Grab and Uber Fined By Singapore's Competition Comission Over Merger

Edgar Su  Reuters

Edgar Su Reuters

Following a proposed decision in July, the Competition and Consumer Commission of Singapore (CCCS) on Monday formally hit the companies with fines totalling $9.5 million.

The Competition and Consumer Commission of Singapore (CCCS) fined Uber S$6.5 million and Grab, S$6.4 million, the report said.

The latest directions include ensuring that Grab drivers are not required to use Grab exclusively; removing Grab's exclusivity arrangements with any taxi fleet in Singapore; and requiring Uber to sell the vehicles of Lion City Rentals to any potential competitor who makes a reasonable offer, or to Grab but only with CCCS's approval. It also said Grab's effective fares went up by 10-15% after the Uber merger. The CCCS has also finalised several measures to lessen the impact of the transaction on drivers and riders, and open up the market for new players.

"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. "Companies can continue to innovate in this market, through means other than anti-competitive mergers", said CCCS chief executive Toh Han Li. It also banned Grab's exclusivity agreements and said the company must stick to its pre-merger pricing algorithm and driver commission rates.

But Grab echoed its earlier sentiment toward the CCCS' "narrow" approach to its definition of competition.

In addition, Uber would have to sell the vehicles of Lion City Rentals, its local auto rental business, to any competitor with a reasonable offer.

According to the competition watchdog, the financial penalties were calculated based on various components including both parties' turnover, seriousness of the infringement, and mitigating factors such as whether the companies were cooperative. It proposed the removal of Grab's exclusivity arrangement with any taxi or chauffeured private hire vehicle fleet in Singapore.

As for whether it will appeal the decision, Grab told CNET in an email, "We will review the CCCS' final decision in detail before making a decision". For example, we are studying data and vehicle-sharing services to play our part to optimise Singapore's overall transport network.

Grab added that the merger was within its legal rights and maintained it did not intentionally or negligently breach competition laws. We also note that the LTA is reviewing the regulatory framework for the point-to-point transportation sector, which we hope will address non-exclusivity across the industry. Have you experienced a rise in Grab fares in the past few months?

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