THE STATE antitrust watchdog has extended its monitoring of Grab Philippines, citing “lingering competition concerns” a year after the company got conditional clearance for its acquisition of Uber’s operation in the country.
In a statement on Tuesday, the Philippine Competition Commission (PCC) said it has extended the effectivity of Grab’s voluntary commitments to Oct. 20 to allow for talks on new or amended commitments that will be effective for another period still to be agreed on.
“Exactly a year after PCC rendered a Commitment Decision on Grab’s acquisition of rival Uber on August 10, 2018, the competition authority finds that the dominance of the merged firms remains unchallenged and competition has not improved in the ride-hailing market,” the watchdog said in its statement.
After raising competition concerns when Grab bought Uber’s Southeast Asia business last year, the PCC gave the merger a conditional clearance, subject to a year-long monitoring of Grab’s voluntary performance commitments involving improvement of service quality, fare transparency, maintaining pricing comparable to the level before its acquisition of Uber’s Southeast Asia business, removal of a “see destination” feature for drivers, driver and operator non-exclusivity, incentives monitoring and an improvement plan.
“These commitments are designed to maintain conditions in the market as if Uber or another competitor were present to set a competitive constraint on Grab,” PCC said in its statement.
“The commitments were also meant to prevent Grab from making it difficult for new players to enter and grow in the ride-hailing market.”
The one-year monitoring period lapsed last Saturday, but PCC Chairman Arsenio M. Balisacan cited a need for a new set of commitments that is “fair and reasonable and that protects consumers from Grab’s currently unchallenged dominance in the market.”
The watchdog said the new commitments may be similar to the old ones, but with adjusted metrics.
“We… hope to raise the level of competitive intensity in the market and bring about market conditions conducive to new entrants,” the statement quoted Mr. Balisacan as saying.
Grab Legal Counsel Erasto Miguel G. Aguila told reporters in a Viber message that the company is “discussing with the PCC… how to proceed moving forward.”
The PCC said should it fail to finish talks with Grab on new commitments by Oct. 20, it will reevaluate the conditional clearance it gave the company for its acquisition of Uber’s business in the country.
“On one hand, the commitments can keep Grab in check from exercising its market power as a virtual monopolist. On the other hand, we also advocate for allowing smaller players to grow or formidable new competitors to enter the market which will be more beneficial to the riding public,” Mr. Balisacan said. — Denise A. Valdez