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Competition watchdog reviews Grab-Uber deal

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By Janina C. Lim, Reporter

THE Philippine Competition Commission (PCC) said on Tuesday it has started a review of Grab Holdings, Inc.’s acquisition of the Southeast Asian business of rival Uber Technologies, amid concerns the deal could create “virtual monopoly” in the ride-sharing market.

The competition watchdog issued Resolution No. 08-2018 which directs its Mergers and Acquisitions Office (MAO) to look into Grab Holdings, Inc. and its Philippine unit MyTaxi.Ph’s deal to buy the assets of Uber BV and Uber Systems, Inc. (Uber Philippines).

The PCC has notified the companies, saying they cannot consummate the deal pending the conclusion of the review.

Under the PCC rules, it is allowed to conduct a motu propio review of any deal if there are “reasonable grounds.”

“A preliminary assessment of the transaction conducted by the Mergers and Acquisitions Office (MAO) indicates that there are reasonable grounds that the transaction may likely lessen, prevent or restrict competition substantially,” the resolution read.




The PCC further noted the Grab-Uber deal “will result in a substantial increase in concentration of an already concentrated market in an industry that provides a basic public service.”

“Once they merge and capture about 80% of the market, they can do many things,” PCC Chairman Arsenio M. Balisacan said in a press briefing. “There are many ways by which a firm with so much dominance in the marketplace can play to restrict market competition. And that’s what we want to know. We want to have a firm information on what those potential abuses are,” he added.

Grab and Uber have not submitted a notification to the competition watchdog, but the PCC said the companies “have made representations that the transaction is not covered by the compulsory notification requirements.”

Asked whether the review will cover the pricing mechanism that Grab will use after the deal, Mr. Balisacan said, “We still need to understand how the pricing system works and to what extent that they can manipulate the prices. The capacity to do it is there because of the market share. But whether they have the incentive to do it is something else.”

The PCC is set to meet officials from Grab and Uber on Thursday to allow them to comment on proposed interim measures, such as extending the local independent operations of the two ride-hailing apps.

Uber has already informed its users it will transition all of its services to the Grab platform by April 8.

Mr. Balisacan said the MAO has been given 75 days to complete the review, but it can be extended by another 120 days if needed.

“It can be much earlier if the parties will cooperate,” Mr. Balisacan said, adding that reviews like these are usually fast-tracked when concerned parties step up to propose remedies to settle anticompetitive concerns.

“[T]hey (Grab and Uber) said that they will cooperate with us. And we are counting on that,” Mr. Balisacan said.

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