Anti-trust body sees 'virtual monopoly' in Grab-Uber merger

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Metro Manila (CNN Philippines, April 3) The Philippine Competition Commission (PCC) said it will closely review the merger between Grab and Uber as it is "likely to have a far-reaching impact" on the riding public.

"PCC recognizes that the exit of Uber in the Philippines will put its rival Grab in virtual monopoly in the ride-sharing market until the new players come into operation," the anti-trust body said in a statement Tuesday.

The PCC said it will monitor the deal for competition concerns as a notified transaction or by opening a motu proprio case allowing the body to probe the deal without notifying the two parties.

READ: No Grab monopoly: 3 ride-hailing companies applying for accreditation

"A merger or acquisition review using competition lens will determine whether the merger of two players in the ride-sharing market will substantially lessen competition," PCC Chairperson Arsenio Balisacan said. 

The PCC is set to analyze the effect of the merger in prices, passengers, and the likelihood of other new transport network companies fairly competing against the Grab-Uber acquisition.

READ: Looming fare surges, monopoly, data privacy issues hound Grab-Uber deal

The anti-trust body was set to meet with Grab and Uber representatives on April 2 to check if their transaction will meet the requirements of a notifiable transaction.

"The consultation is taken as a sign of the parties' willingness to comply with the provisions of the Philippine Competition Act, including ensuring real competition among ride-hailing options and promoting the welfare of the riding public," it said.

The threshold for transactions, which require formal notification, is at ₱5 billion for the size of person, and ₱2 billion for the size of the transaction.

The "size of person" refers to the value of assets or revenues of the "ultimate parent entity" of at least one of the parties, while the "size of transaction" refers to the value of the assets or revenues of the acquired entity, according to the PCC.

If the transaction meets the merger-notification threshold, Grab and Uber may not push through with the merger without PCC approval. But if it does not, the PCC urged both companies to allow voluntary review.

If anti-competitive concerns appear during the review, both Grab Philippines and Uber may propose commitments to lessen the effect on market competition. But should they not submit voluntarily to PCC jurisdiction, the Philippine Competition Act grants the body to open a case that may disentangle or block the deal. 

The PCC is mandated under the Philippine Competition Act to review mergers, acquisitions and joint ventures of firms across all sectors.

"PCC is committed to ensure that Grab's acquisition of Uber in the Philippines will not harm the interest of the riding public," the body said.

Uber is set to transition services over to Grab on April 8, following the sale of its business to its local rival in March.