Competition watchdog conducts in-depth review on Grab’s proposed takeover of Trans-cab

The Competition and Consumer Commission of Singapore (CCCS) has started an in-depth review of the proposed acquisition of Trans-cab by Grab.

“Upon completion of the review, CCCS will decide whether to issue a favourable or unfavourable decision on the proposed acquisition,” said the regulator on Wednesday (Jan 31).

The initiation of the phase two review followed the regulator’s rejection, on Nov 24, over Grab’s proposed commitments to address the competition concerns raised after the phase one review. CCCS had found that without an in-depth review, it was unable to conclude that the commitment proposal adequately addressed those concerns.

CCCS noted that Grab’s proposed actions did not fully address the issue that the proposed acquisition may give the super-app operator “the ability and incentive to leverage its ownership of the Trans-cab fleet”. Grab could induce Trans-cab drivers to use Grab’s ride-hail platform, while discouraging them from using rival ride-hailing platforms.

The competition watchdog added that the two-year duration for the commitments proposed by Grab was insufficient to address the concerns which would arise from “a permanent change in market structure”.

“CCCS also found Grab’s monitoring mechanism, which was to be self-policing in nature, to be insufficient.”

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The statutory board under the Ministry of Trade and Industry commenced the phase two review on the proposed acquisition after Grab’s further filing of relevant documents on Jan 25.

It added that during this in-depth review, Grab may propose revised commitments to address any competition concerns identified.

The Nasdaq-listed Singapore-based technology company proposed the acquisition of Trans-cab last July, which would entail about 2,200 cabs and more than 300 private-hire vehicles. The acquisition would also include Trans-cab’s vehicle workshop and fuel pump operations.

CCCS received the deal application by both parties last August and subsequently launched its phase one review. It raised competition concerns in October, saying that the takeover may increase barriers to expansion and entry for Grab’s competitors.

In 2018, after Grab’s acquisition of Uber’s South-east Asian business and Uber’s acquisition of a 27.5 per cent stake in Grab, CCCS issued an infringement decision and imposed S$13 million in financial penalties after a six-month review.