Senior Associate Ashok Rai was quoted in the Edge Singapore article titled "Singapore's competition watchdog fines Grab and Uber but can fair play resume?"

Eversheds Harry Elias Senior Associate Ashok Rai was quoted in the Edge Singapore article titled "Singapore's competition watchdog fines Grab and Uber but can fair play resume?". The article was first published on 1 October 2018.

Singapore's competition watchdog fines Grab and Uber but can fair play resume?

Lacking bite?
While drivers and passengers are supportive of the move, some critics say CCCS’s decision — almost half a year after the transaction — comes too little, too late, and is not effective in tackling the deeper issues plaguing the industry. But, the way Singapore University of Social Sciences (SUSS) transport economist Walter Theseira explains it, CCCS could not “go in with guns blazing” when the merger was first announced in March; it first had to conduct a proper economic analysis on the impact of the merger. “You can arrest somebody in the middle of a crime, but you cannot apply a legal penalty to them without the proper legal process,” he says. Theseira notes, however, that the financial penalty imposed was not the same as that for more serious infringements such as price fixing, for example. In fact, he sees the fines as “mostly sending a signal” on the “lack of responsibility” in not seeking clearance with CCCS before going ahead with the merger despite signs that it could trigger anti-competition concerns.

Under CCCS guidelines, merging entities are not required to notify the body of their merger. It says the entities should conduct a self-assessment to ascertain if a notification to CCCS is necessary. “Grab had, with its advisers, assessed that the transaction would not result in a substantial lessening of competition,” says Daren Shiau, co-head of Allen & Gledhill’s competition and antitrust practice. The law firm acted as transaction counsel for Grab on the merger. Shiau says the parties had received a letter from CCCS explaining Singapore’s merger notification regime and powers to investigate. However, he notes that this “does not suggest” that there was any intentional or negligent breach of competition laws.

“Perhaps it would be more effective if merging entities had to notify CCCS of their merger plans,” says Ashok Rai, a senior associate at Eversheds Harry Elias. “However, [the CCCS’s current requirement for] self-assessment strikes the right balance between protecting business interests and preventing anti-competitive behaviour.” The way Rai sees it, the ruling by the CCCS is fair. “Given that ride-hailing platforms have become a mainstream transportation option for consumers, CCCS’s ruling is to be welcomed. The ruling places pressure on Grab to remain competitive both in terms of pricing and product offerings,” he says. However, Rai wonders whether the CCCS will be able to effectively monitor its order to Grab on maintaining its pre-merger pricing algorithms and driver commission rates. “I note that CCCS has directed Grab and Uber to appoint a monitoring trustee to monitor their compliance with CCCS’s directions. The European Commission has been using monitoring trustees for many years as part of their competition law regime, so much can be learnt from them,” he says.

Full article can be found in the print publication of The Edge Singapore, October 01, 2018 edition.

Author: Stanislaus Jude Chan, The Edge Singapore