The Competition and Consumer Commission of SingaporeÂ (CCCS) has fined Grab and Uber a total of SG$13 million over the two firms’ merger which led to a “substantial lessening of competition” in Singapore. Grab was fined SG$6.42 million while Uber was fined SG$6.58 million.
Singapore’s competition watchdog, CCCS, said that the penalties were imposed to âdeter completed, irreversible mergers that harm competitionâ. In levying the fines, CCCS said that it considered both companies’ turnovers, the nature, duration and seriousness of the infringement, and aggravating as well as mitigating factors such as if both parties were cooperative.
âMergers that substantially lessen competition are prohibited and CCCS has taken action against the Grab-Uber merger because it removed Grabâs closest rival, to the detriment of Singapore drivers and riders,” Toh Han Li, chief executive, CCCS said.
He added that companies can continue to innovate in this market, through means other than anti-competitive mergers.
This comes as CCCS concluded its investigations on the Grab-Uber sale, and said that the saleÂ has infringed section 54 of the Competition Act. The section prohibits mergers that have resulted, or may be expected to result, in a substantial lessening of competition in Singapore.
At that time of its conclusion in July,Â CCCS issued directions to lessen the impact of theÂ deal on drivers and riders, and to open up the market and level the playing field. ItÂ proposed the removal ofÂ Grabâs exclusivity arrangement with any taxi orÂ chauffeured private hire car fleet in Singapore. This is in a bid to increase choices for drivers and riders, as well as improve market contestability.
It also proposed the removal ofÂ exclusivity obligations, lock-in periods or termination fees on all drivers who drive on Grabâs platform, or rent fromÂ Grab Rentals,Â Lion City RentalsÂ or rental partners of Grab. Other proposed remedies also include the maintenance of Grabâs pre-transaction pricing algorithm and driver commission rates until competition is revived in the market, as well as requiring Uber to sell Lion City Rentals to any competitor that makes a reasonable offer. This is to prevent Uber from selling Lion City Rentals or any of its assets to Grab without prior approval from CCCS.
Soon after CCCS put out its proposed measures, GrabÂ called CCCS Â âone-sidedâ for allowing Â new entrants to maintainÂ or sign exclusivity arrangements with drivers, private hire rentalÂ fleet and taxi operators âwithout restrictionsâ, read a CNA report.Â Grab, according to CNA, described this move to be a âdouble standardâ that goes against essence of offering more choices for drivers and riders.
In a statement toÂ MarketingÂ at the time of writing, Lim Kell Jay, head of Grab Singapore explained, âWhile we donât agree with some of the measures in the CCCS PID, we are committed to working with the CCCS to improve upon its proposed remedies to ensure a vibrant and dynamic transport sector. He added todayâs transport sector is fiercely competitive with numerous public and private transportation choices for consumers.
âWe believe a level playing field where participants compete fairly to provide innovative services and better user experiences will benefit consumers and drivers in the long run,” Lim said.
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