Grab-Uber merger may have infringed competition laws, says Singapore watchdog

      Published on Sunday, 1 April , 2018      122 Views     

The Competition Commission of Singapore (CCS) suspects that Southeast Asia’s leading ride-hailing app Grab has infringed the country’s Competition Act by purchasing rival Uber’s Southeast Asian operations, it said in a statement.

The CCS began investigating the deal on March 27, and the outcome is yet to be determined. In the interim, it is proposing that both parties maintain their pre-transaction pricing, pricing policies, and product options.  This is the first time that the Singapore body has issued such a notice following a merger.

The directive requests both parties to refrain from obtaining “any confidential information, including but not limited to information pertaining to pricing, formulas, customers, and drivers” from each other.

Finally, the proposal asks Grab to ensure that “Uber drivers joining its Grab’s ride-hailing platform of their own accord are not subject to any exclusivity clauses, lock-in periods and/or termination fees.”

The CCS will accept written submissions from both parties before deciding whether to implement the proposal. If issued, the directive will take effect immediately and last until the investigation is completed.

In response to the statement from CCS, Grab has “voluntarily committed to maintaining our fare structure and will not increase base fares,” Lim Kell Jay, head of Grab Singapore, tells Tech in Asia.

A key consideration for the watchdog may be Grab’s classification. Is it a third-party taxi booking app or a taxi operator? If it’s the former, it would own a monopoly.

If it’s the latter, it may be judged to be competitive with ComfortDelGro, which is Singapore’s largest taxi operator.

Legal precedent may play a role in the decision. Despite its protests, Uber was deemed a transport operator by the European court of justice. In a lot of ways, Grab is similar to a taxi operator in Singapore: It owns a car rental servicewhich supplies vehicles to Grab drivers.

Another consideration for CCS may be the future competitive landscape. Singapore has seven taxi operators, though the smaller ones partner with Grab to accept bookings through its app. Local app Ryde will launch a car-hailing service, but it has only raised US$1.5 million dollars from investors compared to Grab’s billions. Indonesia’s Go-Jek plans to announce an expansion to three Southeast Asian countries, but no other details have been revealed yet.

Concern from all quarters

Since the merger announcement, consumers worry that prices for Grab’s rides may rise. Some have also raised data privacy concerns after Uber sent a notice to its users that their data will be automatically transferred to Grab.

“I personally think Uber should be asking customers if they are OK with the data transfer or not. As I know they are not automatically porting my account over, so why should my Uber data be sent to Grab without my consent?” asked Michael Smith Jr., a partner at venture capital firm SeedPlus, on e27.

Lawyer Choo Zheng Xi believes Uber and Grab may have breached Singapore’s Personal Data Protection Act (PDPA) “by purporting to transfer Uber user data to Grab without users’ express consent.” Choo is a litigation lawyer and director at Singapore-based law firm Peter Low & Choo.

Bulgarian Business Club London

Category News | 2018/04/01 latest update at 3:30 PM
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