GMA vs ABC CORPORATION, MEDIA PRIMA BERHAD, and MPB PRIMEDIA
GR 205986 / January 11, 2023
Facts:
Citynet entered into a Co-production/blocktime agreement with Zoe Broadcasting. Later, Citynet assigned all its rights under the agreement to GMA, which then undertook the "programming, launching and airing of
shows and news broadcasts of QTV-11.
ABC-5, ranked fifth in Mega Manila viewership. However, it was found out that it sold, thru a Blocktime agreement, its airtime to Primedia, a Malaysian corpo which seeks to establish a company in the Philippines which it would own 70%.
GMA. Citynet and Zoe filed before the RTC a complaint against ABC-5 for unfair competition. The plaintiffs claimed that the Blocktime 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,21 but also the Anti-Dummy Law. It was dismissed stating that the issue on foreign ownership of mass media and the Anti-Dummy Law related to the exercise of ABC-S's legislative franchise, which should be resolved in quo warranto proceedings.
GMA and Citynet filed a Petition for Certiorari before the Court of Appeals. CA affirmed the RTC decision that the plaintiffs violated the doctrine on exhaustion of administrative remedies for failing to seek initial recourse with the National Telecommunications Commission, which had primary jurisdiction over the matter.
Issue:
1. W/N the CA erred in affirming the dismissal of petitioner’s amended complaint.
2. W/N the issue of unfair competition must be resolved ahead of the issue of constitutionality of the Blocktime Agreement.
Ruling:
NO. Petitioners contend that although respondent Primedia's Articles of Incorporation provides that it is Filipino-owned, there are indications that it is but a subsidiary of respondent Media Prima Berhad. They also claim that not only did the transfer of control and management of respondent Primedia over respondent ABC-5 's airtime, program content, and commercial spots sales undermine the nationalized broadcast media, but it also caused unfair competition among the local broadcasting industries.
It is evident from the causes of action in the Amended Complaint that the matter of unfair competition is not inherent in ascertaining the issue on constitutionality. Therefore, it need not be mandatorily resolved ahead of such allegation.
This Court finds the filing of the action before the trial court premature due to the existence of predicate factual issues demanding the National Telecommunications Commission's competence, owing to the doctrine of primary jurisdiction.
Pertinent in this case is the doctrine of primary jurisdiction, where "courts cannot and will not determine a controversy involving a question which is within the jurisdiction of an administrative tribunal having been so placed within its special competence under a regulatory scheme." As such, courts "may suspend the judicial process pending referral of such issues to the administrative body for its view or, if the parties would not be unfairly disadvantaged, dismiss the case without prejudice."
The National Telecommunications Commission has the "exclusive jurisdiction to supervise, regulate and control telecommunications and broadcast services/facilities in the Philippines." It also regulates television companies' ownership due "to its broader regulatory power of ensuring and promoting a 'larger and more effective use of communications, radio and television broadcasting facilities' in order that the public interest may well be served." It is also mandated to "maintain effective competition among private entities engaged m the operation of public service communications.
The Regional Trial Court correctly gave way to the National Telecommunications Commission to ascertain underlying factual issues demanding its specialized knowledge. As such, this Court affirms the dismissal of petitioners' Amended Complaint for failing to state a cause of action against respondents.