Published: Mon, September 24, 2018
Business | By Tara Barton

Singapore watchdog fines Grab, Uber US$9.5 million over merger

Singapore watchdog fines Grab, Uber US$9.5 million over merger

The Competition and Consumer Commission of Singapore (CCCS) has fined Grab and Uber a total of $13,001,702 SGD ($9.5 million United States dollars, P500 million) for the two companies' merger, which the agency described as "anti-competitive".

The Competition and Consumer Commission of Singapore (CCCS) said it had issued financial penalties to both companies to "deter completed, irreversible mergers that harm competition".

CCCS had on March 27 commenced an investigation on the basis that the transaction "may have" infringed the Competition Act as anti-competitive merger.

"However, it is unfortunate that the CCCS is taking a very narrow market definition in arriving at its conclusion that the Transaction has led to a substantial lessening of competition", its statement read.

It reiterated its previous stance that the company's deal with Uber was within its legal rights and that Grab "did not intentionally or negligently breach competition laws".

CCCS chief executive Toh Han Li said "mergers that substantially lessen competition are prohibited and CCCS has taken action against the Grab-Uber merger because it removed Grab's closest rival, to the detriment of Singapore drivers and riders".

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In the Philippines, where the deal has been approved, the competition watchdog has said it is monitoring Grab's compliance with conditions meant to improve the quality of service, with any breaches possibly resulting in fines.

Grab agrees that keeping the market open and contestable is best for consumers and drivers, and we will abide by the remedies set out by the CCCS.

Grab has also been told to maintain its pre-merger pricing algorithm and driver commission rates, which the regulator said would protects riders against excessive price surges, and drivers against increases in commissions that they pay to Grab. It proposed the removal of Grab's exclusivity arrangement with any taxi or chauffeured private hire auto fleet in Singapore.

It proposed Interim Measures Directions on March 30 and finalised them on April 13 to lessen the impact of the transaction on drivers and riders, while continuing with the investigation. This, though, then should apply to all market players, it noted. "This is inconsistent with taxi industry practices and does not create a level playing field".

Pointing to the Land Transport Authority, it noted that the country's regulatory framework pertaining to point-to-point transport now was under review and it hoped this meant the non-exclusivity issue would be addressed.

Grab said it had not raised fares since the deal and argued that all transport firms, including taxi operators, should be subjected to non-exclusivity curbs.

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