PCC releases interim measures pending review of Grab-Uber deal
MANILA, Philippines – The Philippine Competition Commission (PCC) on Saturday, April 7, released interim measures that seek to protect the riding public and drivers of Grab and Uber as the country’s antitrust watchdog reviews the deal of the ride-sharing services.
The PCC released excerpts of Commissioner Order No. M-2018-001 pertaining to the interim measures on Saturday, April 7, a day before Uber was to transition its operations to Grab Philippines.
"In a bid to protect competition in a looming monopoly, the PCC issued a set of Interim Measures to ensure the welfare of the riding public and the drivers while the in-depth review of the Grab-Uber deal is ongoing," the PCC said in a statement.
PCC Commissioner Stella Luz Quimbo had announced the forthcoming release of the interim measures during a public hearing on the deal on Thursday, April 5, when it was first announced that the PCC had asked Uber and Grab to continue using their own platforms beyond Sunday, April 8. (READ: PCC asks Uber, Grab to continue separate operations beyond April 8)
The PCC order, dated April 6, effectively stops Grab’s acquisition of its competitor temporarily until the PCC completes its "in-depth review" of the local implications of the sale of Uber’s Southeast Asian business to Grab.
Under the interim measures, aside from maintaining the independence of their respective operations and other conditions that prevailed prior to the deal on March 25, Uber and Grab were also directed to "refrain from providing access to or from allowing a party to obtain from the other party any confidential information, including but not limited to information pertaining to pricing, formulas, incentives, operations, marketing and sales policies, promotions, partner drivers, and customers."
The National Privacy Commission (NPC) earlier expressed concern about privacy issues that may arise from the deal, saying personal data privacy should be respected and protected in the process. (READ: No migration of personal data to Grab in Uber app shutdown – privacy commission)
The PCC also ordered the ride-hailing services to:
- Refrain from imposing exclusivity clauses, lock-in periods and/or termination fees to Uber drivers and employees seeking to voluntarily join Grab’s platform
- Refrain from performing any act that may lead to reduced viability and saleability of Respondents’ businesses
- Refrain from performing any act that will prejudice the PCC’s power to review the transaction and impose remedies
- Refrain from executing, or further executing, any final agreement or contract that will transfer any asset, equity, interest, including the assumption by Uber of a board seat in Grab, or property of any form and kind, to the other party, pursuant to the acquisition announced by Respondents to the Public on 25 March 2018
- Refrain from performing any act that may lead and/or further lead to the consummation of the transaction
Uber and Grab face a P50,000- to P2-million penalty per violation for failure or refusal to comply with the PCC's order, but this will not be immediately executory as they will be given a chance to explain their side.
Referring to the continued independent operations after April 8, the PCC said in its order, "Should the Respondents failed to comply with item (a) above within five (5) working days from service of this Order, Respondents shall show cause within twenty-four (24) hours from the end of the aforementioned five (5) day period as to why they should not be held in contempt and subjected to penalties."
The PCC also ordered Uber and Grab to submit periodic verified compliance reports with supporting documents, the first within 15 days from the service of the order, and evern 20 days after.
The PCC is mandated to protect competition in the market and prohibit anticompetitive conduct, including mergers and acquisitions of businesses and companies that may substantially prevent, restrict, or lessen competition.
In a statement, PCC chairman Arsenio Balisacan said the looming monopoly may have consequences for Filipinos who avail of the ride-sharing services.
“This move by Uber in the Philippine market leads to further substantial concentration of what is, to begin with, an already highly concentrated ride-sharing market. This virtual monopolization of the market by Grab can harm the riding public,” he said.
“The PCC believes that Uber is capable of operating its ride-hailing app in the country, despite its claims that it has already exited the Southeast Asia market," he added.
The PCC chief cited the case of Uber operations in Singapore. “Uber’s compliance with our antitrust counterpart in Singapore to extend the operation of its app indicates the feasibility of continuing its operations in the Philippines as well,” he said.
Balisacan also said that Uber does not highlight the fact that it would become a “part-owner” of Grab through the deal.
“Uber is highlighting its exit, but what it does not emphasize enough is its integration with Grab. Thus, Uber is not truly exiting the Philippine market, but rather effectively merging their operations with Grab here. The deal makes Uber a part-owner of Grab,” he said.
Uber announced on March 26 that it sold its operations in Southeast Asia to Grab. In turn, Uber will receive a 27.5% stake in the business.
The PCC has 75 days to come up with results of its motu proprio review on the Grab and Uber deal. – Rapppler.com