Singapore's competition watchdog says Uber-Grab deal infringes competition

SINGAPORE: Singapore's competition watchdog said on Friday that it had reasonable grounds for suspecting competition had been infringed by the agreed deal by ride-hailing firm Uber Technologies Inc to sell its Southeast Asia operations to rival Grab.

The Competition Commission of Singapore has commenced investigation into the transaction and proposed interim measures that will require Uber and Grab to maintain their pre-transaction independent pricing, it said in a statement.

Uber and Grab announced the deal on Monday, marking the US company's second retreat from an Asian market. - Reuters

Below is the statement issued by the Competition Commission of Singapore on Friday:

Measures Directions in Order to Preserve and/or Restore Competition and Market Conditions

30 March 2018

The Competition Commission of Singapore ("CCS") has commenced an investigation on 27 March 2018 into the un-notified[1] transaction between Grab Inc. ("Grab") and Uber Technologies, Inc. ("Uber") (collectively, the "Parties") for the sale of Uber's Southeast Asia ride-hailing business to Grab in exchange for shares in Grab (the "Transaction"[2]).

1) CCS has reasonable grounds for suspecting that section 54 of the Competition Act (Cap. 50B) (the "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 ("CPPT Services") market in Singapore.[3]

2) CCS has not completed its investigation, but to preserve and/or restore competition and market conditions in relation to the CPPT Services market to the pre-Transaction state, CCS has issued proposed Interim Measures Directions ("IMD") to the Parties.

3) The proposed IMD will require the Parties to maintain their pre-Transaction independent pricing, pricing policies and product options in relation to the CPPT Services, and not take any action which may lead to the following in the CPPT Services market:

b) the reduction of the viability and saleability of the Parties' businesses (including but not limited to the ability or incentive of either Party to compete independently of the other Party) and prejudice to CCS's ability, power and options to direct the divestment of any business operations in the affected markets subsequently;

c) and prejudice to the giving of any direction by CCS in any manner.

4) In addition, the proposed IMD will require either Party not to obtain from the other Party any confidential information, including but not limited to information pertaining to pricing, formulas, customers and drivers.Lastly, Grab shall 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.

5) Under the Act, CCS has the power to issue interim directions[4] in relation to mergers which have not been notified to it but are under investigation[5]. This is the first time CCS has proposed an IMD on any business in Singapore. 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.

6) If issued, the IMD takes effect immediately from the date it is issued and shall have effect until the completion of CCS's investigation or unless otherwise varied by CCS.

7) If any of the actions prohibited by the proposed IMD has occurred prior to the issuance of the IMD, the Parties shall address the adverse effects of the Transaction immediately, by procuring the reversal of these actions and/or taking such other actions as agreed with CCS.

8) 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.