Vietnam’s antitrust regulator has ordered Grab Vietnam to prove it hasn’t formed a monopoly in the country after the Singapore-headquartered ride-hailing major acquired Uber’s Southeast Asia operations last month.
Grab Vietnam has submitted a letter to the Competition and Consumer Protection Department (CCPD) to explain its acquisition of rival Uber’s operations in Vietnam.
In the letter, Grab claimed that the combined market share of Grab and Uber in Vietnam market is lower than 30 per cent. It, therefore, “does not have to inform the competition authority before proceeding and completing transactions in Vietnam.”
This response, however, has not satisfied the CCPD. The authority indicated that Grab has not provided adequate evidence to prove that it hasn’t formed a monopoly in Vietnam. “The CCPD has asked Grab Vietnam to provide evidence and evaluate the combined market share of Grab and Uber in the market to ensure the rules of competition before proceeding,” said a representative of CCPD.
According to the authority, a company that acquires a combined market share of between 30 per cent and 50 per cent without informing the competition authority will be fined 10 per cent of its preceding fiscal year’s total revenue.
In addition, Grab may be obligated to pay the VND53.3 billion ($2.33 million) tax arrears that Uber has delayed paying to the Ho Chi Minh City Department of Taxation, Dang Duy Khanh, Deputy Head of the Inspection Department, told local media.
“We need to review the terms of the purchase contract between Uber and Grab. If the two parties agreed that Grab will shoulder Uber’s tax obligations, Grab will have to pay the VND53.3 billion ($2.33 million) to the tax department,” he said.
Grab Vietnam, however, said that it does not have any obligation to pay Uber’s taxes. Grab has only acquired Uber’s Southeast Asia business, not its legal entities, it reasoned.
The Grab-Uber deal is currently facing challenges in other countries such as the Philippines and Singapore.
The Philippine Competition Commission (PCC), the country’s antitrust watchdog, launched a review of Grab‘s takeover of its main rival Uber in the country even as Grab has reportedly claimed that the deal does not need the PCC’s approval.
Meanwhile, the Competition Commission of Singapore (CCS) said it has reasonable grounds to suspect that Grab’s acquisition of rival Uber’s Southeast Asia operations could infringe competition laws.
In March, Singapore’s ride-hailing major Grab on Monday announced that it has acquired Uber’s Southeast Asia operations, including ride-sharing and food delivery businesses, in the region. Under the terms of the deal, Uber will acquire a 27.5 per cent stake in Grab and Uber CEO Dara Khosrowshahi will join the board of the Singapore-based firm.
Uber officially stopped its operations in Vietnam on April 8.