Vietnam questions possible Grab monopoly in wake of Uber takeover

By Nguyen Hoai   April 9, 2018 | 04:43 pm GMT+7
Vietnam questions possible Grab monopoly in wake of Uber takeover
Grab motorbike taxi drivers wait for customers in downtown Hanoi on July 12, 2017. Photo by AFP

The company could face a hefty fine for breaking the competition law.

Grab has not provided adequate evidence to prove that it hasn't formed a monopoly in Vietnam, according local authorities.

The company submitted a letter to the Ministry of Industry and Trade on April 5 to explain its acquisition of rival Uber's operations in Vietnam as requested by the Ministry’s Competition and Consumer Protection Department (CCPD).

In the letter, Grab claims that its combined market share with Uber in Vietnam is less than 30 percent, so it does not have to “inform to the competition authority before proceeding and completing this transaction in Vietnam."

This response has not satisfied the CCPD, which has been looking into the combined market share of Grab and Uber to ensure compliance with regulations on market concentration.

The CCPD has notified Grab of Vietnam’s Competition Law, which states that a company that acquires a combined market share of between 30 percent and 50 percent without informing the competition authority will be fined 10 percent of its preceding fiscal year’s total revenue.

The transaction may even be prohibited should the market share exceed 50 percent, the law says.

There is a chance Grab will be punished after authorities have fully considered the company’s report on the Uber deal, said Do Thang Hai, deputy minister of industry and trade in a previous interview with VnExpress.

“Vietnamese drivers and consumers’ interests will be guaranteed under the competition law," said Hai.

Grab is also facing scrutiny in other Asian countries such as Malaysia, the Philippines and Singapore, which have all requested a detailed explanation of its acquisition of Uber.

Vietnamese taxi firms have suggested uniting against Grab to stop the company forming a monopoly in the country's transport market.

Grab was last valued at $6 billion.

 
 
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