Trade Ministry begins investigation into Grab-Uber merger

The Vietnam Competition Authority (VCA) under the Ministry of Industry and Trade issued a decision on May 18 on its official probe into ride-hailing company Grab’s takeover of Uber Technologies’ Southeast Asia business.

Illustrative image (Source: VNA)

Illustrative image (Source: VNA)

It said the investigation will take 180 days and could be extended by up to 120 days.

The VCA said earlier this week its initial 30-day probe suggested Grab’s acquisition of Uber could have violated the Competition Law. The preliminary investigation focused on contents of the investigated parties, relevant markets, concentrated market shares and signs of violations.

Uber and Grab announced a deal in March under which Uber would take a 27.5 percent stake in Grab in exchange for its Southeast Asian business.

The VCA sent a dispatch to Grab requesting information and documents related to the acquisition.

However, Grab claimed that since the combined market share of both Grab and Uber in Vietnam was less than 30 percent, it did not have to inform the competition authority before proceeding and completing this transaction in Vietnam.

The VCA then held a working session with Grab’s legal representative on April 6, but the firm failed to provide evidence proving its claim.

Grab is one of the most frequently used O2O (online-to-offline) mobile platforms across 195 cities in Southeast Asia. More than five million people use the combined platform daily.

According to the ministry, if the concentrated market share of parties accounts for 30 to 50 percent in the market without announcement to VCA before their acquisition, the firms will be fined 10 percent of their total revenue in the previous financial year. If the rate is more than 50 percent, the transaction will be prohibited from being completed.

Vietnam is not the only country where Grab is currently under fire. Malaysia, the Philippines and Singapore are also requesting details of the acquisition.

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