Singapore: CCCS finds Grab/Uber abused dominance, imposes remedies

Grab and Uber were slapped with fines and restrictions after the Competition and Consumer Commission of Singapore (CCCS) concluded the merger between the two resulted in higher prices.

Reuters, citing the CCCS, reported the combined US$9.5 million in fines was small compared to the companies’ valuations; it, along with other measures, marks the largest actions against the two companies since they announced their deal in March. In the deal, Uber sold its Southeast Asian unit to Grab and got 27.5% of the company as a result. Reuters noted that the CCCS said Grab drivers have to be able to work for anyone and not exclusively for Grab and that any exclusivity deals with taxi fleets have to be canceled. Meanwhile, Uber has to sell its car rental business to a rival if it makes a reasonable offer and can’t sell the vehicles to Grab unless it gets approval by regulators. Reuters reported that the Uber unit known as Lion City has 14,000 vehicles as of December.

In announcing the actions in which Uber was fined S$6.6 million (US$4.8 million) and Grab was fined S$6.4 million (US$4.7 million), Reuters reported the CCCS stated fares have increased between 10% and 15% since the deal was announced and that Grab now has 80% market share. Uber told Reuters it is considering appealing, saying the ruling was due to an “inappropriately narrow definition of the market.” Grab told Reuters it would follow the ruling of the CCCS. Meanwhile, Indonesian competitor Go-Jerk welcomed the moves by the CCCS, stating in the report: “we’re encouraged to see the measures being taken to level the playing field – it will have a significant effect on our strategy and timeline.”

Both companies have a month to appeal the ruling, reported Reuters, noting the deal is undergoing an antitrust rule in Vietnam. The deal could be blocked there as the market share of the combined company is more than 50%, noted the report.

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