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Grab facing RM87mil fine

Oct 04. 2019
No free ride: MyCC is also proposing for the Competition Act to be amended to include merger powers.
No free ride: MyCC is also proposing for the Competition Act to be amended to include merger powers.
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The Star Online

KUALA LUMPUR: E-hailing company Grab has been slapped with a proposed fine of RM86.7mil for violating Malaysia’s competition laws.

The Malaysia Competition Commission (MyCC) said it issued the proposed fine against Grab Inc, GrabCar Sdn Bhd and MyTeksi Sdn Bhd (Grab) for collectively breaching Section 10 of the Competition Act 2010.

MyCC chief executive officer Iskandar Ismail said Grab abused its dominant position by imposing a number of restrictive clauses on its drivers that prevented them from promoting and providing advertising services for Grab’s competitors in the e-hailing and transit media advertising market.

“MyCC further notes that the restrictive clauses had the effect of distorting competition in the relevant market that is premised on multi-sided platforms by creating barriers to entry and expansion for Grab’s existing and future competitors.

“The fine is merely a proposal and not final,” said Iskandar yesterday.

Apart from the proposed fine, MyCC also wants to impose a daily penalty of RM15,000 per day beginning yesterday should the e-hailing company fail to take “remedial action” as directed by the commission.

Iskandar said Grab would have 30 working days to present its case to the commission before a final decision was made.

“Grab will have the opportunity to present its defence and then we will decide if there are infringements or not,” he said.

Last year, MyCC said it would monitor Grab for possible anti-competitive behaviour following its acquisition of Uber Technologies Inc’s South-East Asian business in March 2018.

Iskandar said since the merger, MyCC received numerous complaints against Grab and started its investigations based on them.

He also said the investigations were not due to the e-hailing company’s near monopoly of the market after Grab acquired Uber.

This is because the Competition Act states that being a monopoly or a dominant player in the market is not an infringement of the law.

Action can only be taken under the Act against a monopoly or dominant company that abuses its position in the market.

“You have to understand that in Malaysia, the MyCC has no merger powers like Singapore or the Philippines.

“What we can do is to look in the perspective of post merger and four days after they (Grab) did, we called them and we have been monitoring them,” he said.

Iskandar added that MyCC was also proposing for the Competition Act to be amended to include merger powers.

Malaysia would be the third country to penalise Grab after buying over Uber in the region.

Last year, both Singapore and the Philippines’ competition watchdogs also fined both Grab and Uber.

Uber’s deal to take a 27.5% stake in Grab in exchange had earlier raised a red flag with Singapore’s competition watchdog, which last September fined both Grab and Uber a total of S$13mil (RM39.4mil) and imposed other measures to address competition concerns.

The Philippines also fined both companies 16mil pesos (RM1.3mil) last October, saying they had violated the conditions set by its competition regulator.

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