THE Philippine Competition Commission (PCC) has fined a total of P16 million on Grab Philippines and Uber for violating key provisions of the interim measures order (IMO) during the merger review period of the anti-trust authority.
The IMO was issued to the parties to maintain pre-transaction conditions in order to prevent any action that may prejudice PCC’s ability to review the merger or to impose appropriate remedies.
“The IMO is a mechanism that protects the integrity of the PCC review and adjudicatory process. It requires full compliance by both Grab and Uber and these fines reflect their deficiencies and violations. Undue difficulties generated by the parties become efficiency challenges in PCC’s review process,” said PCC Chair Arsenio M. Balisacan in a statement.
The parties were collectively fined P4 million for failure to keep their businesses separate. It also penalized both Grab and Uber for their failure to delay Uber’s assumption of a board seat in Grab during the review period.
Grab, on its own, was found liable to pay the penalty of P8 million for failure to maintain the conditions before the transaction, such as pricing policies, rider promotions, driver incentives and service quality. Uber was fined P4 million or half of Grab’s fine for the same set of violations. The commission noted that Uber had to comply with the cease and desist order by the Land Transportation Franchising and Regulatory Board set at that time.
The parties committed 10 violations referring to two out of the seven measures in the order. Each act of violation corresponds to a fine ranging between P50,000 and P2 million.
“The interim measures were meant to preserve the market conditions before Grab’s takeover of Uber. In issuing the IMO, the PCC recognizes that non-compliance with the measures would affect and prejudice the quality of the review at that time,” the PCC said.
PCC earlier asked Grab and Uber to explain why they should not be penalized for their failure to keep their businesses separate, failure to maintain independent operations at pre-transaction conditions, Grab’s access to Uber’s confidential information, Uber’s assumption of board seat in Grab, and further consummation of the transaction in Grab despite the IMO.
The commission also cited the parties’ own transition services agreement that acknowledged Grab and Uber are obliged to comply with the requirements of governmental authorities in places where they operate, including the Philippines. (PR)