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Rule on Administrative Search and Inspection under the Philippine Competition Act

The “Rule on Administrative Search and Inspection under the Philippine Competition Act” (A.M. No. 19-08-06-SC) has been approved by the Supreme Court on Sept. 10, 2019.

Taking effect on Nov. 16, 2019 following its publication, this Rule sets out the procedures for obtaining and enforcing an inspection order.

An inspection order authorizes the Philippine Competition Commission (PCC) -- and any law enforcement agency deputized by the PCC to assist in the execution of the order -- to search and inspect business premises and other offices, land, and vehicles, for information to be examined, copied, photographed, recorded, or printed, in order to prevent the removal, concealment, tampering with, or destruction of such information.

This information shall include books, tax records, documents, photographs, databases, electronically stored information, etc., which relate to any matter relevant to the administrative investigation covered by this Rule.

Below is a summary:

• Application for Inspection Order

o How: Verified application

o By whom: PCC, through its authorized officer

o Where:

 Special Commercial Courts in QC, Manila, Makati, Pasig, Cebu, Iloilo, Davao, and Cagayan de Oro shall have authority to issue inspection orders enforceable nationwide. Special Commercial Courts in the judicial regions where the place to be inspected is located shall have concurrent jurisdiction to issue inspection orders enforceable within their respective territorial jurisdictions.

• Hearing on Application

o Within 24 hours from filing, the application shall be acted upon by the judge. Hearing shall be ex parte and held in the chambers of the judge.

• Effectivity of Inspection Order

o Length of time shall be determined by the court, not exceeding 14 days from issuance, and extendible for not more than 14 days.

• Service and Inspection

o The order shall be served in the presence of a duly designated officer of the court. Inspection shall be in the premises of a person designated by the entity, either a compliance officer or a legal counsel, who shall be given the opportunity to read the order before enforcement.

o The entity’s unreasonable delay, failure, or refusal to designate a representative shall not prevent the PCC from implementing the order.

o If refused admittance to the premises after giving notice of purpose and authority, or if unlawfully detained therein, the PCC officers, deputies, and agents may use reasonable force to gain entry and enforce the inspection order or to liberate themselves or any person lawfully aiding them.

• Return

o The authorized officer of the PCC shall make a verified return to the court within 3 days from enforcement of the order or after expiration of the period provided in the order, whichever comes first.

• Motion to Quash the Inspection Order

o Before a return is filed, the entity whose premises were inspected may file a written motion with the issuing court to quash the inspection order on the ground that it was improperly issued or implemented.

• Violation

o A person or entity who fails or refuses to comply with an inspection order or any provision of this Rule shall be cited for contempt of court (governed by Rule 71 of the Rules of Civil Procedure.)

The availment of an inspection order shall not prevent the PCC from exercising its powers under existing laws, including applying for search warrants under relevant rules.

The information collected pursuant to the inspection order shall be used only in administrative proceedings for violations under the Philippine Competition Act and other competition laws.