The Philippine Competition Commission (PCC) has dismantled a long-running price-fixing scheme among Boracay dive operators, fining the Boracay Business Administration of Scuba Shops (BBASS) and 39 member dive shops a combined P2.17 million in a ruling that could restore price competition and give tourists more choices on one of the country's top beach destinations.

In a decision released Friday, the PCC found that BBASS and its members violated Section 14(a)(1) of the Philippine Competition Act by coordinating prices and restricting competition for scuba diving services on Boracay Island, Malay, Aklan.

The commission also ordered the association and its members to immediately stop enforcing the multi-year pricing agreement, saying it distorted competition and harmed the local tourism market.

The PCC found that BBASS, a non-stock corporation formed to regulate the local diving industry, served as the central organizer of the arrangement through its 2016 Rules and Regulations and pricing agreements adopted in 2018 and 2019.

Under the scheme, member dive shops agreed on minimum prices for key services, including P3,000 for discovery scuba diving and as much as P25,000 for open water diver courses. 

They also barred operators from offering freebies such as extra dives, meals, T-shirts, masks, and photographs, while capping commissions paid to tour guides, hotels, and booking agents at 10 percent. Shops that violated the agreement faced fines and possible closure.

BBASS and its members argued that the pricing rules were meant to promote driver safety, protect livelihoods, and had the knowledge of the local government. The PCC rejected those defenses, ruling that price fixing is illegal regardless of the motivations behind it.

"The PCC emphasized that while trade associations are for the promotion of safety standards, they cannot act as vehicles for price fixing agreements."

The commission also ruled that local ordinances requiring association endorsements for businesses do not give private groups the authority to dictate commercial prices, nor can later ordinances retroactively excuse anti-competitive conduct.

The PCC said it took into account that BBASS and the 39 dive shops are micro, small, and medium enterprises in determining the penalties.

After the sanction, the commission urged local government units to align their ordinances with the National Competition Policy to ensure tourism destinations remain open to fair and free competition.