THE Philippine Competition Commission (PCC) recently filed a case against a property company for “abuse of dominance” over its exclusive deal with an internet service provider (ISP) covering a low-cost residential condominium project in Manila.
Citing a Statement of Objections filed on March 27, the PCC Enforcement Office charged 8990 Holdings, Inc. and its unit Urban Deca Homes Manila Condominium Corp. “for abuse of dominance by imposing a sole ISP on its residents and tenants, preventing them from availing alternative fixed-line ISPs.”
“The exclusive deal between Urban Deca Homes Manila and Itech Rar Solutions, Inc. as ISP marks the first abuse of market dominance case filed before the PCC in violation of Section 15 of the Philippine Competition Act which prohibits abuses of dominant position,” the antitrust body said.
A low-cost condominium, Urban Deca Homes Manila is developed by Euson Realty and Development Corp. and Tondo Holdings Corp, which are subsidiaries of 8990 Housing Development Corp., which, in turn, is owned by 8990 Holdings. The project has 13 mid-rise buildings with a total of 13,212 condominium units for the affordable market.
“This is a fair warning to businesses that resort to exclusive partnerships to corner profit and hinder the entry of other competitors in exercise of its market power. This act of abuse of dominance limits the choices made available to residents and is a violation of the competition law,” Enforcement Office Director Orlando P. Polinar was quoted in the statement as saying.
BusinessWorld sought comment from 8990 Holdings, but has yet to receive a reply as of press time.
The PCC said the investigation was triggered by several complaints filed by unit owners and tenants, who claimed that they were prevented from getting other ISPs when the “Fiber to Deca Homes” service was “slow, expensive and unreliable.”
In its probe, the Enforcement Office found that the company’s exclusive partnership with Itech Rar Solutions had prevented other ISPs from installing fixed-line internet at Urban Deca Homes Manila units. Other ISPs were also blocked from marketing their services to residents.
The PCC said residents complained that the “Fiber to Deca Homes” service costs P1,249 for a speed of 2 megabytes per second (Mbps), which is the same price as a 5Mbps plan under other ISPs. Also, the 5Mbps monthly plan costs P2,599 for Urban Deca Manila Homes residents, while a similar plan costs P1,299 under other providers. The 6Mbps service costs P2,949 which is equivalent to 50Mbps from one ISP; while its 100Mbps is almost of the same price as another ISP.
“Through this case, the PCC Enforcement Office intends to stop the property manager and developer from limiting the market for fixed-line internet so third-party providers may enter such market under reasonable terms and offer choices to the residents,” Mr. Polinar said.
An entity found to have abused its dominance in the market could face a fine of up to P100 million. — Janina C. Lim