SINGAPORE – In an unprecedented move, the Competition Commission of Singapore (CCS) has issued proposed Interim Measures Directions (IMD) to ride-hailing firms Grab and Uber on their merger to “preserve and/or restore competition and market conditions”, said the competition watchdog in a media release on Friday (March 30).
This means that both parties will have to maintain their pre-transaction pricing, pricing policies and product options for “chauffeured personal point-to-point transport passenger and booking services” in Singapore.
Under the proposed IMD, Grab and Uber will not be able to obtain any confidential information from the other party, including information related to pricing, formulas, customers and drivers, said the commission. Grab will also ensure that Uber drivers joining Grab’s ride-hailing platform of their own accord are not subject to any exclusivity clauses, lock-in periods and/or termination fees.
The CCS also confirmed in its media release that it had commenced an investigation on Tuesday into the “un-notified transaction” between Grab and Uber for the sale of the latter’s South-east Asia ride-hailing business to Grab.
“CCS has reasonable grounds for suspecting that section 54 of the Competition Act has been infringed by the transaction due to substantial lessening of competition in relation to the chauffeured personal point-to-point transport passenger and booking services market in Singapore,” said its statement.
As the commission has not completed its investigations, it has issued the proposed IMD to both firms in order to preserve and/or restore competition and market conditions. Under the Competition Act, CCS has the authority to issue interim directions in relation to mergers “which have not been notified to it but are under investigations”.
“This is the first time CCS has proposed an IMD on any business in Singapore,” said the CCS.
“The Parties will be given an opportunity to make written representations to CCS upon receipt of the proposed IMD. CCS will consider the written representations before making a decision on whether or not to issue the IMD.”
The commission added that any prohibited actions taken by the parties prior to the proposed IMD must be addressed immediately, either by reversing the action, or taking other actions as agreed with CCS.
“The parties have to comply with the IMD unless it is withdrawn by CCS or successfully challenged on an appeal to the Competition Appeal Board,” added the CCS.
It has been a busy week for the ride-hailing industry, as Grab announced on Monday that it had acquired Uber’s South-east Asia operations in the largest-ever deal of its kind in the region. The acquisition included Uber’s operations in Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.
The move had prompted concerns – particularly from users of both platforms – with transport experts stating that a monopoly here could lead to a dominant player abusing its market power and raising prices.