Singapore: Issued Proposed Infringement Decision by CCCS on Uber's acquisition of a 27.5 per cent stake in Grab

On 5 July 2018, the Competition and Consumer Commission of Singapore (CCCS) issued a proposed infringement decision in the investigation into Uber's acquisition of a 27.5 per cent stake in Grab Holdings Inc. (Grab). The investigation was initiated as there were reasonable grounds for suspecting that section 54 of the Competition Act 2004 has been infringed. The investigation came to the conclusion that the transaction has removed competition between Grab and Uber, each other's closest competitors. The merger is likely to increase prices, which was observable since the completion of the transaction. Grab would be able to raise fares for riders and commission rates for drivers, lower the quality of its services and reduce innovating its product offering. The investigation found that without the transaction, Uber would not have left the Singapore market. With their exit following the merger with Grab, the network effects would impose significant financial burdens on new entrants wishing to compete in the market. As a result of these constraints on competition, the CCCS proposed remedies to the merger, including a removal of exclusivity obligations, lock-in periods and/or termination fees on all drivers, a removal of Grab’s exclusivity arrangements with any taxi/CPHC fleet in Singapore, maintenance of Grab’s pre-Transaction pricing algorithm and driver commission rates, and a requirement for Uber to sell Lion City Rentals, a car rental service, to potential competitors. The CCCS also opened a public consultation on these remedies. Lastly, the CCCS proposed to impose financial penalties on Grab and Uber for carrying out the transaction despite anticipated competition concerns.