Deal between Grab and Uber may be prohibited in Vietnam?

December 17, 2018 | 10:16

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It is now in the hands of the VCC to decide whether the M&A between Grab and Uber violates Vietnamese competition law.

deal between grab and uber may be prohibited in vietnam

The merger between Grab and Uber stands a solid chance of being found to go against regulations

On November 18, 2018, the Vietnam Competition Authority (VCA) under the Ministry of Industry and Trade finished its investigation to clarify signs of violation in the deal selling Uber’s Southeast Asian operations to Grab. According to the VCA’s conclusion, these companies showed signs of violation when they did not notify market regulators about the deal. Besides, there is evidence suggesting the deal resulted in an illegally large economic concentration.

The VCA will submit its results to the VCC for further investigation. Within 30 days after receiving the results, the VCC may open a hearing to issue a decision to handle the case.

Previously, in May, after a preliminary investigation lasting 180 days, the VCA found that Grab’s market share after the deal will exceed 50 per cent, which goes against the monopoly clauses of the Competition Law.

According to the Competition Law, if enterprises participating in an economic concentration have a combined market share of 30-50 per cent, their lawful representatives must notify the competition authority before implementing the concentration, otherwise they will have to pay a fine of 10 per cent of the revenue from the fiscal year previous to the date the deal was completed (if the deal is completed in 2017, the fine is equal to 10 per cent of the revenue of the 2016 fiscal year).

To boot, if the VCC concludes that the deal between Grab and Uber results in a combined market share that exceeds 50 per cent of the relevant market, the economic concentration will be found illegal according to the Competition Law.

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