The Philippine Competition Commission (PCC) has sanctioned
the Boracay Business Administration of Scuba Shops (BBASS) and its 39
affiliated dive operators with a combined penalty of P2.17 million after
determining that they participated in an unlawful price fixing arrangement that
restricted competition in Boracay's diving industry.
According to the antitrust regulator, BBASS coordinated
pricing policies among its members by establishing mandatory minimum charges
for key diving services. Under the agreement, discover scuba diving could not
be offered below P3,000, while open water dive certification courses carried a
minimum price of P25,000. Rather than allowing businesses to compete through
pricing and promotional offers, the association enforced uniform commercial
terms across participating operators.
The restrictions extended well beyond pricing. Member dive
shops were barred from attracting customers through complimentary perks,
including additional dive sessions, masks, T-shirts, meals, or souvenir
photographs. The agreement also imposed a ceiling of 10 percent on commissions
paid to tour guides, hotels, and booking agents. Businesses that failed to
comply with these rules faced financial penalties and, in some instances, the
risk of being forced to cease operations.
BBASS and its members defended the arrangement by arguing
that standardized pricing helped maintain diving safety standards while
protecting the livelihoods of local operators. They also maintained that local
government officials were aware of the pricing framework.
The PCC rejected these justifications, emphasizing that the
Philippine Competition Act expressly prohibits agreements that eliminate or
restrict price competition among businesses. The commission underscored that
regardless of the motivations behind such arrangements, competitors cannot
collectively dictate market prices because doing so deprives consumers of the
benefits of a competitive marketplace.
The regulator further clarified that even if a local
ordinance requires businesses to obtain endorsement from an industry
association before operating, that requirement does not grant private
organizations the authority to determine commercial pricing. Regulatory
oversight and market coordination are separate matters, and no trade
association is legally empowered to replace competitive pricing with
collectively agreed rates.
A competitive market operates much like an open marketplace
where businesses succeed by offering better value, improved services, or more
attractive prices. When competitors agree on what customers must pay, that
competitive process disappears, leaving consumers with fewer choices and little
opportunity to benefit from market forces.
To strengthen competition in the tourism industry, the PCC called on local government units to review and align their ordinances with the National Competition Policy. The commission reiterated that its mandate is to enforce the Philippine Competition Act, preserve fair competition across industries, and safeguard consumer welfare by preventing anti-competitive business practices.
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