Grab gave ‘incorrect’ data about its pricing to government – PCC
Credit to Author: acerojano| Date: Fri, 25 Jan 2019 08:30:21 +0000
MANILA, Philippines – Grab Philippines sent incorrect data about its pricing, derailing the antitrust body from assessing whether or not the company has so far addressed the fallout since it took over Uber.
There were inconsistencies in Grab’s data about its pricing, top officials of the Philippine Competition Commission (PCC) said on Friday, slapping the company with a P6.5 million fine.
PCC Chairman Arsenio Balisacan said the fine was imposed because Grab submitted “deficient, inconsistent, and incorrect data for the monitoring of its compliance with its voluntary commitments.”
Grab also said on Friday that it would file a motion for reconsideration.
All this develops in the aftermath of Grab’s regional takeover of its rival Uber in March last year, a deal that made Grab a virtual monopoly in the Philippines.
While this gave the company a stronger market power, many riders complained that such advantage did not necessarily translate to better services as higher fares preyed on a traffic-weary public.
PCC previously flagged this deal, launching a review amid concerns that the transaction might come at the expense of the ride-hailing market.
Months later, the antitrust body set this review aside after Grab agreed to so-called voluntary commitments, wherein the company would be monitored by an independent trustee to commit to specific changes in its operations.
Balisacan said that these commitments were made to address concerns in the company’s pricing behavior as well as incentives to maintain service quality “in the absence of significant competitive pressure in the market.”
“However, the Commission cannot effectively enforce these commitments without the submission of correct, sufficient, consistent, and timely data by Grab,” he said.
Furthermore, PCC Commissioner Johannes Bernabe said the commitment that was violated was “related to price monitoring.”
“We have monitored together with the monitoring team that there are certain inconsistencies with the data as it relates to price monitoring commitment,” said Bernabe.
PCC did not say how wrong or grave Grab’s actions are. It also remains to be seen if such actions would later on lead to a revival of the review, which has always been a fallback option.
“We do not want to presume that this is going to be a continuing trend towards violating their undertaking,” Bernabe said.
However, then-PCC Commissioner Stella Quimbo said sometime last year that the government could unwind the Grab-Uber deal “in an extreme situation where there would be a blatant disregard” of the commitments.
Grab Philippines President Briant Cu said that the company would file a motion for reconsideration, noting they would like to know why PCC fined the company as much.
He said that PCC required Grab to submit data that cover the period after the transaction was made in March.
Given the nature and huge volume of data required, he said the company worked “under very limited timelines to meet PCC’s deadline.”
“During the voluntary commitment negotiations, Grab recommended various ways to present the requested data based on how the system can best provide them. Given enough time, we can reconcile our data structure with theirs,” he said.
“Three out of four penalties were set at a maximum amount of P2 million pesos each. Given the breakdown of the fines vis-a-vis the severity of the lapses alleged by the PCC, we would like to understand better PCC’s rationale for imposing a maximum penalty,” he added.
However, this is not the first time the competition watchdog has fined the company.
Last year, PCC fined Grab and Uber P16 million for causing undue difficulties that prejudiced the review process of their controversial takeover deal.
PCC officials said then that the violations of these companies have made the review process unnecessarily tricky, despite explicit orders against such actions.
Broken down, both companies are collectively fined P4 million for failure to keep their businesses separate.
Grab, for its part, has been penalized to pay P8 million for failure to maintain pre-merger conditions such such as pricing policies, rider promotions, driver incentives, and service quality.
Uber, as the acquired party, was fined P4 million or half of Grab’s fine for the same set of violations./ac