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SINGAPORE: The Singapore antitrust body has proposed fines to the Grab and Uber road transport companies, finding provisionally that their merger had reduced competition and suggested remedies such as the sale of their trading activities. car rental.
The Singapore Competition and Consumer Commission (CCCS) also warned that it may require that companies decide on the merger as the remedies are successful, but that an inversion might not be feasible, citing exit from the market after the transaction. .
Uber sold its Southeast Asian business to its largest regional rival Grab in March in exchange for a stake in the Singapore-based firm, following similar deals by the US firm in China and in Russia.
But the agreement invited regulatory control in the region, with the CCCS, to a rare extent, launching an investigation a few days after the announcement of the transaction.
The commission stated in a statement on July 5 that it was proposing fines because Uber and Grab had carried out the transaction despite anticipating potential competition problems, leading to less competition in the sector. in Singapore.
This is the first time the commission has imposed fines on a merger transaction. The CCCS has stated that it will review company representations before finalizing the actual amount of fines.
Uber directed requests to Grab.
Grab said in a statement that she disagreed with the conclusion of the regulator, which she said seemed to be based on a narrow definition of competition. "We will take all appropriate measures to appeal this decision," he said.
The CCCS proposed corrective measures such as the removal of exclusivity obligations imposed on drivers who use Grab's trucking platform as well as its exclusive arrangements with taxi fleets. He also proposed that Grab maintain its pre-transaction pricing algorithm and driver commission rates until competition is re-established on the market.
He said that he could ask Uber to sell his Lion City Rentals car rental unit to any potential competitor who makes a reasonable offer and to prevent his sale to Grab without the l '. authorization of the authority. CCCS also stated that the remedies could include a sale by Grab of its leasing unit.
Public Consultation
The CCCS invited the public to comment on the proposed corrective measures.
She said that she could require parties to settle the transaction, unless the return of information confirms that the proposed corrective action, or other corrective action, is sufficient. to resolve competition concerns and that they are applicable in practice.
During its public consultation, the commission noted that a settlement, including a reversal of Grab's ownership interest in Uber and the transfer of assets from Uber to Grab, could not not be possible since the output of Uber might not be canceled.
"I do not think that the denouement (in a traditional sense) will occur, because I just do not see a practical way to do it," said Walter Theseira, professor of economics at the # 39; Social University of Singapore. Sciences.
He cited difficulties in separating drivers and customers from Grab and Uber, as well as dividing Singapore geographically.
Experts have already said that there was little that the authorities could do to prevent Uber from simply leaving the area.
According to some analysts, the outcome could take different forms.
"This should not be a total settlement, but it could be a detente in the sense that Grab will now sell some of its activities to another transport service provider," he said. said Gerald Singham, associate managing partner of the law firm Dentons Rodyk.
The CCCS stated that the companies entered into the agreement and started the transfer of assets acquired immediately, despite their own opinion that the result would be irreversible, making it virtually impossible to restore the status quo before the merger
His investigations also revealed that the parties had even provided for a mechanism to eventually allocate antitrust financial penalties.
Grab was the only a dominant player on the Singapore market even before the merger of Uber, and competes with taxi companies such as ComfortDelGro Corp Ltd.
. New players, such as Jugnoo in India and Ryde in Singapore, have recently entered the city-state wrinkle market. Go-Jek, the dominant player of Indonesia, also announced that he would launch services in Singapore. – Reuters
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