Thursday , 19 July 2018
Home >> L >> Legal >> Uber-Grab merger under investigation for possible violation of Singapore competition laws

Uber-Grab merger under investigation for possible violation of Singapore competition laws

Grab’s bid to acquire Uber’s Southeast Asian operations is being investigated in Singapore for possible infringement of market competition laws.

The Competition Commission of Singapore (CCS) said in a statement it had “reasonable grounds for suspecting” the merger infringed section 54 of the country’s Competition Act. This pertained to “substantial lessening of competition” related to the provision of chauffeured point-to-point passenger and booking services, it said.


With businesses fumbling, Singapore must take more care in data aspirations


With businesses fumbling, Singapore must take more care in data aspirations

Singapore government has been opening up user data access to ease information exchange and business transactions, but it should observe some caution as major organisations continue to slip up over security.

Read More

The competition watchdog also noted that it was not notified about the merger, which the companies had publicly announced earlier this week, and had instructed both organisations to adopt interim measures whilst it carried out its investigation.

Grab had earlier announced it was acquiring Uber’s operations and assets, including the latter’s food delivery business, across eight regional markets: Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

The deal would see Uber taking a 27.5 percent stake in Grab, while Uber CEO Dana Dara Khosrowshahi would take a seat on Grab’s board.

In the days following the announcement, Uber began notifying affected customers that it would be moving its services to the Grab platform by April 8. The Uber Eats app would continue to operate until end-May, when the food delivery service would make its migration to the GrabFood platform.

In its public announcement, Grab said it was “cooperating with local regulators” with regards to the acquisition, which it said would “add to” competitive ride-sharing and delivery markets. It added that it would “make a merger notification” to the CCS.

Grab said more than 5 million people across Southeast Asia used its services daily and it operated a network of 5 million drivers and agents.

According to CCS, it issued proposed interim measures in a bid to preserve competition and market conditions, including instructions for Grab and Uber to refrain from taking any action that might lead to the integration of their businesses in Singapore.

Both companies also were not permitted to obtain confidential information from either party, including data concerning customers and drivers as well as pricing.

The Singapore commission noted that this was the first time it had issued an interim measures directive on any business in the country. It added that it had the power to do so with regards to mergers under investigation, and to which it was not notified.

In response, Grab’s Singapore head Lim Kell Jay said in a media statement that the company was “committed” to maintaining its fare structure and would not increase its base fares.

“We urge the government to allow us to freely compete and complement the dominant taxi business,” he said, adding that Grab would work with the commission, Singapore’s Land Transport Authority as well as other industry authorities.

Referring to CCS’s revelation that it had not been notified about the pending merger, Lim noted that Grab and its advisers had carried out “due diligence and legal analysis” before proceeding with the transaction.

He said the company had “engaged with” the commission before signing the deal and, while not required to do so by law, had informed CCS that it would submit a notification before April 16, 2018.

close
==[ Click Here 1X ] [ Close ]==