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Vietnam authority rules no violation in Grab’s Uber acquisition
The decision was handed out at the VCC’s hearing on the case, which was held on June 11 with the presence of all parties involved.
On June 17, the VCC announced its decision rejecting conclusion from the Vietnam Competition Authority (VCA) under the Ministry of Industry and Trade (MoIT) that Grab has infringed the competition law by acquiring Uber’s operation in Southeast Asia, including Vietnam’s market.
According to the VCC, the acquisition deal between Uber and Grab did not translate into an act of economic concentration by obtaining ownership of another enterprise as stipulated in Paragraph No.3 under Article 17 of the Competition Law and Article 34 under Decree No.116 on Competition, providing detailed regulation for implementation of a number of articles of the Law on Competition.
Grab on March 26, 2018 confirmed its acquisition of Uber’s Southeast Asia operation for an undisclosed sum, raising concern over its alleged monopoly status in the region’s ride-hailing market.
On March 27, the VCA requested Grab to report on the deal, with a view to determining whether the deal is in conformity with the Law on Competition.
According to the law, if an economic concentration by an enterprise, in this case, an acquisition of another enterprise in the market, results in a combined share in the relevant market of 30 – 50%, the legal representative of such an enterprise must notify the administrative body for competition before carrying out the economic concentration.
Failure to do so may result in imposing a fine of up to 10% of total turnover of the infringing organization or individual in the financial year preceding the year in which the prohibited practice took place.
If the combined market share in the relevant market is more than 50%, the deal may even be prohibited.
On May 16, the VCA’s preliminary investigation result showed that the combined market share from economic concentration between Grab and Uber in Vietnam exceeded 50%.
On September 24, 2018, Singapore’s competition watchdog Competition and Consumer Commission of Singapore (CCCS) fined Grab and Uber a combined US$13 million for their merger in March, in which Grab was fined about US$6.4 million and Uber US$6.58 million.