Ride-hailing firm Uber will have to pay a $6.58 million penalty after its appeal against a 2018 decision that it had breached competition laws here was dismissed.
An appeal board chaired by senior counsel Andre Yeap upheld the fine and other measures imposed by the Competition and Consumer Commission of Singapore (CCCS), which had found that Grab and Uber's merger in March 2018 was anti-competitive.
The board, which issued its decision on Dec 29, also ordered Uber to pay CCCS' costs for the appeal. In its decision published yesterday, it said it was persuaded that Grab and Uber must have been aware that the merger would have restricted competition.
Uber had sold its Southeast-Asian business to Grab for a 27.5 per cent stake in Grab. Before then, the firms had a combined market share here that was more than five times the next biggest player, ComfortDelGro, and the deal would have crossed thresholds indicating potential competition concerns, the board said.
Uber had sought to set aside the CCCS's 2018 verdict or reduce the penalty imposed.
After a six-month investigation, the commission had ruled in September 2018 that the Grab-Uber deal reduced market competition and resulted in Grab getting an 80 per cent share of Singapore's ride-hailing market, up from 50 per cent previously.
Noting then that it was too late to unwind the deal, the commission spelt out a series of measures to cushion the impact on commuters, drivers and potential competitors.
This included requiring Grab to remove exclusivity arrangements with taxi fleets and drivers, as well as maintain its pre-merger pricing algorithm and driver commission rates. Grab did not appeal and paid a $6.4 million fine.
But Uber fought the verdict as "a matter of principle". In its submissions, the firm argued that it did not flout anti-competition laws intentionally or negligently, nor did the merger lead to a substantial lessening of competition, especially in the light of Gojek's entry into the market later that year.
But the appeal board agreed with the CCCS, noting that without the measures imposed, the Grab-Uber deal would have allowed Grab to request Uber not to sell its car rental arm Lion City Rentals to another party. Grab would also have had the ability and incentive to reinforce its position by entering into exclusivity arrangements.
It said Gojek's entry was not of sufficient scope to constrain Grab, noting Grab had deeper pockets and would have been able to invest more heavily to maintain its competitive advantage post-merger, posing a significant barrier to entry.
It pointed to internal papers and estimates from Uber and Grab indicating they had expected the deal to increase Grab's ability to raise prices. This happened in the wake of the merger and even after Gojek's entry. There had also been a significant cut in promotions and incentives, and post-merger data did not show Gojek's entry restored competition to pre-merger levels.
CCCS chief executive Sia Aik Kor said the board's decision reinforced the message that mergers which substantially lessen competition in Singapore are prohibited.
She said: "Singapore's voluntary notification merger regime aims to strike a balance between safeguarding competition and being pro-business... Should CCCS have reasonable grounds to suspect that an anti-competitive merger has been completed or is anticipated, it is empowered to investigate and take appropriate enforcement action."
Uber has until Jan 26 to appeal to the High Court on specific points of law or the amount it needs to pay.