Condos, subdivisions warned against exclusive ISP deals

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Makati City representative Luis Campos Jr. has warned condominium and subdivision developers against forming exclusive deals with a sole Internet service provider (ISP), saying they risk getting slapped administrative fines of up to P100 million.

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“The law is very clear. These exclusionary arrangements with an in-house ISP are prohibited. They are unlawful barriers to the entry of competitors, or other ISPs,” Campos said in a statement on Sunday, Feb. 20.

“We would urge residents or tenants adversely affected by their property developer’s exclusive contract with a single ISP to file complaints with the Enforcement Office of the Philippine Competition Commission (PCC),” Campos said.

The PCC earlier said it is finalizing a memorandum circular seeking to prohibit property developers from imposing exclusive deals with just one broadband or ISP for tenants of condominiums and residents of subdivisions.

Campos said the exclusive transactions “also constitute unfair business practices that deprive consumers of the freedom to choose their preferred ISP.”

“In fact, one could make the argument that in forcing the residents or tenants to subscribe to a lone pre-determined ISP, there is price-fixing, because the consumer is in effect being barred from obtaining a similar service at another price,” Campos pointed out.

“We must remind all entities, including property developers, that they are forbidden from engaging in any conduct that would prevent, restrict or lessen competition,” Campos said.

Under the Philippine Competition Law, Campos said entities that take advantage of their dominant position to obstruct competition could face a fine of up to P100 million, depending on the gravity and duration of the offense.

In 2019, a mass housing developer was forced to settle an “abuse of dominance” violation with the PCC.

The developer acknowledged its misconduct in imposing a single ISP for nine of its projects across the country and was compelled to pay a fine of P27.11 million.

Last year, the PCC’s Enforcement Office also filed a separate case against a condominium developer for a similar offense.