raw materials, supplements, and substitutes from other areas and abroad (taking into account freight, insurance, import duties, and non-tariff restrictions), restrictions imposed by economic agents or associations, and the time required to supply the market from those areas².
• Consumer Mobility: The cost and probability of users or consumers seeking other markets².
• Access Restrictions: National, local, or international restrictions limiting access by users or consumers to alternate sources of supply, or the access of suppliers to alternate consumers².