The Vietnam Competition Authority (VCA) under the Ministry of Industry and Trade has decided to conduct a preliminary investigation into Grab’s purchase of Uber’s stakes in Vietnam, which is suspected to breach regulations on economic concentration under the country’s Law on Competition 2004.
Source: Channel NewsAsia
The investigation will take 30 days counting from the day the decision was issued (April 13).
Following Grab’s announcement on March 26 about its purchase of Uber’s operation in Southeast Asia, including Vietnam, the VCA sent a dispatch to GrabTaxi requesting the provision of information and documents related to the acquisition.
However, GrabTaxi claimed that the combined market share of both Grab and Uber in Vietnam is less than 30 percent, so it does not have to “inform the competition authority before proceeding and completing this transaction in Vietnam”.
The VCA held a working session with GrabTaxi’s legal representative on April 6, but the ride-hailing firm failed to give evidence proving its claim.
The VCA urge the company to carefully assess the market share after acquisition to ensure compliance with regulations on economic concentration of the competition law before conducting transactions in Vietnam.
On April 12, the VCA also met with Uber representative, who said the company officially stopped operations and closed all offices in Vietnam from 11:59 pm on April 8, which means the transaction between Grab and Uber was already completed in Vietnam. Grab is one of the most frequently used O2O (online-to-offline) mobile platforms in 195 cities in Southeast Asia. More than 5 million people use the combined platform daily.
Vietnam is not the only country where Grab is currently under fire. Other Southeast Asian countries such as the Philippines, Singapore and Malaysia, are all requesting a detailed explanation of the company’s acquisition of Uber out of concern about the risk of Grab’s monopoly in the market.