Singapore’s competition watchdog slaps Grab, Uber with US$9.5 million in fines over merger

Singapore’s antitrust watchdog on Monday said it would fine ride-hailing firms Grab and Uber a combined S$13 million (US$9.5 million) for anti-competitive behaviour as a result of their March merger, in spite of Grab’s insistence that the company did not intentionally breach competition laws.

The Competition and Consumer Commission of Singapore (CCCS) slapped Singapore-based Grab with a fine of around S$6.4 million, while Uber was penalised about S$6.6 million for violations of the competition act, according to a statement released by the watchdog. However, the companies have been spared from having to reverse the transaction.

The CCCS reiterated in a statement that Uber would not have left the Singapore market if the merger had not occurred. Prices for Grab’s services also increased after the merger, it found.

Grab, which was co-founded by chief executive Anthony Tan, acquired Uber’s Southeast Asian operations for an undisclosed sum in March this year, in return for giving Uber a 27.5 per cent stake in the Singapore-based firm. The merger effectively made Grab the dominant ride-hailing player in Singapore, with about 80 per cent market share.

“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 in a statement.

Grab’s exclusivity obligations on taxi companies, car rental partners and even some drivers also hampered smaller players from expanding in the ride-hailing market, CCCS found. Apart from financial penalties, CCCS also instructed that Grab remove any exclusivity arrangements it has with partners and maintain its pre-merger pricing algorithms and commission rates.