The Court of Appeals has sided with Watsons Personal Care Stores Inc. on the power of the Philippine Competition Commission (PCC) to issue a subpoena to a third party in a merger and acquisition.
The appellate court’s Seventh Division promulgated the 17-page ruling on February 13 as it annulled the subpoenas that the PCC issued to Watsons on May 22, 2023 and July 5, 2023 as part of its motu proprio review of the acquisition of Robinsons Retail Holdings Inc. of Rose Pharmacy Inc. from Mulgrave Corp.
The PCC, through its Mergers and Acquisitions Office (MAO), requested information from Watsons on the retail pharmaceutical industry.
In its letter dated March 10, 2023, Watsons declined MAO’s request on the basis that the former is not privy to the subject transaction.
In its ruling, the CA stressed that while the PCC has the authority to issue subpoena, this only covers merger parties or individuals that are directly and indirectly affiliated with them, and not third parties.
It added that it agreed with Watson’s arguments that the information required by the subpoenas does not appear to be relevant to the motu proprio review.
“The irrelevancy of the subpoena was further illustrated when the PCC actually terminated the motu proprio review on Oct. 5, 2023,” the CA decision penned by Associate Justice Edwin Sorongon.