Singapore’s competition regulator has fined Grab and Uber a total of S$13 million (RM39 million) over their merger in Southeast Asia. The body claims that the deal has led to a deterioration of competition in Singapore’s ride-hailing market.

The Competition and Consumer Commission of Singapore (CCCS) fined Uber S$6.58 million (RM19.9 million) and Grab S$6.42 million (RM19.4 million). It notes that it imposed the penalties to “deter completed, irreversible mergers that harm competition”.

Back in March, US-based Uber agreed to sell its Southeast Asian operations to rival Grab in exchange for a 27.5 per cent stake. The deal involved handing over its operations in Singapore, as well as those in Malaysia, Indonesia, Cambodia, Myanmar, Philippines, Thailand, and Vietnam. The CCS launched an investigation soon after.

Some of the factors taken into account by the CCCS include an increase in Grab’s prices after Uber’s disappearance. It found that trip fares and net of rider promotions increased by 10 to 15 per cent after the acquisition. Besides that, complaints from riders and drivers on Grab’s fares and commissions.

Most glaring is the 80 per cent market share held by Grab within the industry, making it a strong deterrence to new businesses.

Since the fine, the CCCS has also ordered Grab to maintain its pre-merger pricing algorithm and driver commission rates.

Uber claims that the CCCS’ decision was based on an “inappropriately narrow definition of the market”. It argues that the CCCS incorrectly described the dynamic nature of the industry. The company is considering appealing.

Meanwhile, Grab maintains that its transaction was within legal rights, and it broke no competition laws. However, it has agreed to abide by the orders sent out by the CCCS.

(Source: Channel NewsAsia)