Competition body fines Grab, Uber P16 million

THE PHILIPPINE COMPETITION COMMISSION (PCC) has imposed fines totaling P16 million on Grab Philippines (MyTaxi.PH, Inc.) and Uber Philippines for violations of interim measures ordered on April 6 as the watchdog reviewed the companies’ March 25 acquisition deal.

“Last Thursday, Oct. 11, PCC imposed a fine on Grab and Uber amounting to P16 million. This is for violating the interim measures order that PCC issued last 6th April,” PCC Commissioner Stella Luz A. Quimbo said in a press briefing on Wednesday. “The interim measures order contained a total of seven interim measures and PCC found violations in two of these measures. And for these two measures, we found a total of 10 counts of violations.”

The measures bound the firms to maintain separate business operations and to refrain from executing final agreements that would transfer assets, equity and interest — including Uber’s assumption of a board seat in Grab — during the review period.

Both companies were collectively fined P4 million for proceeding with the merger during the PCC’s review period. An additional P8 million was imposed on Grab for failure to maintain pre-merger business conditions (pricing, rider promotions, driver incentives and service quality) during the review and P4 million on Uber for the same violations.

“These fines are not for finding of a substantial lessening of competition, but rather the fines are imposed for causing undue difficulties on the PCC review and decision making process,” Ms. Quimbo explained.

Grab gained 93% of the ridehailing market in the Philippines after the deal and Uber stopped operations in the Philippines on April 16. The PCC reviewed the deal on April 3-Aug. 10.

PCC Commissioner Johannes R. Bernabe said Uber got a smaller fine since it had to comply with

the Land Transportation Franchising and Regulatory Board’s April 11 cease-and-desist order from continuing its operations after the merger.

Grab Philippines said it was studying legal remedies to address the situation.

“We are currently studying all our legal options with regard to the fine imposed by the Philippine Competition Commission. We will continue to provide additional information as it becomes available,” it said in a statement.

Mr. Bernabe said the PCC will exhaust all legal means to compel Uber to settle the penalty.

The PCC last week appointed United Kingdom-based audit firm Smith and Williamson to monitor Grab’s compliance with voluntary commitments for 12 months.

Those commitments are meant to address competition concerns the PCC raised on May 22, including Grab’s service quality, fare transparency, pricing, removal of a “see destination” feature for drivers, driver and operator non-exclusivity, incentives monitoring and a service improvement plan.