Cab-hailing service Uber Technologies and its Singaporean counterpart Grab may face hefty fines or even a breakdown of their merger, as the deal was allegedly made without obtaining approval from anti-trust authorities. The Asian country’s regulatory watchdog, Competition and Consumer Commission of Singapore (CCCS), today claimed that neither of the companies notified them on the merger, despite clear indications that it would hurt healthy competition in the country.
This will be the first instance of CCCS slapping a fine on a merger. The authority has also sought suggestions and feedback on the same from the public.
CCCS claims that the deal has led to an increase in taxi fares, and feels it would lead to a decline in innovation in the sector. It is currently up to the authority to decide whether to stick to a fine or nullify the deal as such.
In its second-largest withdrawal from an Asian market, Uber had sold its Southeast Asia to Grab in March. In return, the US company received 27.5% stake in Grab as well as a spot for CEO Dara Khosrowshahi in Grab’s board.
The regulatory authority said, “CCCS may require the parties to unwind the transaction unless the aforesaid public consultation confirms that any of the proposed remedies, or any further remedies, are sufficient to address the identified competition concerns, and are implementable in practice.”
CCCS has come up with a few remedies to make sure competition is not hurt. These include removal of exclusivity that Grab currently holds with other taxi services, besides Uber selling its car rental unit to a Grab competitor. The companies have been given 15 days to draft their remedies and submit to the regulator.
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