Flashcards Studio

Two Philippine-registered manufacturers of diagnostic medical device components, MedCore Philippines and BioSpec Ltd., sign a 3-year joint program to align safety-testing and quality-control standards for their product lines. They jointly fund periodic supplier audits, appoint a joint standards council, and include a clause that if either party’s suppliers fail to meet the agreed standards, the other party may require its own customers to source from the conforming party’s suppliers or suspend accepting orders from the non-conforming supplier for a period. Each company maintains its own brands and distribution networks and continues to compete on price and service. The arrangement contains no price-fixing, no market allocation, and no output restrictions. The Philippine Competition Commission (PCC) reviews the arrangement for possible anti-competitive concerns.
(a) Is this arrangement a per se violation, a not per se violation, or neither under RA 10667, Sec. 14?
(b) State the controlling rule and the test that should be applied.
(c) Apply the rule to the facts: identify potential anti-competitive effects and any pro-competitive justifications, and conclude whether the arrangement is likely to be sustained under RA 10667.