2 April 2018
For Immediate Release
The Philippine Competition Commission (PCC) is the antitrust authority of the country with the mandate to protect competition in the market and prohibit anticompetitive conduct, including mergers and acquisitions of businesses and companies that may substantially prevent, restrict, or lessen competition.
The Grab-Uber acquisition is likely to have a far reaching impact on the riding public and the transportation services. As such, the PCC is looking at the deal closely with the end view of potentially reviewing it for competition concerns, as a notified transaction, or by opening a motu proprio case.
A merger or acquisition review using competition lens will determine whether the merger of two players in the ride-sharing market will substantially lessen competition. 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.
The PCC is meeting with the representatives of the parties today to determine if the transaction will meet the merger notification thresholds, and thereby verify if the Grab-Uber transaction is notifiable. The consultation is taken as a sign of the parties’ willingness 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.
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.
We have yet to know the terms and conditions of their agreement but if the Notifying Group of either Grab or Uber breaches the Php 5B 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 PHP2B; 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 PHP2B.
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 prevent 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.
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.