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PCC slaps Grab with P6.5-M fine for filing incorrect data

The Philippine Competition Commission imposed a P6.5-million fine against Grab Philippines for submitting incorrect data on its voluntary commitments.

PCC Chairman Arsenio Balisacan said Friday the data submitted by the transport network company  were "inconsistent, incorrect, and deficient.”

The data pertained to Grab’s voluntary commitment to improve competition in the ride hailing sector following its acquisition of rival Uber Technologies in in 2018, the antitrust chief said in a press conference in Quezon City.

“To recall, when Grab acquired Uber—its biggest competitor—it offered to adhere to a set of price and service-quality commitments through quarterly monitoring conducted by an independent monitoring trustee,” Balisacan noted.

On August 10, the PCC approved Grab’s acquisition of Uber on condition that the buyer adheres to fair competition and consumer protection

The PCC has since given the deal the thumbs up subject to a 12-month monitoring to ensure that concerns of “virtual monopoly” are addressed and Grab delivers on its commitments.

The main commitment violated by Grab is related to price monitoring, said PCC Commissioner Johannes Bernabe. “There were inconsistencies, deficiencies, and inaccuracies with the data that was provided. This prevented the PCC monitoring team to perform their duty in an effective way.”

Grab submitted historical data on pricing, but that has been subject to human intervention, Bernabe said.

“We want to have a complete set of the historical pricing coefficient data that will allow us to make a determination whether there was a deviation on the pre-transaction pricing behavior vis-a-vis the post-transaction to the extent they do not have a complete record of this pricing coefficient data, which they did not tell us prior to the undertaking,” he said.

“For them to provide this data they have had to reverse engineer and essentially come up with data that is subjected to human intervention rather than what is shown in their electronically stored data. Because of this, one can surmise that there is a possibility that because the data is subjected to human intervention it is not exactly the way it should be compared to when it was captured electronically.”

During the press briefing, PCC Commissioner Amabelle Asuncion said Grab has 45 days to pay the fine from the day it received the order issued on Tuesday, January 22.

The PCC has compelled the company to submit within five days the missing data, Asuncion said.

The complete and accurate data on pricing— from August 10, 2018 to November 10, 2018—is necessary for the antitrust body to make an accurate and unbiased report on the first quarter monitoring of Grab's voluntary commitments, Bernabe noted.

Grab has 15 days to file a motion for reconsideration.

In March 2019, Uber Technologies agreed to sell its Southeast Asian business to regional rival Grab, which spurred an operational merger in the Philippines.

The PCC then ordered its Mergers and Acquisitions Office (MAO) to conduct a motu proprio review of the acquisition deal on the premise that it may lessen competition in the industry.

For the merger to get regulatory approval, even if the motu proprio review is not yet finished, Grab submitted the following voluntary commitments:

  • Service quality—Grab shall bring back the same level or quality of service such as acceptance and cancellation rates, and response time to rider complaints prior to its acquisition of Uber
  • Transparency—Grab will revise its receipt to show the fare breakdown per trip, including distance, fare surges, discounts, promo reductions, and per-minute waiting charge
  • Pricing—Grab will not adopt prices that have an “extraordinary deviation” from the allowed minimum fares, and not exceed 22 percent before the acquisition was consummated. In the event the LTFRB allowed fare increases, the PCC shall adjust its deviation
  • Removal of “see destination” feature—Grab will remove “destination masking” for drivers with low ride acceptance rates
  • Driver/operator non-exclusivity—Grab is prohibited from signing on drivers and operators under an exclusive contract
  • Incentive monitoring—The PCC will monitor and evaluate Grab’s incentive scheme to ensure it will not affect potential competitors entering the market and expanding
  • Improvement plan—Grab will enhance driver performance standards; adopt a drivers’ code of conduct; establish a Grab driver academy; adopt an emergency SOS feature help center, and passenger no-show feature; adopt a passenger code of conduct; maintain dedicated service lines; adopt a driver welfare program; and implement driver rewards program

Despite having been found in violation of under the first round of review, Grab cannot yet be judged by the PCC on whether it will be compelled to divest from Uber.

“We will burn the bridge when we get there,” Balisacan said. —VDS, GMA News