Grab, Uber deal may have breached Competition Act; watchdog calls for pre-sale operations to continue
Singapore
IN the first such move of its kind, the Competition Commission of Singapore (CCS) is proposing to impose interim measures on both Uber and Grab as it investigates Grab's acquisition of its American rival's ride-hailing business in Southeast Asia, noting that it has reasonable grounds to suspect that a section of the Competition Act has been infringed.
The measures require both companies to maintain independent pricing, pricing policies and product options, as they were before the sale.
Grab had earlier said when it announced the acquisition, that UberFlash - a dynamic pricing app which Uber launched with taxi giant ComfortDelGro in January - will cease on April 8, while the UberEats app will run until the end of May.
This is the latest development in the Grab-Uber deal since the CCS launched an investigation on March 27 into what it described as an "unnotified transaction" between Grab and Uber.
The competition watchdog said it has reasonable grounds to suspect that a section of the Competition Act has been infringed due to substantial reduction of competition in the chauffeured personal point-to-point transport passenger and booking services market here.
Under the act, the commission has the power to issue interim directions in relation to mergers it has not been alerted to and which are under investigation.
The CCS said both companies must not take any actions that will lead to the integration of their businesses here, and affect the viability and saleability of the businesses. They also should not take actions that could prejudice the commission's ability, power and options to subsequently direct the divestment of business operations in the affected markets.
These directives will take effect from their date of issue until the completion of the commission's investigations, or unless otherwise specified.
In the meantime, Grab and Uber will be given an opportunity to make written representations to the commission.
The commission will then consider these representations before making a decision on whether to issue the directives.
In the event the commission, a statutory board, finds that a merger situation is expected to result in a substantial reduction of competition, it has powers to require the merger to be unwound or modified. Parties risk penalties as well as commission-issued directives and remedies if the Competition Act has been infringed.
