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Saturday, September 21, 2019

Antitrust body halts Grab-Uber merger

THE Philippine Competition Commission (PCC) on Saturday, April 7, said it has ordered Uber to continue providing ride-sharing services until a motu propio review of its merger with Grab is completed.

This effectively halted the merger of Grab and Uber operations in the Philippines.

Uber earlier told its users that it was going to transition its services over to the Grab platform by Sunday, April 8.

“All requests after that date should be made from the Grab app,” Uber had said in its advisory.

The PCC, however, opened a motu propio review of the merger on April 3, after both parties failed to inform the antitrust body about the transaction.

The commission said a preliminary assessment indicated that the merger would adversely affect the riding public and partner drivers.

Grab Holdings Inc. and MyTaxi.PH Inc. are acquiring the assets of Uber B.V. and Uber Systems Inc. in the Philippines as well as in Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand and Vietnam.

Representatives of Grab and Uber met with the antitrust commission on Monday, April 2, and claimed that their transaction is not covered by the compulsory notification requirements under Section 17 of the Philippine Competition Act.

In its order issued on April 6, the antitrust commission issued seven interim measures “to protect competition in a looming monopoly and ensure the welfare of the riding public and the drivers” while the transaction is under review.

Read: Excerpt from Commission Order No. M-2018-001

Firstly, the commission ordered Grab and Uber to maintain the independence of their business operations and other conditions prevailing prior to March 25, 2018, the date of the Bill of Sale between Grab and Uber.

Covered by this order to maintain independence are the following: ride hailing and delivery platforms; pricing and payment policies including incentives and promotions to riders; product options; customer and rider database; and on-boarding of new partner drivers as well as the fees, charges, and incentives to partner drivers, among other measures.

Grab and Uber were also ordered to:

a. Refrain from providing access to or from allowing a party to obtain from the other party any confidential information, including but not limited to information pertaining to pricing, formulas, incentives, operations, marketing and sales policies, promotions, partner drivers, and customers;

b. Refrain from imposing exclusivity clauses, lock-in periods and/or termination fees to Uber drivers and employees seeking to voluntarily join Grab’s platform;

c. Refrain from performing any act that may lead to reduced viability and saleability of Respondents’ businesses;

d. Refrain from performing any act that will prejudice the PCC’s power to review the transaction and impose remedies;

e. Refrain from executing, or further executing, any final agreement or contract that will transfer any asset, equity, interest, including the assumption by Uber of a board seat in Grab, or property of any form and kind, to the other party, pursuant to the acquisition announced by Respondents to the Public on 25 March 2018; and

f. Refrain from performing any act that may lead and/or further lead to the consummation of the Transaction.

Under the Philippine Competition Act, the commission has the power to review mergers and acquisitions that have a direct effect on trade, industry or commerce in the Philippines.

Only upon the commission's approval can a merger be implemented or consummated. (Marites Villamor-Ilano/SunStar Philippines)

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