PCC raises potential motu propio review of Uber-Grab deal
Published Apr 2, 2018 12:00 am
By Bernie Cahiles-Magkilat
The Philippine Competition Commission, the country’s anti-trust authority, yesterday said it is closely looking into the acquisition of Uber by Grab with the view of potentially reviewing the anti-competition concerns, as a notified transaction, or by opening on their own a motu propio case to block the deal.
Citing strong likelihood of the far-reaching impact on the riding public and the transaction services, the PCC issued a statement after meeting with the representatives of the parties yesterday to determine if the transaction will meet the merger notification thresholds, and thereby verify if the Grab-Uber transaction is notifiable.
Arsenio Balisacan
“We have yet to know the terms and conditions of their agreement,” the PCC chaired by Arsenio Balisacan said.
PCC, however, said that if the Notifying Group of either Grab or Uber breaches the R5 billion threshold for the size of the party and assuming the transaction involves the acquisition of Uber assets inside and outside the PH, the applicable threshold for the size of transaction are as follows:
(i) the aggregate value of assets in the PH of Uber exceeds R2 billion; and
(ii) the aggregate gross revenues generated in or into the PH by assets acquired in the PH and assets acquired outside the PH collectively exceed R2 billion.
If the transaction is notifiable, Grab and Uber are not allowed to consummate the deal without PCC approval. If the transaction does not meet the threshold and is not notifiable, the parties are not so precluded but Grab and Uber are urged to allow a voluntary review to take its course before consummating to minimize the need to unscramble the deal if found to have anticompetition concerns.
Should anticompetitive concerns arise out of the transaction review, the parties may propose commitments to remedy, mitigate, or present the negative effects to competition in the market after the acquisition.
In the event they will not submit voluntarily to the jurisdiction of PCC, the Philippine Competition Act allows the Commission to launch a motu proprio review or open a case that may disentangle or block the deal.
This means the PCC will evaluate and analyze if after the acquisition, prices will likely increase; ride-sharing services will deteriorate; passengers will effectively have less options; and how likely other new transport network companies (TNCs) have a chance in fairly competing against the merged firm.
PCC recognizes that the exit of Uber in the Philippines will put its rival Grab in virtual monopoly in the ride-sharing market until the new players come into operation.
Like any other global transaction that PCC has handled before, the Commission will look into Grab-Uber’s operations in the Philippines as basis for the thresholds.
PCC is mandated under the Philippine Competition Act to review mergers, acquisitions and joint ventures of firms across all sectors. PCC is committed to ensure that Grab’s acquisition of Uber in the Philippines will not harm the interest of the riding public.
This means the PCC will evaluate and analyze if after the acquisition, prices will likely increase; ride-sharing services will deteriorate; passengers will effectively have less options; and how likely other new transport network companies (TNCs) have a chance in fairly competing against the merged firm.
PCC recognizes that the exit of Uber in the Philippines will put its rival Grab in virtual monopoly in the ride-sharing market until the new players come into operation.
Like any other global transaction that PCC has handled before, the Commission will look into Grab-Uber’s operations in the Philippines as basis for the thresholds.
PCC is mandated under the Philippine Competition Act to review mergers, acquisitions and joint ventures of firms across all sectors. PCC is committed to ensure that Grab’s acquisition of Uber in the Philippines will not harm the interest of the riding public.
PCC cited the consultation yesterday as a sign of willingness from both parties to comply with the provisions of the Philippine Competition Act, including ensuring real competition among ride-hailing options and promoting the welfare of the riding public.
Arsenio Balisacan
“We have yet to know the terms and conditions of their agreement,” the PCC chaired by Arsenio Balisacan said.
PCC, however, said that if the Notifying Group of either Grab or Uber breaches the R5 billion threshold for the size of the party and assuming the transaction involves the acquisition of Uber assets inside and outside the PH, the applicable threshold for the size of transaction are as follows:
(i) the aggregate value of assets in the PH of Uber exceeds R2 billion; and
(ii) the aggregate gross revenues generated in or into the PH by assets acquired in the PH and assets acquired outside the PH collectively exceed R2 billion.
If the transaction is notifiable, Grab and Uber are not allowed to consummate the deal without PCC approval. If the transaction does not meet the threshold and is not notifiable, the parties are not so precluded but Grab and Uber are urged to allow a voluntary review to take its course before consummating to minimize the need to unscramble the deal if found to have anticompetition concerns.
Should anticompetitive concerns arise out of the transaction review, the parties may propose commitments to remedy, mitigate, or present the negative effects to competition in the market after the acquisition.
In the event they will not submit voluntarily to the jurisdiction of PCC, the Philippine Competition Act allows the Commission to launch a motu proprio review or open a case that may disentangle or block the deal.
This means the PCC will evaluate and analyze if after the acquisition, prices will likely increase; ride-sharing services will deteriorate; passengers will effectively have less options; and how likely other new transport network companies (TNCs) have a chance in fairly competing against the merged firm.
PCC recognizes that the exit of Uber in the Philippines will put its rival Grab in virtual monopoly in the ride-sharing market until the new players come into operation.
Like any other global transaction that PCC has handled before, the Commission will look into Grab-Uber’s operations in the Philippines as basis for the thresholds.
PCC is mandated under the Philippine Competition Act to review mergers, acquisitions and joint ventures of firms across all sectors. PCC is committed to ensure that Grab’s acquisition of Uber in the Philippines will not harm the interest of the riding public.
This means the PCC will evaluate and analyze if after the acquisition, prices will likely increase; ride-sharing services will deteriorate; passengers will effectively have less options; and how likely other new transport network companies (TNCs) have a chance in fairly competing against the merged firm.
PCC recognizes that the exit of Uber in the Philippines will put its rival Grab in virtual monopoly in the ride-sharing market until the new players come into operation.
Like any other global transaction that PCC has handled before, the Commission will look into Grab-Uber’s operations in the Philippines as basis for the thresholds.
PCC is mandated under the Philippine Competition Act to review mergers, acquisitions and joint ventures of firms across all sectors. PCC is committed to ensure that Grab’s acquisition of Uber in the Philippines will not harm the interest of the riding public.
PCC cited the consultation yesterday as a sign of willingness from both parties to comply with the provisions of the Philippine Competition Act, including ensuring real competition among ride-hailing options and promoting the welfare of the riding public.