Volatile times..
2019 has been a big year for Grab. Not only did they acquire a big competitor, the company has been living it large ever since. Grab is now a super app, gone are the days where one would think of Grab merely to hail a ride. From sending parcels to food delivery, Grab wants to do everything for you, and thanks to the merger with Uber, the company has gone about it largely unopposed.
Now, there were eyebrows raised when Grab acquired Uber back in April, I mean come on, rather anti-competitive behaviour i’d say. Nothing really came of it though, until now that is. News has just broke that the Malaysia Competition Commission (MyCC) has proposed a fine of RM86.8mil against Grab Inc, Grab Car Sdn Bhd and MyTeksi Sdn Bhd (Grab) for collectively breaching the Competition Act 2010.
On top of that, there are also plans to impose a daily penalty of RM15,000 per day from the date of service of the proposed decision, which is.. well, today. I don’t know how healthy Grab’s account is looking but thats a pretty hefty fine.
The thing is though, none of this is actually confirmed. MyCC CEO Iskandar Ismail has maintained that the fine and subsequent daily penalties are merely a proposed decision and that nothing is final… except death!! Okay, he didn’t mention anything about death, but the fine and penalty is a possibility, and a pretty big one too.
MyCC might have a point..
It’s hard not to allege Grab of having abused its dominant position or asserting a sort of monopoly on the e-hailing and transit media advertising market. Apparently the company imposed some restrictive clauses on its drivers that prevented them from promoting and providing advertising services for Grab’s competitors.
“Grab has become very dominant in the industry. The company has also a restrictive clause that prevents their drivers to promote other e-hailing companies in their cars.
“Bear in mind, drivers only drive for Grab using their own cars and they are not Grab’s employees,”
MyCC CEO Iskandar Ismail
Bear in mind that something similar happened to Grab in Singapore last year when the Competition and Consumer Commission of Singapore (CCCS) fined Grab and Uber S$13 million. CCCS said that the fine was imposed to “deter completed, irreversible mergers that harm competition”. Sound familiar? I don’t know what you’re talking about!!!
Of course, Grab will have the chance to make a case for themselves before any decision is made. The company have already responded to the possible fine with this statement from their spokesperson:
“We maintain our position that we have complied fully with the Competition Act 2010. We are surprised by the Proposed Decision that we received this morning. Whilst our legal counsels are now studying the Proposed Decision, we believe that it is common practice for businesses to decide upon the availability and type of third-party advertising on their respective platforms, tailored according to consumers’ needs and feedback. We will be submitting our written representations to MyCC by 27 November 2019.”
Surprised it seems!! Well to be fair to Grab, even I wasn’t aware that businesses couldn’t decide upon the type of third party advertising on their respective platforms. Or can they? You see, that’s the problem with the gig economy!!! So many grey areas.
Grab has thus far managed to staved off a mass exodus of drivers (this remains to be seen, but for now numbers look healthy), so it’ll be interesting to see how they handle this massive slap in the face.
