ArrowArtboardCreated with Sketch.Title ChevronCrossEye IconIcon FacebookIcon LinkedinShapeCreated with Sketch.Icon Mail ContactPath LayerIcon MailMenu BurgerIcon Opinion QuotePositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter

Philippine regulator questions Grab's 'virtual monopoly'

Uber merger has resulted in surging prices and declining service, watchdog says

The Philippine Competition Commission has given Grab 10 days to respond to its statement of concerns regarding the company's takeover of Uber's Southeast Asia business. (Photo by Takaki Kashiwabara)

MANILA -- The Philippines' antitrust regulator on Monday flagged what it called Grab's "virtual monopoly" in the local ride-hailing market following its merger with Uber's Southeast Asian business and warned that its review of the deal could result in it being undone.

The Philippine Competition Commission published a statement of concerns about the merger. "Grab can unilaterally raise its prices and reduce the quality of its services, as it experiences no sufficient competitive constraint from any other market participants," the PCC said.

In March, Grab acquired Uber's Southeast Asian assets in exchange for the U.S.-based company taking a 27.5% stake in Grab's operations in the region. At the time, the PCC ordered that the ride-hailing companies suspend the deal until it had completed a review.

Uber had ceased operating in the country to comply with an order by the country's transport regulator following the expiration of its license as a transportation network.

Based on its findings, the antitrust watchdog said the merger allowed Grab to control more than 90% of the ride-hailing market and that new entrants would not constrain the Southeast Asian company's dominance of the market.

The merger has also resulted in the deterioration of services and a surge in prices, to the detriment of consumers.

"With no constraint from a potential entrant, the ability and incentive of Grab to exercise its market power to the detriment of ride-hailing passengers is even stronger," the PCC said.

The Philippines' transport regulator has accredited at least five homegrown transport companies to compete with Grab. Meanwhile Go-Jek, an Indonesian ride-hailing operator, has expressed interest in expanding in the Philippines, along with other Southeast Asian markets like Vietnam, Thailand and Singapore.

The antitrust watchdog has given Grab at least 10 days to respond before it decides whether to allow or block the deal.

The PCC said its review "will culminate in either the decision of approval or blocking of the deal."

"Commitments and remedies to address the identified anticompetitive concerns may also be considered," it said.

Jose Gerardo Alampay, a competition lawyer and policy adviser, said Grab and Uber must propose measures to alleviate the PCC's concerns about possible anti-competition practices.

"At the extreme, they can claim it's not true, or they could also admit that it is and offer concessions to mitigate. If Grab wants the transaction to push through, the ball's in their court," Alampay said.

You have {{numberReadArticles}} FREE ARTICLE{{numberReadArticles-plural}} left this month

Subscribe to get unlimited access to all articles.

Get unlimited access
NAR site on phone, device, tablet

{{sentenceStarter}} {{numberReadArticles}} free article{{numberReadArticles-plural}} this month

Stay ahead with our exclusives on Asia; the most dynamic market in the world.

Benefit from in-depth journalism from trusted experts within Asia itself.

Try 3 months for $9

Offer ends September 30th

Your trial period has expired

You need a subscription to...

See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

See all offers
NAR on print phone, device, and tablet media