Antitrust watchdog fines Grab P16 million over Uber deal

Aika Rey
Antitrust watchdog fines Grab P16 million over Uber deal
(UPDATED) Philippine Competition Commission slaps Grab with a fine of P12 million and Uber with P4 million for causing 'undue difficulties' to the review of their deal

MANILA, Philippines (UPDATED) – The Philippine Competition Commission (PCC), the country’s antitrust watchdog, imposed P16-million ($296,741) worth of penalties on ride-hailing giant Grab Philippines for failing to maintain operations before it acquired Uber.

When Grab bought Uber’s Southeast Asia operations, the PCC warned of a “virtual monopoly” of the industry. The commission launched its own review of the acquisition deal between the two companies, which led to PCC imposing interim measures.

Following the review, the PCC slapped Grab with a fine of P12 million ($222,586) and Uber with P4 million ($74,195) for causing “undue difficulties” to the review. (READ: Months after Uber left, where are the new ride-hailing firms?)

“While we’re reviewing [the deal], you revert first to your pre-merger situation. Why? Two things: Don’t prejudice our ability to impose remedies. It also prejudiced our ability to make an assessment of the situation,” PCC Commissioner Stella Luz Quimbo said.

“If you want to exit the market, you can sell of course. But don’t do it right away. In this situation, when Grab purchased Uber, Uber already exited. We would have a more difficult time imposing the possible solution. That’s why we said come back first,” Quimbo added.

On April, the PCC released interim measures while they were reviewing the Grab-Uber deal. Quimbo said that the ride-hailing companies violated two measures, for a total of 10 counts.

Under the law, PCC can impose penalties of, at most, P2 million ($37,097) per violation, which led to the P16-million total. The PCC left it to both firms on how they will settle the penalty.

The order, which was sent to Grab on October 11, can still be appealed. The ride-hailing firm must submit a motion for reconsideration 15 days since receipt.

Grab Philippines public affairs head Leo Gonzales said in a statement on Wednesday, October 17, that the firm is still “studying all legal options.”

“We are currently studying all our legal options with regard to the fine imposed by the Philippine Competition Commission. We will continue to provide additional information as it becomes available,” Gonzales said.

In August, the PCC approved the Grab-Uber deal but bound Grab to commitments, as if Uber were still operating in the Philippines. It chose top UK audit firm Smith & Williamson to monitor Grab’s compliance. – Rappler.com

*$1= P53.91

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Aika Rey

Aika Rey is a business reporter for Rappler. She covered the Senate of the Philippines before fully diving into numbers and companies. Got tips? Find her on Twitter at @reyaika or shoot her an email at aika.rey@rappler.com.