Vietnam finds no violations in Grab’s acquisition of Uber’s local business

FILE PHOTO: A view of Uber and Grab offices in Singapore March 26, 2018. REUTERS/Edgar Su/File Photo

A Vietnamese competition council has concluded that Grab’s acquisition of Uber’s Vietnam operations in 2018 did not infringe competition laws in the country.

The verdict from the local competition council came six months after the Vietnam Competition and Customer Protection Authority (VCA) found the acquisition had breached Vietnamese regulation.

Specifically, the antitrust body said in December 2018 that the deal was a prohibited consolidation and the companies had failed to notify it about the economic concentration as a result of the deal.

Under Vietnamese competition law, consolidation (merger and acquisition) that creates a new entity having more than 50 per cent market share in an identified market is forbidden.

VCA had claimed that Grab’s market share after acquiring Uber Vietnam was 44.1 per cent in Hanoi and 82.68 per cent in Ho Chi Minh City. However, the competition council ruled that the transaction was not an acquisition of equity shares, as Grab did not have voting rights in Uber after the transaction.

“The transaction included commercial considerations and did not include Uber’s technology, bank accounts, data from Uber employees as well as certain Uber’s contracts,” the council said in its decision.

“Since it is not a share acquisition that leads to Grab’s control of Uber’s equity interest, there are not enough elements, as defined by law, to constitute an economic concentration. And since the case did not constitute concentration, the council decided that identifying the relevant market and aggregated market share is not necessary,” it added.

Meanwhile, representatives from Uber Vietnam for the case explained that the firm had not operated ride-hailing and transportation services. Instead, it had only provided marketing and market research services to Uber BV, the Netherlands entity operating the Uber app.

“VCA inspected into the wrong object,” they said.

Grab has also emphasised that it operates one of several technology platforms in the country connecting drivers and users, and that customers have other transportation options besides ride-hailing apps.

Regulations have not been an easy path for ride-hailing companies across the region. Grab and Uber were fined a combined $9.5 million by the Competition and Consumer Commission of Singapore. In the Philippines, even as the deal was approved, Grab operations were subject to several conditions by the local watchdog.

Recent regulatory barriers include Vietnam asking ride-hailing cars to install light boxes and serviced car badges, Malaysia requiring drivers to obtain public service vehicle licences, Philippines Land Transportation Franchising and Regulatory Board’s regulation on licence applications, and Indonesia imposing a restriction on ride-hailing discounts.

In Vietnam, Grab was also sued by local taxi company Vinasun and was ultimately asked to pay nearly $200,000 in compensation. Grab has appealed the decision, and a final verdict is pending.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.