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.