Singapore’s antitrust regulator has hit Uber and Grab with fines and pro-competition measures regarding their Southeast Asian merger, which took place back in March.
The merger represented Uber’s partial retreat from the region, as it handed over the market to its biggest local rival. Under the deal, Uber got a 27.5% stake in the combined operation. But the Singaporean competition watchdog now says the deal broke antitrust laws.
Following a proposed decision in July, the Competition and Consumer Commission of Singapore (CCCS) on Monday formally hit the companies with fines totalling $9.5 million.
The regulator said that, after the merger, Grab had 80% of the ride-hailing market in Singapore, and smaller competitors were struggling to do business—particularly as Grab hit taxi companies, car-rental companies and some drivers with exclusivity agreements. It also said Grab’s effective fares went up by 10-15% after the Uber merger.
The CCCS’s solution does not merely extend to fines. It also banned Grab’s exclusivity agreements and said the company must stick to its pre-merger pricing algorithm and driver commission rates.
What’s more, the watchdog is forcing Uber to sell the cars held by Lion City Rentals, the car-rentals outfit which it continued to own after the Grab merger, to “any potential competitor who makes a reasonable offer based on fair market value,” and not to Grab, so as to stop them from “absorbing or hoarding Lion City Rentals vehicles to inhibit the access to a vehicle fleet by a new competitor.”
“Mergers that substantially lessen competition are prohibited and CCCS has taken action against the Grab-Uber merger because it removed Grab’s closest rival, to the detriment of Singapore drivers and riders. Companies can continue to innovate in this market, through means other than anti-competitive mergers,” said CCCS chief executive Toh Han Li.
Uber told Reuters that it may appeal the ruling, which it said was based on an “inappropriately narrow definition of the market.”