Grab maintains it 'complied fully' with Competition Act amidst proposed RM86.8m fine

Grab Malaysia has maintained that it complied fully with the Competition Act 2010 and is surprised by the RM86.8 million fine proposed by the Malaysian Competition Commission (MyCC) for allegedly breaching the act.

According to multiple media reports from outlets including The Star and the New Straits Times, MyCC's investigations found that Grab had allegedly "abused its dominant position" by imposing "restrictive clauses" on its drivers. The clauses reportedly prevented Grab drivers from offering and promoting advertising services to its competitors and the transit media advertising market, media reports said.

The reports also said that MyCC intends to impose a RM15,000 fine per day from the date of service of the proposed decision, if the company does not take "remedial actions" to address competition concerns as instructed by MyCC. MyCC’s CEO Iskandar Ismail added that the company has 30 days to present its defence before a final decision is made.

Grab said that its legal counsels are currently studying the proposed decision and that it will be submitting its written representations to MyCC by 27 November 2019, adding:

We believe that it is common practice for businesses to decide upon the availability and type of third party advertising on their respective platforms, tailored according to consumers' needs and feedback.

The Competition Act 2010 states that a company is prohibited from engaging, whether independently or collectively, in any conduct which amounts to an abuse of a dominant position in any market for goods or services.

Grab recently defended its acquisition of Uber following MyCC's deeper anti-competition probe. Grab's spokesperson said that the company went ahead with the Uber acquisition "in the good faith belief" that the acquisition will create more efficiencies and benefits for the public in the ride hailing sector. Meanwhile in 2018, MyCC said it would keep an eye on Grab for possible anti-competitive behaviour after its acquisition of Uber.

Across the border, Grab was also fined SG$13 million alongside Uber by the Competition and Consumer Commission of Singapore (CCCS) for the merger, which led to a “substantial lessening of competition” in Singapore. A SG$6.42 million was imposed on Grab while Uber received a SG$6.58 million fine. The Singapore competition watchdog said previously that the penalties were imposed  “deter completed, irreversible mergers that harm competition”.

“Mergers that substantially lessen competition are prohibited and CCCS has taken action against the Grab-Uber merger because it removed Grab’s closest rival, to the detriment of Singapore drivers and riders,” Toh Han Li, chief executive, CCCS said.

[A+M’s PR Asia will come to Malaysia this November, gathering together some of the finest minds in industry to explore the exciting and developing world of digital PR. Join us for a series of exclusive case studies, interactive and thought-provoking discussions at PR Asia on 20 November in Kuala Lumpur, Malaysia. Register now.] 

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