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Philippines: Grab, Uber fined P16M for status quo violations
The country’s antitrust watchdog has imposed a P16-million fine against ride-hailing firm Grab Philippines and erstwhile rival Uber for failing to observe the status quo while their merger was being reviewed.
The Philippine Competition Commission (PCC), in a statement, said the two firms had violated “key provisions” of its Interim Measures Order (IMO), issued in April ahead of Grab’s takeover of Uber.
“The IMO is a mechanism that protects the integrity of the PCC review and adjudicatory process. It requires full compliance by both Grab and Uber and these fines reflect their deficiencies and violations,” PCC Chairman Arsenio Balisacan said in a statement.
“Undue difficulties generated by the parties become efficiency challenges in PCC’s review process,” he added.
Specifically, both Uber and Grab were collectively fined P4 million for failing to keep their businesses separate while the review was being held. They were also penalized for failing to delay Uber’s assumption of a board seat in Grab during the review period.
Grab, meanwhile, was fined another P8 million for failing to maintain conditions such as pricing policies, rider promotions, driver incentives, and service quality. Uber was ordered to pay P4 million or half of Grab’s fine for the same set of violations.
The PCC also noted that Uber had to comply with a cease-and-desist order issued by the Land Transportation Franchising and Regulatory Board, and that both firms’ Transition Services Agreement acknowledged that they had to comply with regulators.
“They proceeded with the execution of the [merger] agreement during the review period,” PCC Commissioner Stella Luz Quimbo said in a briefing.
“PCC initiated a motu propio review on April 3. On April 6, we issued interim measures to ensure that the review process as well as our ability to impose remedies will not be prejudiced,” she noted.
“We asked Uber to come back to the market and operate independently from Grab,” Quimbo continued.
“We asked for a status quo while we are undergoing a review and we wanted to ensure that we will be able to conduct an objective assessment.”
Quimbo said the antitrust watchdog could impose further sanctions against Grab, which now dominates the Philippine ride-sharing market.
“These fines pertain only to the interim measures order. We are monitoring the compliance of Grab to their voluntary commitments so if we find that they are not fully compliant, we are able to impose fines again up to P2 million,” she said.
“In an extreme situation where there would be a blatant disregard for those voluntary commitment there’s still a possibility of prohibiting the merger,” Quimbo added.
PCC Commissioner Johannes Bernabe said Grab and Uber were welcome to challenge the fines.
“There is a mechanism which is the motion for reconsideration, which is always available to any party and then after that in case that [the motion] is denied, they can always seek the review of the Court of Appeals,” he said.
Sought for comment, Grab Public Affairs Head Leo Gonzales said the company was “studying all legal options with regard to the fined imposed by the PCC.”
“We will continue to provide additional information as it becomes available,” he added.
The PCC conditionally approved the Grab-Uber merger in August, warning that breaches of service commitments would lead to substantial fines or an outright cancellation of the transaction.
“The PCC’s Commitment Decision holds Grab to a standard as if Uber were present in the market,” Balisacan said in announcing the approval.
“In effect, while Grab operates as a virtual monopolist, the commitments assure the public that quality and price levels that would prevail are those that had been when they still faced competition from Uber,” he added.
A third party will be monitoring Grab’s compliance over a year, the watchdog, with the period to be cut to six months if the ride-sharing firm is “able to show that there is already competition [in the market].”
Last week, the PCC said it had tapped UK-based Smith & Williamson to conduct the one-year audit.
Source: https://www.manilatimes.net/grab-uber-fined-p16m-for-status-quo-violations/453418/