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Uber's sale to rival Grab may violate competition laws

1 Apr 2018

 

Uber's sale of it's Southeast Asia business to rival Grab is now under scrutiny from regulators in Singapore who say the deal may violate competition laws.

A deal was announced last week detailing the sale which would see Uber acquire 27.5 percent of the Grab business as part of the agreement. Grab's Southeast Asia business is said to be worth over £4 billion.

The plans over the next couple of weeks is to migrate drivers and passengers over to Grab's platform and also merge the food delivery service UberEats into its nascent food delivery service.

The Competition Commission of Singapore (CCS) are now looking into the deal, raising concerns that prices may now rise because there are no longer two companies competing head-to-head. The CCS feels it has "reasonable grounds" to suspect that the deal may fall foul of section 54 of Singapore's Competition Act.
 

According to a report in TechCrunch, the CCS has proposed an Interim Measures Directions (IMD) that requires Grab and Uber to maintain the pricing of their services "pre-transaction" of the purchase/sale deal. Grab have also been directed to not take any confidential information from Uber nor lock Uber drivers into having to drive for them.

Grab has said that they have already committed to freezing its pricing and would work with the CCS and other authorities over the deal as required. The CCS has the the power to "unwind" or "modify" a deal if it sees that its completion will substantially weaken competition.

Singapore is where Grab's headquarters is based and where the business is registered. It is the first country where a competitive agency is looking over the deal.  

 

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