Grab vows to pay up to P2M per breach of promises

The antitrust Philippine Competition Commission (PCC) ended a 70-day negotiation with Grab Philippines Inc., accepting promises made by the ride-hailing firm not to monopolize the industry and retain ride costs prior to its purchase of competitor Uber.

The commitments made by Grab would have it pay a maximum of P2 million per fine for every breach, according to PCC officials in a press conference on Friday.

Changes in Grab’s operations should be expected at the end of the year, according to PCC Commissioner Stella Alabastro Quimbo.

PCC and Grab had gone through a series of talks which led to Grab committing not to take advantage of its virtual monopoly status and PCC to set aside the review of Grab’s takeover of Uber.

Flagged deal

The review could have scuttled the Grab-Uber deal, which had been flagged by antitrust bodies not only in the Philippines but in other Southeast Asian countries, too.

“The situation, admittedly, is going to be tough on Grab,” said PCC Commissioner Johannes Benjamin Bernabe.

“We imposed tough conditions,” he said.

Grab, he said, was required to fulfill the commitments starting on Aug. 10. Among these are on pricing, acceptance and cancellation rates and incentives.

PCC officials said Grab’s adherence to the commitments would be monitored every three months. Every breach would cost Grab P2 million or a rejection of its purchase of Uber.

Grab will nominate three independent firms to monitor the company’s performance, said PCC Commissioner Amabelle Asuncion.

The monitoring teams’ findings would be vetted by the PCC, Asuncion said. Grab would pay for the monitoring teams.

“I think it’s a careful balancing act between what we see as an imperative to protect consumers and to protect competition in the market vis-a-vis their business objectives,” Bernabe said.

As if Uber’s still here

Grab was allowed to be flexible with its pricing as long as prices do not exceed average rates when Uber was still present, the PCC officials said.

Asuncion said this meant that Grab’s fares should be at least similar, or the same as before. She said this would be “as if Uber [were] still present.”

“The idea, if I can simplify it, is whatever their prices prior to the merger where there was competition coming from Uber, we just want them to revert back to that situation,” she said.

The average prices differ per route, a factor that was considered in determining what counted as “extraordinary deviation,” Quimbo said.

She said the PCC detected an increase in fare ranging from 25 to 30 percent after Grab bought Uber.