Grab’s acquisition of Uber in Vietnam back in March 2018 does not violate Vietnam’s Competition Law, a Vietnamese competition council has found.
This is a good legal win for Grab in Vietnam as the ride-haling firm continues facing fierce competition from rivals Go-Viet and FastGo. At the same time, the government is planning to subject ride-haling companies to stricter requirements. Vietnam’s Ministry of Transport, in a draft decree, proposed to regulate ride-hailing apps that provide passenger transportation services such as Grab to have roof signs showing that they are “contract vehicles.”
The Vietnam Competition Council, an independent council with members appointed by the Prime Minister, has ruled that the acquisition does not violate Vietnam’s Competition Law from 2004. The decision was made public on the website of Vietnam’s Ministry of Trade and Industry.
The Competition Law stipulates that any merger or acquisition that results in a company gaining 30% or more market share must be reported to authorities. The Vietnam Competition Authority had filed the case to the council, arguing that the Grab-Uber transaction violated this regulation.
Grab claimed that at the time of the acquisition, its combined market share with Uber in Vietnam would be less than 30%.
The Council neither confirmed nor denied this, saying there was not enough evidence to conclude that the acquisition was monopolizing the market.
Grab Vietnam is freed from any fine–a considerably better outcome compared to other countries. In September 2018, Singapore’s competition authority fined Grab and Uber a total of SGD 13 million (USD 9.5 million) because the deal was found to reduce competition in ride-railing. A month after the Singapore verdict, the Philippines’ competition watchdog also fined both ride-hailing companies a total of PHP 16 million (nearly USD 297,000).
Grab acquired Uber in Southeast Asia in March 2018, which resulted in the takeover of Uber’s various units in the region including Vietnam.
Since Uber exited Vietnam, Grab has been facing newer competitors in the e-hailing sector, most notably Go-Viet, which is an offshoot of Indonesia’s Go-Jek, FastGo, and Be.
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