2024 Commercial Law, Q3

Ernest Bicycle Corporation (EBC) and Max Speed Corporation (MSC) are the leading manufacturers and sellers of electric bicycles in the country. EBC and MSC offer their bestselling models at PHP 25,000.00 per unit. In 2023, Gryffin Pedals, Inc. (GPI) entered the market and sold electric bicycles with features similar to EBC and MSC’s bestselling models for only PHP 20,000.00. GPI has no physical stores and offers its products in digital marketplaces. After a year, GPI had 75% share of the market leaving EBC and MSC at 15% and 10% shares, respectively. EBC and MSC filed a complaint before the Philippine Competition Commission and alleged that GPI is fast monopolizing the electric bicycles market because of its dominant position. Will the complaint against GPI for violation of the competition laws prosper? Explain.

Quick check

Is maintaining a 75% market share prohibited per se under the Philippine Competition Act (R.A. No. 10667)?

How may a commercial enterprise lawfully acquire a dominant position in a relevant market?

What anti-competitive practice occurs when a dominant firm sets prices below cost to drive competitors out of business?

Which administrative agency is primarily tasked with enforcing the Philippine Competition Act?

Which of the following activities constitutes an abusive exercise of a dominant market position?

Learn more about these topics

1. Dominant Position Rules
Under Section 15 of the Philippine Competition Act (R.A. No. 10667), possessing or acquiring a dominant market position is not illegal per se. Competition law encourages market participants to compete vigorously through innovation, operational efficiency, and lower prices. Achieving a commanding market share, even up to a near-monopoly level, is protected when attained through legitimate business acumen or superior consumer offerings. The law does not penalize commercial success itself, but rather targets deceptive or restrictive practices designed to suppress market competition.

2. Abuse of Dominance
While market dominance is lawful, the abuse of a dominant position is strictly prohibited under the Philippine Competition Act. Abuse occurs when an entity holding dominant market power engages in conduct that substantially prevents, restricts, or lessens competition. Examples of abusive practices include predatory pricing, imposing unfair purchase or selling prices, limiting production or technical development to the prejudice of consumers, and creating artificial barriers to entry. To establish a violation, complainants must prove both dominance and abusive anti-competitive conduct.

3. Prohibited Competition Practices
The Philippine Competition Act classifies anti-competitive conduct into three major categories: anti-competitive agreements, abuse of dominant position, and anti-competitive mergers and acquisitions. Horizontal agreements like price-fixing, bid-rigging, and market allocation among direct competitors are illegal per se. In contrast, unilateral conduct by a dominant firm is evaluated under a rule of reason framework to determine whether the practice produces genuine pro-competitive efficiencies or acts as an illegitimate restraint on trade.

About these questions and answers
The questions reproduced here are the official texts of the Philippine Bar Examinations, published by the Supreme Court. They are reproduced for study purposes.The suggested answers are the author’s own.

They are not official answers, have no connection with the Supreme Court, the Office of the Bar Confidant, or any bar review institution, and are not endorsed by any of them. Official answer keys, where released, should be preferred over anything here.Nothing on this page is legal advice, and reading it creates no lawyer-client relationship. Do not rely on any suggested answer in an actual legal matter. Consult counsel on your own facts.Suggested answers reflect the law and jurisprudence the author considers applicable as of the date shown.

Where a question comes from an earlier examination, the suggested answer applies the law as it now stands, which may differ from the law in force when the question was given, and may therefore differ from what would have been the correct answer at that time. Where the difference is material, the answer notes it.The practice scoring feature measures wording overlap with the suggested answer. It is not a grade, carries no official weight, and says nothing about whether your reasoning is sound.Errors are possible. If you find one, please tell me and I will correct it.Last reviewed: October 2026