Has The Uber-Grab Merger Infringed Competition Laws?
According to The Competition Commission of Singapore the answer might be yes.
While we are all still reeling from the announcement that Grab and Uber were joining forces, it seemed that the business world was in their own spin. Last Friday, The Competition Commission of Singapore (CCS), announced that they have reasonable grounds to suspect that Grab's purchase of Uber's SEA operations might have infringed competition laws.
Then news will surely come as a surprise for Grab, who had previously boasted of their confidence in gaining the correct regulatory approval for the deal and presumed that The Competition Commission of Singapore would not view the merger as the issue.
One of the main reasons the board might be having issues with the deal is the fact of the size of the deal. Not only does it merge Singapore's two largest, and only, ride sharing apps, but under the terms of the deal, Grab will be acquiring Uber's food delivery service too, making them one of the largest players in the home food delivery business too.
While the commission conducts their investigation, they have asked Grab and Uber to maintain their pre-deal pricing, pricing policies and product options. They have also asked the two companies to refrain from obtaining any confidential information including regarding to customers and drivers in the interim and that drivers not be subjected to transitioning from any exclusivity causes, lock-in periods and termination fees. Or in laymans terms, putting the deal on hold.
With Grab seeing this merger as the perfect opportunity to slide into the home food market, and expand their Grab Pay business at the same time, the news will undoubtedly come as a blow to the ambitious and often avaricious, firm.