Ride-hailing monopoly / Malaysia and the Philippines set to investigate recent Grab-Uber deal

Posted on: April 3, 2018 | Business

Malaysia and the Philippines have joined Singapore in scrutinising the anti-competitive nature of the recent Grab-Uber merger 

Vietnamese driver from Uber company and his passenger ride on a motorbike through the streets of Hanoi, Vietnam Photo: Luong Thai Linh / EPA-EFE

Competition watchdogs in Malaysia and the Philippines have announced that they will investigate whether Grab’s recent acquisition of Uber’s Southeast Asian operations undermines competition in the ride-hailing market, just days after the Competition Commission of Singapore (CCS) announced that it had grounds to suspect the two ride-hailing companies had breached Singapore’s Competitions Act.

Both countries joined Singapore in expressing concern that the deal would usher in a monopoly for Grab, which would provide the Singapore-based company with the freedom to dramatically increase prices.

While the Philippine Competition Commission has not yet determined whether the deal reaches the $38.3m (2 billion PHP) threshold that, along with other criteria, automatically triggers a review, it has said that it will launch a review of its own volition.

A review by the Philippine Competition Commission will seek to determine whether the deal is likely to lead to an increase in prices, a decrease in the quality of services, a reduction in consumer choice or serve as an insurmountable barrier to new players intent on entering the market.

Meanwhile, Malaysian government minister Nancy Shukri told Reuters that her government would not tolerate any anti-competitive behaviour.

“We won’t take it lightly. We will monitor this because it is still early days and we don’t know what will happen next,” she said. “We have stressed that if there is any anti-competitive behaviour, the Competition Act will come into force. We have spelt this out to them.”

Nancy added that Grab had assured the Malaysian government in a meeting last week that it would not raise prices for the time being.

The announcements follow hot on the heels of the CCS’s threat to slam the breaks on the proposed deal in Singapore if it breached the country’s Competitions Act. 

Along with other interim measures, Singapore’s competition watchdog proposed that Uber and Grab maintained their independent pre-transaction prices and refrained from further integrating their businesses while it investigated the deal.

The commission said that it would listen to suggestions to safeguard competition proposed by both ride-hailing companies before issuing its final directive.

If the regulatory body finds that the current deal is likely to significantly undermine competition, it has the power to block the merger from being completed. 

While some analysts see the investigations as potential stumbling blocks for the integration – which is set to be completed by 8 April – Grab has characterised them as little more than routine bureaucratic procedures.

“This is a normal regulatory step in a deal of this size as part of Grab’s overall strategy to cooperate with interested regulators,” a Grab spokesperson told Nikkei Asian Review.

“Grab has always been customer-first, and this will not change after the acquisition,” the spokesperson added. “This deal is good for consumers.”

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