Singapore: Issued CCCS ruling on Uber's acquisition of a 27.5 per cent stake in Grab

On 24 September 2018, the Competition and Consumer Commission of Singapore (CCCS) issued a ruling on 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 had been infringed. The investigation concluded that the transaction had infringed section 54 of the Competition Act 2004 by substantially lessening competition in the ride-hailing platform market in Singapore between Grab and Uber, each other's closest competitors. The merger would have led to increased 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 innovation in its product offering. With their exit following the merger with Grab, which holds 80% of the market shares, 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. Lastly, the CCCS imposed financial penalties on Grab and Uber amounting to SGD 6'419'647 and SGD 6'582'055, respectively, for carrying out the transaction despite anticipated competition concerns.