Grab slapped with P23.45-M fine
Credit to Author: Jordeene B. Lagare| Date: Mon, 18 Nov 2019 16:13:59 +0000
THE Philippine Competition Commission (PCC) has slapped Grab Philippines with a financial penalty amounting to P23.45 million for breaching its pricing commitments.
In his opening statement, PCC Chairman Arsenio Balisacan said on Monday the amount covers P11.3 million imposed for the first quarter, P7.1 million for the second quarter, and P5.05 million for the third quarter.
The P5.05-million refund caused by “overcharging” will be given to the affected riders via GrabPay. “To kick off the refund system, the disgorgement mechanism shall be applied on the third quarter fine,” he added.
In a press briefing, PCC Commissioner Amabelle Asuncion the refund will be credited within 60 days upon Grab’s receipt of the order. But moving forward, any future rebates will be completed within 30 days.
The antitrust watchdog was prompted to penalize Grab for failure to comply with commitments made by the ride-hailing service to the government. The overall objective, he said, is to “restore competition” in the ride-hailing market.
Grab itself recognized the need to extend its voluntary commitments that started on November 1, adding it would take four years to encourage new players to “enter and grow” in the ride-hailing market.
With that, the PCC would place Grab under a watchful eye for another year to address competition concerns, including prevailing market dominance, Grab’s ability to unilaterally increase prices profitability, existence of significant barriers to entry, and inadequacy of Grab’s service quality to the detriment of the riding public.
With this extended undertaking, Grab pledged old and new commitments including non-exclusivity guarantee to not impose or introduce any agreement, policy or incentive that would result in exclusive membership or registration by drivers or operators in Grab.
It also covers incentives monitoring to ensure incentives, benefits, promotions or rewards for its drivers or operators do not result in exclusivity to Grab; as well as assistance commitment to provide licensing and regulatory support, including return of documents to drivers and operators even when operating under competitors.
In terms of pricing, Grab shall maintain pricing at a level comparable to the period prior to the Uber acquisition.
Grab has vowed to honor the PCC order of refund to its customers who booked a ride with them from February to May this year.
“We respect the PCC and its mandate to protect the consumers in the Philippines and create a healthy competitive environment. Grab Philippines has worked closely with the PCC to form and finalize these voluntary commitments,” Grab said in a statement on Monday.
“Grab looks forward to fulfilling these voluntary commitments with the guidance and oversight of the PCC,” it added.
This was not the first time that the PCC fined Grab. In January, Grab was fined P6.5 million for failure to comply with key provisions related to its acquisition of rival ride-hailing firm Uber. It was on top of the P16-million penalty on Grab and Uber that the PCC imposed over violations committed while the deal was being reviewed.