Didi-Uber merger eyed by watch­dog

China Daily (USA) - - BUSINESS - By MENGJING mengjing@chi­nadaily.com.cn

The­megamerger be­tween the top two ride-hail­ing ser­vice providers in­China came into fo­cus onWed­nes­day af­ter the coun­try’s an­titrust watch­dog said it had a right to in­ves­ti­gate the deal.

The Min­istry of Com­merce said at a news con­fer­ence in Bei­jing that it was en­ti­tled to in­ves­ti­gate whether the merger deal be­tween Didi Chux­ing and the China unit of the US-head­quar­tered Uber Tech­nolo­gies Inc sug­gested a po­ten­tial mo­nop­oly.

“Based on the reg­u­la­tions in China, busi­ness oper­a­tors need to file an ap­pli­ca­tion on their merger deal if their rev­enues reach a cer­tain amount,” said Shen Danyang, spokesman for the min­istry.

He did not say whether the au­thor­i­ties would mount an in­ves­ti­ga­tion, nor men­tion when a de­ci­sion would be made.

Shen said that even if com­pa­nies’ rev­enues didn’t reach the thresh­old, the min­istry was still en­ti­tled to con­duct a probe if there was ev­i­dence suggest­ing a po­ten­tial mo­nop­oly.

The spokesman added that the min­istry had not re­ceived an ap­pli­ca­tion from Didi or Uber on their merger deal.

The state­ment is the gov­ern­ment’s lat­est re­sponse to the deal be­tween Didi and Uber.

Didi an­nounced at the be­gin­ning of Au­gust its de­ci­sion to ac­quire Uber’s China op­er­a­tions, creat­ing a rideshar­ing ti­tan es­ti­mated to take about 90 per­cent of the mar­ket.

Ac­cord­ing to an­titrust reg­u­la­tions in China, com­pa­nies that plan to merge need to file an ap­pli­ca­tion to the au­thor­i­ties if their com­bined rev­enue ex­ceeded 2 bil­lion yuan ($302 mil­lion) in the pre­vi­ous year.

Didi was not avail­able to com­ment on Wed­nes­day. But in early Au­gust, the Bei­jing-based com­pany said in a state­ment that “nei­ther Didi nor Uber China reached the rev­enue thresh­old to file the ap­pli­ca­tion”.

How­ever, Dong Yizhi, a lawyer at Liaon­ing Yatai Law Firm in Dalian, Liaon­ing prov­ince, said that it was the gov­ern­ment’s right to step up and launch an in­ves­ti­ga­tion even if the rev­enue of Didi and UberChina was not high enough to file an ap­pli­ca­tion.

Dong said that what was of in­ter­est was that the two com­pa­nies were in­ter­net sec­tor re­lated.

mar­ket share of Didi and Uber in China af­ter their merger

Zhong Nan con­trib­uted to this story.

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