A group of scuba dive operators and their trade association on Boracay in the Western Visayas have been fined by the Philippine Competition Commission (PCC), after it found that they had engaged in illegal price-fixing that restricted competition in the island’s tourism market.
According to the PCC ruling, the Boracay Business Administration of Scuba Shops (BBASS) and 39 member dive-shops had co-ordinated pricing for diving services over multiple years, setting minimum rates for popular activities such as introductory dives and certification courses.
The BBASS had been established to regulate and protect the local diving industry, but was said to have acted as the central facilitator of the price-fixing agreement, forming a cartel to the detriment of local tourism.
The PCC found evidence of agreed minimum prices, including those for Discover Scuba sessions (around 3,000 pesos or £36) and Open Water certification courses up to 25,000 pesos (£305).
Restrictions had also been imposed on promotions such as free dives, equipment add-ons or bundled extras, while commissions paid to hotels, tour guides and booking agents were capped at 10%, all in violation of the Philippine Competition Act.
Arguments rejected
The PCC rejected arguments from operators that the pricing structure was intended to improve safety or stabilise the industry, and had been imposed with the knowledge of the local government, stating that such justifications did not exempt businesses from competition law.
It imposed a combined fine of about 2.17 million pesos (£26,500) on BBASS and its member dive-shops and ordered them to stop enforcing the pricing agreements immediately. It also instructed the group to stop using internal rules that enforced price floors or penalised any members offering lower prices.
Boracay is one of the Philippines’ most-visited tourist destinations, with scuba diving a key activity. Covering an area of only just over 10sq km it is also one of the most densely developed tourist islands. It has 30-40,000 permanent residents but the daily tourist population can exceed this many times over in peak season.
White Beach
The 25-40 dive-centres typically active at any time include a number of shops affiliated to major training agencies alongside smaller independent operators, concentrated mainly along White Beach. There are some 30 recognised dive-sites a short boat-ride away.
The ruling is likely to lead to increased price competition among dive operators, more promotional offers and package variation and lower costs for tourists seeking certification and recreational dives.
The regulators have also urged other local governments to align tourism regulations with national competition policy to avoid enabling similar instances of co-ordination in the future.
