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Vietnam ministry concludes Grab’s Uber acquisition infringes competition law
Nguyen Tung 21:37, 2018/12/12
Two major violations of the deal include the failure to notify an economic concentration and participating in prohibited case of economic concentration.
The Vietnam Competition Authority (VCA) under the Ministry of Industry and Trade has said in a statement that ride-hailing firm Grab’s acquisition of Uber’s Southeast Asia operation, including Vietnam’s market, has infringed competition law. 
 
Illustrative photo.
Illustrative photo.
In the statement, VCA listed two major violations of the deal, including the failure to notify an economic concentration and participating in a prohibited case of economic concentration. 

The case would be referred to the Vietnam Competition Council (VCC) for further handling in accordance with the law on competition. 

According to the law, the VCC would establish a panel to work on the case. Within 30 working days, the panel would decide whether to return the case dossier for further investigation in maximum 60 days; to suspend or proceed with the case. 

Grab on March 26 confirmed its acquisition of Uber's Southeast Asia operation for an undisclosed sum, raising concern over its alleged monopoly status in the region's ride-hailing market. 

On March 27, the VCA requested Grab to report over the deal, with a view to determine whether the deal is in conformity with the Law on Competition. 

According to the law, if an enterprise participating in the economic concentration, in this case, an acquisition of another enterprise in the market, has a combined share in the relevant market from 30 - 50%, the legal representative of such an enterprise must notify the administrative body for competition before carrying out the economic concentration. 

Failure to do so may result in imposing a fine of up to 10% of total turnover of the organization or individual in breach in the financial year preceding the year in which the prohibited practice took place. 

If the combined market share in the relevant market of more than 50%, the deal may even be prohibited. 

On May 16, VCA’s preliminary investigation result showed that the combined market share from economic concentration between Grab and Uber in Vietnam is over 50%. 

On September 24, Singapore's competition watchdog Competition and Consumer Commission of Singapore (CCCS) fined Grab and Uber a combined US$13 million for their merger in March, in which Grab was fined about US$6.4 million and Uber US$6.58 million.

The CCCS noted that despite its proposal that Grab maintain its pre-acquisition pricing and driver commissions, effective fares for commuters had risen between 10 and 15% after the deal.

The commission also stated that Grab has an 80% share of the ride-hailing market, and the market share of other smaller players which emerged after Uber's exit remained "insignificant".

It added that exclusivity deals between Grab, taxi companies, car rental firms and drivers hampered the ability of these potential competitors to expand.
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