The Philippine Competition Commission (PCC) has fined the Boracay Business Administration of Scuba Shops (BBASS) and 39 of its member-dive shops a total of P2.17 million for engaging in price fixing on Boracay Island, Malay, Aklan. The anti-competitive behavior was found to be a violation of Section 14(a)(1) of the Philippine Competition Act.
In its Decision, the Commission also directed BBASS and its member-dive shops to cease-and-desist from enforcing the multi-year price fixing agreement that harmed local tourism.
The PCC found that BBASS, a non-stock domestic corporation established to regulate and protect the local diving industry, acted as the central facilitator of the price fixing agreement. The association and its members utilized the 2016 BBASS Rules and Regulations, alongside formal pricing agreements enacted in 2018 and 2019, to eliminate market competition among themselves. These pricing mechanisms imposed minimum floor prices on popular services, such as P3,000 for discover scuba diving and up to P25,000 for open water diver courses. The group banned shops from offering customer freebies like extra dives, masks, t-shirts, meals, or photographs, while capping commissions for tour guides, hotels, and booking agents at 10 percent. Member-dive shops of BBASS may be subjected to fines as well as closure of business when found to have violated these agreements.
BBASS and its member-dive shops argued that the fixed rates protected consumer safety, stabilized local livelihoods, and operated with the knowledge of the local government unit (LGU). The PCC disagreed with these defenses, ruling that price fixing is an outright violation of the law that cannot be justified by economic efficiency or industry protection.
The PCC emphasized that while trade associations are for the promotion of safety standards, they cannot act as vehicles for price fixing agreement. Furthermore, administrative local ordinances requiring an association endorsement to operate do not give private groups the legal authority to dictate commercial market prices, nor can the later tariff ordinances retroactively excuse past illegal conduct.
The PCC determined the fines considering that BBASS and its member-dive shops were micro, small, and medium enterprises. The final ruling orders the association and its 39 member-dive shops a combined total of P2.17 million for their respective roles in coordinating and enforcing the anti-competitive arrangement.
In the Decision, the PCC urges all LGUs to align their local ordinances with the National Competition Policy to keep the country’s tourism gateways open to fair and free competition.
Through enforcement actions like the Boracay decision, the PCC continues to monitor the economy and dismantle price fixing agreements that harm consumers. By breaking up these cartels, the Commission shields key industries from anti-competitive practices, prevents artificial inflation, and ensures fair pricing and expanded choices for the public.
