Grab-Uber merger threatens monopoly

17:45 | 16/05/2018
By their combined market share exceeding 50 per cent, the deal between Grab and Uber violates the Competition Law.
grab uber merger threatens monopoly
VCA found that the merger would boost Grab's market share beyond 50 per cent. Photo: Techcrunch

This was part of the conclusion of the one-month investigation of Vietnam Competition Authority (VCA) under the Ministry of Industry and Trade.

During the past month, VCA organised working sessions with Uber and Grab and collected information and statistics from relevant authorities for the investigation.

After the preliminary investigation, VCA found that Grab’s market share after the deal will exceed 50 per cent, which does not comply with the Competition Law.

VCA is considering conducting an official investigation to clarify the violation and then will send the official investigation result to the Vietnam Competition Council.

Previously, in a document submitted to VCA, Grab Vietnam affirmed that after the merger Grab’s market share will remain below 30 per cent, which is not a monopoly in Vietnam. However, at the working session with the authority, Grab’s representative failed to provide evidence to support this claim.

According to the current Competition Law, if enterprises participating in an economic concentration have a combined market share of 30-50 per cent of the relevant market, their lawful representatives must notify the competition-managing agency before implementing the concentration, otherwise they will have to pay a fine of 10 per cent of the revenue from the fiscal year previous to the date the deal was completed (if the deal is completed in 2017, the fine is equal 10 per cent of the revenue of the 2016 fiscal year).

In case the combined market shares exceed 50 per cent of the relevant market, the economic concentration will be prohibited.

In late March, Grab announced that it acquired Uber’s Southeast Asian operations. Grab will integrate Uber’s ridesharing and food delivery business in the region into its existing multi-modal transportation and fintech platform.

By Kim Oanh

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