In yet another speed-breaker for Grab, Vietnam’s antitrust regulator has said that the Singapore-based ride-hailing major appears to have a monopoly in the country following its acquisition of Uber’s Southeast Asia operations in March.
The Competition and Consumer Protection Department (CCPD) has stated that Grab’s market share in Vietnam, after the deal, is over 50 per cent, in violation of the economic concentration prescribed by Law on Competition 2004.
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. If the market share is over 50 per cent, the transaction could also be banned.
The CCPD is now considering a formal investigation by the Vietnam Competition Authority.
Grab Vietnam had earlier 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 had claimed that the combined market share of Grab and Uber in Vietnam market was 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.
It, therefore, 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.
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.