CCCS Fines S$ 13 Million on Uber, Grab over Merger Deal

The Competition and Consumer Commission of Singapore (CCCS), the competition regulator of the city state, has fined US-based ride-hailing firm Uber and homegrown technology and ride-hailing company Grab a total of S$13 million (US$ 9.5 million) over their merger deal citing that the merger has resulted in considerable deterioration of competition in the ride-hailing market.

The watchdog has fined Uber S$6.58 million and Grab S$6.42 million stating that it slapped the penalties on both the firms to discourage consummated and irrevocable mergers that have an adverse effect on competition.

CCCS directed Uber to sell its vehicles from its local leasing business to any competitor that makes a sound offer. The watchdog also directed Grab to remove its exclusive arrangements with taxi fleets and drivers.

Slapping the penalties, the regulator stated that it gave consideration to the companies' turnovers, the seriousness, duration and the nature of the infringement as well as aggravating and mitigating factors.

Mergers that considerably reduce competition are forbidden and the authority has taken action against the Uber-Grab merger as it removed the local ride-hailing firm’s closest competitor, to the detriment of the city state’s riders and drivers.

In March this year, Uber Technologies sold its South East Asian business to Grab in exchange for a 27.5 percent in the regional ride-hailing company. The very next day, the regulator launched a scrutiny to ascertain that whether the deal infringed anti-monopoly laws.

CCCS found that Grab hiked its prices after the merger and its trip fares, net of rider promotions, was hiked in the range of 10 to 15 percent following the merger deal.

Furthermore, the regulator stated that it received several complaints from both drivers and riders on Grab’s commissions and fares.

On September 24, the CCCS announced that it had finalized various measures to reduce the impact of the deal on riders and drivers as well as open up the market for new entrants.

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