In Singapore, Uber’s appeal against S$6.58m fine for anti-competitive Grab merger dismissed

The Competition Appeal Board has upheld a financial penalty imposed on Uber over its merger with former rival Grab. — TODAY pic
The Competition Appeal Board has upheld a financial penalty imposed on Uber over its merger with former rival Grab. — TODAY pic

SINGAPORE, Jan 13 — An appeal by ride-hailing firm Uber against a S$6.58 million (RM20 million) financial penalty for its merger with former rival Grab in 2018 has been dismissed, the Competition and Consumer Commission of Singapore (CCCS) said in a statement today.

CCCS had deemed that the American ride-hailing giant’s sale of its South-east Asian business to Grab for a 27.5 per cent stake in the latter had resulted in a “substantial lessening in competition” in the ride-hailing platform market here.

This move had also infringed section 54 of the Competition Act, CCCS added.

The Competition Appeal Board (CAB) — which hears appeals against decisions by the competition watchdog — ordered Uber to pay CCCS’ costs in relation to the appeal. That sum was not specified in the media release.

CCCS had in September 2018 handed down its decision on the Grab-Uber merger after a six-month review, imposing a total of more than S$13 million in financial penalties on the two ride-hailing firms, after ruling that the deal was "anti-competitive".

Grab did not contest the decision, paid the financial penalty of S$6.42 million and complied with CCCS’ directions.

While Singapore has a voluntary notification merger regime, CAB noted that it does not mean there are no risks to parties in proceeding with a merger before first notifying CCCS.

“Particularly in situations where the merger is irreversible, as was the case for Uber, the merger parties run not just the risk of infringing section 54 of the Competition Act, but also the further risk that any commitments they may subsequently offer may be rejected by CCCS as inadequate or inappropriate.”

These commitments may include to remedy, mitigate or prevent any substantial lessening in competition or any adverse effects that result or may result from the completed merger, CCCS added.

Said CCCS chief executive Sia Aik Kor: “The CAB’s decision affirms the key findings made by CCCS in the Infringement Decision and reinforces the message that mergers that substantially lessen competition in Singapore are prohibited”.

“While merger parties may perform a self-assessment to determine if their merger would lead to a substantial lessening in competition, they should apply to CCCS for guidance or a decision if they have concerns or are unsure as to whether their merger may result in a substantial lessening in competition.”

She added that where merger parties decide to implement their merger without first notifying and obtaining the necessary clearances from CCCS despite potential competition concerns, they bear the risk of infringing section 54 of the Competition Act.

“Should CCCS have reasonable grounds to suspect that an anti-competitive merger has been completed or is anticipated, it is empowered to investigate and take appropriate enforcement action,” Sia added.

Separately, CCCS said it is actively monitoring the potential merger between Grab and Gojek, and has sought further information from the two firms. — TODAY

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