It has been over a year since Southeast Asian unicorn Grab announced the acquisition of Uber’s Southeast Asia operations. However, in Vietnam, two government agencies continue to disagree over whether Grab’s takeover of Uber’s Vietnam operations flouted the country’s competition laws.
In the latest development in this saga, the Vietnam Competition Authority (VCA) has appealed a June 17 ruling by the Vietnam Competition Council (VCC) that said the Grab-Uber deal did not violate local antitrust laws.
VCC had ruled that the Grab-Uber transaction was kosher as it did not involve the acquisition of equity shares. The council is an independent body with members appointed by the prime minister, while VCA falls under the ambit of the ministry of trade and industry.
In its appeal, VCA said the purchase included Uber’s entire operations, which led to Grab having full control over Uber’s Vietnam business.
“As a result, it is an act of prohibited economic concentration,” the antitrust body said in a statement. VCA has told the Competition Council it has 30 working days to respond to the appeal.
The competition authority had earlier noted two infringements — a “prohibited economic concentration” and a failure to inform relevant authorities about the violation. It had proposed a fine of 5 per cent of the 2017 revenue of each company for each of the violations.
Under Vietnamese regulations, a prohibited economic concentration is a merger or acquisition that creates a new entity having more than 50 per cent market share in its sector. VCA had earlier concluded after an investigation that Grab’s share of the local ride-hailing market after acquiring Uber’s operations was 44.1 per cent in Hanoi and 82.68 per cent in Ho Chi Minh City.
VCA also required Grab to maintain the same pricing algorithm and the share paid to drivers as before the Uber acquisition.
Meanwhile, DEALSTREETASIA has learnt that the Competition Council will be dismissed, and a national competition committee will be established to handle disputes, with the new competition law’s coming into force on July 1.