Thailand
Singapore competition watchdog fines Uber, Grab more than S$13m for merger
GRAB and Uber must pay more than S$13 million in fines for their merger because the deal “removed Grab’s closest rival to the detriment of Singapore drivers and riders”, Singapore’s competition watchdog said on Monday.
Uber’s share of the fine is S$6.58 million and Grab’s is S$6.42 million, according to a statement by the Competition and Consumer Commission of Singapore (CCCS), which formally issued its Infringement Decision.
In levying the financial penalties, CCCS said that it has taken into account the relevant turnovers of the parties; the nature, duration and seriousness of the infringement; as well as aggravating and mitigating factors, such as whether the parties were cooperative.
“Financial penalties deter the completion of irreversible mergers that harm competition,” the Commission said.
The competition authority added that it has found that Grab had increased ride-hailing prices by 10 to 15 per cent after Uber’s exit from Singapore; and that potential competitors such as Ryde were hampered by exclusivities and could not scale to compete effectively against Grab.
CCCS said it has also issued non-financial directions to both parties to “lessen the impact of the transaction on drivers and riders”. These appear to be very similar to the proposed interim directions CCCS had issued earlier this year.
The latest directions include ensuring that Grab drivers are not required to use Grab exclusively; removing Grab’s exclusivity arrangements with any taxi fleet in Singapore; and requiring Uber to sell the vehicles of Lion City Rentals to any potential competitor who makes a reasonable offer, or to Grab but only with CCCS’s approval.
Uber had on March 26 sold its South-east Asian business to Grab for a 27.5 per cent stake in Grab, in a move believed to help it mitigate its losses from intense competition against Grab and Go-Jek in the region.
CCCS had on March 27 commenced an investigation on the basis that the transaction “may have” infringed the Competition Act as anti-competitive merger.
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.
The commission completed its investigation on July 5, and issued a Proposed Infringement Decision against the parties and invited public feedback on the possible remedies to address the harm to competition resulting from the transaction.
CCCS said: “CCCS’s final decision and directions open up the market and level the playing field. Companies can continue to innovate in this market, through means other than anti-competitive mergers.”
Source: https://www.businesstimes.com.sg/transport/singapore-competition-watchdog-fines-uber-grab-more-than-s13m-for-merger