SG fines Grab, Uber $9.5 million for 'anti-competitive' merger

A steep price to pay
by Drei Laurel | Sep 24, 2018
PHOTO: Drei Laurel

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

In a statement released earlier today, the CCCS released findings following a review of the merger between the two ride-hailing giants, which resulted in Grab owning about 80% of the industry's market share.

"At the conclusion of its investigation, CCCS has found that the Transaction is anti-competitive, having been carried into effect, and has infringed section 54 of the Competition Act by substantially lessening competition in the ride-hailing platform market in Singapore," the CCCS said. 

To "remedy" the situation, the CCCS has directed Grab to allow drivers to use any ride-hailing platform of their choice, to remove "exclusivity arrangements" with Singaporean taxi fleets, and to maintain its pricing algorithm at pre-merger rates.

On top of all that, the CCCS has imposed the abovementioned penalties to Grab and Uber "to deter completed, irreversible mergers that harm competition."

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"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," said CCCS chief executive Toh Han Li in a statement.

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"Companies can continue to innovate in this market, through means other than anti-competitive mergers," the official added.

We reached out to Grab for a statement, and this is what the company had to say: "Grab is heartened to receive the support of governments across Southeast Asia to enable us to serve Southeast Asians better. The recent decisions by the Philippine Competition Commission and CCCS in not pursuing the route of unwinding the transactions demonstrate a deeper appreciation of Grab's potential to serve the region."

Do you think the CCCS findings and penalty are just? 

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PHOTO: Drei Laurel
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