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Question
A and B are two Philippine-registered manufacturers of digital thermometers used by clinics and hospitals. They sign a 2-year joint development agreement to create a higher-accuracy thermometer, with shared funding for R&D, joint quality testing, and a common labeling and packaging standard. The agreement also establishes a voluntary joint quality-audit board and provides that if either party fails to meet the agreed standards, the other may suspend or limit purchases from that party for non-conformity. The arrangement does not fix prices, allocate territories, or limit output; both maintain separate sales teams and continue to compete on price and service. The PCC is reviewing the arrangement for possible anticompetitive concerns. (a) Is this arrangement a per se violation, a not per se violation, or neither? (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.