KUALA LUMPUR • Malaysia's competition regulator yesterday proposed a fine of more than RM86 million (S$28 million) on ride-hailing firm Grab for violating competition law by imposing restrictive clauses on its drivers.

The Malaysia Competition Commission (MyCC) ruled that Singapore-based Grab, which has backing from Japan's SoftBank Group, had abused its dominant position in the market by preventing its drivers from promoting and providing advertising services for its rivals.

"MyCC further notes that the restrictive clauses had the effect of distorting competition in the relevant market that is premised on multi-sided platforms by creating barriers to entry and expansion for Grab's existing and future competitors," MyCC chairman Iskandar Ismail told a news conference.

MyCC also set a daily RM15,000 penalty from yesterday for as long as Grab fails to address the issues.

Mr Iskandar said Grab had 30 working days to make its representations to the commission before a final decision is arrived at.

Grab said it was surprised by the decision as it believed it was "common practice for businesses to decide upon the availability and type of third-party advertising on their respective platforms, tailored according to consumers' needs and feedback".

"We maintain our position that we have complied fully with the Competition Act 2010," a Grab spokesman told Reuters, adding that the firm would submit its written representations by Nov 27.

The regulator last year said it would monitor Grab for possible anti-competitive behaviour after its acquisition of rival Uber Technologies' South-east Asian business in March that year.

Malaysia would be the third country in the region to penalise Grab after the deal with Uber.

Last year, both firms were fined by antitrust watchdogs in Singapore and the Philippines over their merger. Singapore said the deal had driven up prices, while the Philippines criticised the firms for completing the merger too soon and for a dip in service quality.

However, Mr Iskandar said the Malaysian regulator's investigations were based on complaints against the ride-hailing firm and not due to its near monopoly of the market after the Uber deal.

Under Malaysia's Competition Act, a monopoly or dominant player in the market is not an infringement of the law, unless it abuses its position in the market.

"MyCC does not have mergers powers. We cannot unscramble the egg," Mr Iskandar said.

REUTERS