Grab’s Uber takeover violated Vietnam’s competition law

By Hoai Thu December 12, 2018 | 07:12 pm PT

Grab’s acquisition of Uber showed signs of violation of competition law, said Minítry of Industry and Trade. Photo by Reuters

The Trade and Industry Ministry says its investigation has found evidence that Grab’s acquisition of competitor Uber violated Vietnam’s Competition Law.

The investigation, carried out by the ministry’s competition and consumer protection department, found that the two ride-hailing firms had failed to report their merger to competition authorities as needed.

They merger they carried out was also not allowed by Vietnamese law, the ministry said Wednesday.

The 2004 Competition Law requires any merger or acquisition that results in a company gaining a 30 percent market share to be reported to competition authorities.

If a company gains a 50 percent market share from the deal, it can only be implemented with express permission from the authorities.

The department’s preliminary investigation has found Grab’s market share in Vietnam exceeded 50 percent since Uber quit the market last April.

But Grab claimed that since its combined market share with Uber in Vietnam was less than 30 percent, it did not have to "inform the competition authority before proceeding and completing this transaction in the country."

The merits of the case will now be decided by a panel constituted by the chair of the Competition Council.

Within 30 days of the filing of documents, the panel will make one of the following decisions: return the documents for further investigation (within 60 days), dismiss the case, or begin a hearing.

Singapore-based Grab acquired Uber in Southeast Asia in return for a 27.5 percent stake in the US company, with Uber CEO Dara Khosrowshahi joining Grab’s board.

The Philippines’s competition watchdog fined both ride-hailing in October, saying they had completed their merger too soon and that the quality of service had dipped. The regulator said it was left with no choice but to fine them a cumulative 16 million pesos ($296,873).

The Filipino watchdog was the second regulator in the region to penalize Grab and Uber.

In September, Singapore's competition authority fined both firms a total of S$13 million ($9.5 million) and announced other measures to address competition concerns arising from the merger.