Two Filipino lawyers are among the winners of the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) Competition Law Essay Contest.
The contest was part of a multi-phase Competition Law Implementation Program (CLIP) supported by the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) Economic Cooperation Support Program (AECSP).
“Online Platforms in a Lockdown Economy – An ASEAN market Experience,” the paper submitted by Abraham Alonzo Guiyab and Maria Fraulaine May Rapal, is among the five winning entries in the open category of the competition, according to the ASEAN Experts Group on Competition (AEGC) and Australian Competition and Consumer Commission (ACCC).
The winning essay discusses how the Philippine economy, dominated by micro, small and medium enterprises mostly belonging to the informal market, coped with the COVID-19 pandemic and quarantine restrictions.
“With the hit of the COVID-19 pandemic, the Philippines has imposed quarantine restrictions to curb the effects of the pandemic. However, the shift in priority from the economy to health left industries in the formal and informal economy at a breaking point. As such, there was a need to adapt and shift into digitalization.”
It notes that digital platforms began to flourish with a significant increase of new consumers to digital service.
Local digital platforms experienced an increase in usage in food delivery service, mobile banking applications, and e-commerce.
Localized lockdowns and checkpoints severely restricted movement, and necessity drove more people than ever towards using fintech and other cashless solutions in order to access shopping platforms while avoiding risk of exposure, the authors said in their paper.
This was facilitated by the fact that larger e-commerce solutions such as Shopee and Lazada offer an integrated shopping experience which facilitated everything from customer acquisition and verification to delivery and order fulfillment.
“It wasn’t only these formal outfits however which cashed in on a consumer base finding themselves ‘captive’ and thus newly receptive to trying out e-commerce transactions, countless informal and cottage industries set up shop in online spaces. Facebook groups, reseller marketplaces, and chat rooms progressed beyond simply being social spaces to being the introductory experience of many informal players into the world of e-commerce,” they added.
The authors said that while the formal platform economy has become dominated by these integrated websites (roughly the equivalent of the shopping mall), smaller and informal players found that their access to the world of e-commerce as now determined by a tech triad: social media sites, fintech and payment methods, and logistics and small parcel delivery-apps.
“Naturally, COVID-19’s impact was not equal between these two sectors: formal players already had infrastructure in place, positioning them to capitalize on this sudden market shift. On the other hand, informal and smaller players would now find themselves navigating platforms and the less-than-transparent content standards that they may impose.”
The authors said that given this innovation, challenges arise on the regulation of virtual space. MSMEs that were initially hesitant to adopt online shopping and e-payment systems were pushed to shift for survival.
However, the government’s competition regulation is quite a sore local issue as previous actions have caused the departure of Uber. As such, since there is yet no law that governs local digital platforms, an analysis of laws proposed by advanced foreign jurisdictions like the European Union, United Kingdom, Japan, and South Korea may be relevant to aid the Philippines in addressing its own issues. For instance, the European Union proposed the Digital Markets Act governing gatekeepers and the Digital Services Act.
“Digital platforms have clearly been placed in a dominant position. For this reason, government regulation to promote product innovation and better options for customers while balancing entry of new participants in this emerging market is paramount,” the authors said.
Other winners in the open category of the competition are Yogi Bratajaya for Safeguarding Competition in the ASEAN Digital Economy: Net Neutrality or Competition Law; Amirah Affendi for Hitch in ASEAN’s Rapid Shift to a Digital Economy; Nancy Cai for The Wave of Big Tech Engulfing Subsea cables; Ali Salmande and Latifah Kusumawardani and Leniency program in Indonesian Competition Law Revision Bill: A lesson Learned from EU and Cooperation in AANZFTA Framework.