Out-Law News 1 min. read
27 Sep 2018, 4:49 pm
CCCS said the financial penalties were imposed "to deter completed, irreversible mergers that harm competition". Grab was fined up to S$6.42m while Uber was fined S$6.58m on September 24.
Grab is a ride-hailing platform in Southeast Asia that launched in June 2012. In March this year Uber sold its Southeast Asian business to Grab in exchange for a 27.5% stake in Grab.
CCCS began an investigation of the merger on March 27, on the basis that the transaction might have infringed the Competition Act. The CCCS investigation was completed on July 5. The CCCS said that Grab had increased prices by 10% to 15% after Uber's exit from the Singapore market and that the CCCS had received many complaints from riders and drivers regarding the increase in effective fares and commissions following the merger.
There are currently five other ride-hailing app companies in Singapore: Singapore-based Ryde, Filo, MVL and Kardi, Indonesia-based Go-Jek and India-based Jugnoo. Following the merger with Uber Grab has an 80% share of the ride-hailing market, which allows it to have "strong network effects" in ride-hailing platform services. CCCS concluded that the large market share creates considerable difficulties for other small market players and new entrants trying to expand into the industry.
In addition to the financial penalties, CCCS issued a series of measures for lessening the anti-competitive impact of the transaction to the market.
Those measures are: ensuring Grab drivers are free to use any ride-hailing platform and are not required to use Grab exclusively; removing Grab’s exclusivity arrangements with any taxi fleet in Singapore so as to increase choices for drivers and riders; maintaining Grab’s pre-merger pricing algorithm and driver commission rates, and-requiring Uber to sell the vehicles of Lion City Rentals to any potential competitor who makes a reasonable offer based on fair market value, and preventing Uber from selling these vehicles to Grab without CCCS’s prior approval.