Grab - Uber deal is on the verge of facing an offical probe due to breach of antitrust law in Vietnam

By Tran Anh - May 18, 2018 | 06:21 AM GMT+7

TheLEADERThe Competition and Consumer Protection Department (CCPD) under the Ministry of Industry and Trade considers launching a formal investigation into the acquisition of Uber in Southeast Asia including Vietnam by Grab, after announcing the preliminary results are presenting the sign of breaching antitrust law on May 16.

In particular, after working with the firms, associations and related government authorities, CCPD has found the signs of violations on economic concentration regulated in Vietnam's antitrust law 2014 on the takeover deal with a combined market share of over 50 percent.

Antitrust law also known as competition law, provides regulations on restraint of competition, unfair competition, order and procedures for handling competition cases and measures to handle violations of competition law.

Under the provisions of antitrust law, when the combined market share of the parties accounts for 30 percent to 50 percent of the market without prior notification to the competition authorities for an acquisition, the participating enterprises could be subjected to a fine up to 10 percent of total revenue in the financial year prior to the year of the offense.

Additionally, if the combined market share of the parties is over 50 percent then the transaction can be forbidden.

Previously, Grab confirmed that the total market share of its business in Vietnam after acquiring Uber is still under 30 percent, which according to Grab is unnecessary to report the transaction to the authorities.

Nevertheless, when working with the CCPD, Grab was unable to provide any concrete evidence to support its claim.

As a result, CCPD is considering an official probe eyeing the breach. At the end of the investigation, the Department shall forward the report to the Competition Council for handling according to regulations.

At the end of March, Grab announced the takeover of Uber's business in Southeast Asia, including Vietnam in which Grab will transfer 27.5 percent of its stake to Uber.

According to Reuters, Vietnam’s action broadens scrutiny on the takeover, which is already being inspected for breach of competition law in Singapore, Malaysia and the Philippines.

It is obscure how the deal will be affected if Vietnam or any other nation conclusively confirms the acquisition damages the competition.

However, while increasing regulatory scrutiny could complicate the takeover, lawyers and analysts said there is little the authorities can do to stop Uber from simply exiting the region, as mentioned in The Star Online.