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Court junks GMA’s unfair competition case against ABC-5, Malaysian partners

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THE Supreme Court has junked the petition filed by GMA Network, and its wholly-owned subsidiary Citynet Network Marketing and Productions Inc. (Citynet) seeking to nullify the blocktime agreement entered into by rival network ABC-5 and Malaysian company Media Prima Berhad (MPB), and Primedia due to unfair competition.

In a 30-page decision penned by Associate Justice Marvic Leonen,  the Court’s Second Division upheld the ruling issued by the Court of Appeals on October 16, 2012, which affirmed the Regional Trial Court of Quezon City’s order dismissing the complaint filed by GMA and Citynet due to lack of jurisdiction.

The controversy stemmed in 2008 when it was reported that ABC-5 sold through a Blocktime Agreement all its airtime to MPB Primedia Inc. (Primedia), except news and Christian programming.

The acquisition was reportedly part of the investment strategy of Media Prima Berhad, a Malaysian corporation, to establish a company in the Philippines of which it would be 70 percent owner.

However, the petitioners alleged that even if Primedia’s Articles of Incorporation stated that it was Filipino-owned, it was nonetheless Media Prima Berhad’s subsidiary, purposely established to purchase and manage a chunk of ABC-5’s airtime content and sales.

The petitioners claimed that it would eventually convey all its rights in the Blocktime Agreement to the MPB Strategic Media Fund, an equity fund set up for Asean media investments of Media Prima Berhad.

The petitioners claimed that the agreement should be declared void under Article 1409 of the Civil Code, not only for violating the limitation in ownership and management of mass media under Article XVI, Section 11(1) of the Constitution, but also the Anti-Dummy Law.

The plaintiffs said that Primedia’s control and management undermined the nationalized broadcast media and resulted in unfair competition among local broadcasting networks.

On the other hand, the respondents maintained that the National Telecommunications Commission (NTC) has jurisdiction over the issue of unfair competition.

They added that the summary dismissal of the case is warranted due to petitioners’ violation of the Rules of Court when they pursued the case despite having previously filed a letter-complaint before the NTC.

By filing the letter-complaint, the respondents said the petitioners acknowledged NTC’s regulatory authority over the matter.

ABC-5 even noted that the petitioners have not even seen the Blocktime Agreement they seek to declare void, thus, cannot say for sure how its contents violate the law.

In denying GMA and Citynet’s petition, the SC ruled that it has no jurisdiction over the issues raised in the petition.

“Here, the issue of whether to nullify the Blocktime Agreement between respondents ABC-5 and Primedia for its supposed constitutional and statutory violations is intertwined with the issue of whether it had indeed, as petitioners allege, transferred control and management of ABC-5 to Primedia, which is a factual question within the Commission’s sphere of concern,” the SC explained.

“More, the imputations of illicit combinations and business practice against respondents rest on the competence of the Commission, which is in the ‘best position to judge matters relating to the broadcasting industry as it is presumed to have an unparalleled understanding of its market and commercial conditions’,” it added.

The SC held that the trial court was correct in giving way to the NTC to ascertain the factual issues raised by the petitioners.

Image credits: Mike Gonzalez via Wikimedia Commons CC BY-SA 3.0

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