Vietnam Business Channel

Grab’s troubles in Vietnam aren’t over yet!

Grab, the popular ride-hailing service might have thought its legal problems in Vietnam were over when the Vietnam Competition Authority ruled that the acquisition deal between Grab and Uber did not violate Vietnam’s completion laws, but a new lawsuit filed by the Vietnam Competition and Consumer Protection Authority (VCA) seeks to overturn that decision

On June 28, the VCA submitted a letter of complaint to the Vietnam Competition Authority to protesting the Vietnam Competition Authority’s decision and cited various complaints and violations that it says were not considered.

The VCA specifically said it letter of complaint that it disagrees with the Vietnam Competition Authority Decision No.26/QD-HDXL, which refused to issue a fine or solutions to prevent unfair competition caused by the deal between Grab and Uber. The Vietnam Competition Authority said in its decision that the acquisition of Uber by Grab was not an illegal economic concentration under Article 17 of the Competition Law.

However the VCA disagrees, and their complaint said that by buying the entire assets of Uber Vietnam, Grab has gained control over its operations, which is effectively an illegal economic concentration under Article 17(3) of the Competition Law.

The VCA’s letter also stated that found that Grab did not comply with Vietnam’s legal code and regulations when the company did not report its economic concentration activity to comply with Article 20 of the Competition Law 2004.

The Vietnam Competition Authority will now have 30-days to deal with the complaint and are expected to announce its position at the end of July. Legal experts who have followed the Grab – Uber acquisition expect that the Vietnam Competition Authority will not change its decision, since doing so would call into question the agency’s decision making process and would also cause officials within it to “lose face.”

Grab first announced on March 26, 2018 that it had purchased Uber’s operations across Southeast Asia, including Vietnam. Other countries across the region reacted to the merger differently.

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In Malaysia, Grab introduced a Passenger Cancellation Policy that penalizes late cancellations and passengers who do not show up for their booking, but consumers protested that policy is one-sided since the penalties do not apply to drivers. Malaysian government authorities are now studying the issue and expected to make a ruling later this year.

In the Philippines, the Philippine Competition Commission (PCC) approved the merger in August 2018 but did so while imposing conditions on pricing and service quality. In October, the watchdog found that the companies had violated the PCC conditions and subsequently imposed a penalty of nearly $300,000 USD on Grab and said that it would continue to monitor the company and would impose additional penalties if its conditions were not met.

In Singapore, the merger was earlier judged as anti-competitive by the Competition and Consumer Commission of Singapore judged the merger as “anti-competitive” and fined the two companies $9.5 million USD after concluding that the merger had caused prices to raise.

 

 

 

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