UBER has officially left the Philippines, defying the Philippine Competition Commission’s (PCC) order to continue operating independently while the antitrust body completes the review of the acquisition of Uber by rival Grab.
Arsenio M. Balisacan, the competition commission’s chairman, noted that while they are aware of the “many factors that led to the shutdown of the Uber app,” both parties should notify the antitrust body until April 17 as to why they failed to continue operating the Uber platform, as required under the agency’s interim-measures order.
“This development may have rendered the review conditions to be less than ideal. However, this move shall not derail the motu proprio review of the Grab-Uber transaction,” he said.
As part of the interim measures preferred by the competition commission, Uber was ordered to continue its independent operations beyond April 8, the date when it is expected to completely exit the Philippine market.
The competition watchdog is looking into Uber’s acquisition by Grab, as the transaction might give Grab a “virtual monopoly” in the ride-hailing market.
“When a big player buys out its competitor, there will be many economic and legal factors that need to be scrutinized,” Balisacan said.
Normally, a motu propio review—or an evaluation set by the agency itself—has two phases. The first phase of review can go up to 75 days. The second phase can go for as much as 120 days, hence, a total of up to 195 days.
But due to the nature of the deal, Balisacan noted that his group intends to fast-track the review, which can be done if parties involved in the evaluation will be cooperative in producing documents required by the antitrust body.
“We intend to expedite the completion of the review ahead of the allowed time frame, given how it is imbued with public interest,” he said.
Balisacan added that the PCC is more bent on reviewing the deal, given the recent developments in the ride-hailing market, where there are four prospective transportation network companies (TNCs) awaiting clearance from the Land Transportation Franchising and Regulatory Board (LTFRB).
“Grab’s buyout of Uber will mean gobbling up 93 percent of the ride-hailing market,” he said. “The accreditation of new TNCs is a welcome development to allow
passengers to have more choices. We note, however, that the incoming TNCs are left with only 7-percent share in the market.”
The antitrust authority explained that established firms have the advantage of an existing user base due to “network effects.” “This means that when you buy a firm, in effect, you also get its customer base. This is an advantage that a newcomer does not have. Our review will take into consideration these factors to level the playing field in this market.”
Grab and Uber entered into a buyout deal, wherein Grab will get the assets of Uber in Southeast Asia, while Uber gets a 27.5-percent stake in Grab. The Philippine units of Uber and Grab are included in the deal.
“The above concerns only strengthen our resolve to pursue the review using the antitrust law. In the end, the PCC stands with the passengers to protect them from the perils of monopoly,” Balisacan said.
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