Uber announced in March this year that it was selling its entire Southeast Asian business to Grab, its biggest rival in the region. The deal saw Uber exit the region which made Grab the biggest ride-sharing service in Southeast Asia. There has been some concern from antitrust bodies that feel this merger will lessen competition. Singapore’s antitrust body has now said that it may have to reverse the Uber and Grab merger as it’s going to substantially lessen competition in this market.
Uber sold its business in Southeast Asia to Grab in exchange for a 27.5 percent stake in the company. This wasn’t the first time that Uber bowed out of a market. It made a similar deal in China as well and reports suggest that it may be exploring another deal in the Middle East with local rival Careem.
The Competition and Consumer Commission of Singapore launched a probe into the merger days after it was announced. It has now proposed fines on Uber and Grab because the companies carried out the transactions even though there were potential competition concerns. This is the first time that the antitrust body will impose fines on a merger transaction.
It has proposed some measures to limit the lessening of the competition which include removing exclusivity obligations for drivers and maintaining pre-transaction pricing and driver commission rates until more players emerge in the sector. Unless feedback shows that any of the proposed remedies or any other remedies have addressed these concerns, the commission says that it may force the parties to reverse the merger.