The Competition Commission of Singapore (CCS) listed 10 issues that require further in-depth assessment of the Strategic Alliance between ComfortDelGro Corporation Limited and Uber Technologies, Inc. and the Proposed Acquisition of Lion City Holdings Pte. Ltd.
CCS stated that it received notifications from the companies on 11 December 2017 in relation to whether a strategic alliance pursuant to a Commercial Collaboration Agreement between CDG and Uber would infringe the section 34 prohibition of the Competition Act (Cap. 50B) against anti-competitive agreements and the section 47 prohibition of the Act against an abuse of a dominant position.
Another thing raised is whether the proposed acquisition by CDG of 51 percent of the existing issued and paid up shares of Lion from Uber would infringe the section 54 prohibition of the Act against anti-competitive mergers.
CCS stated that it has informed the Parties on Monday (19 February) that it has concluded an initial review of the Proposed Collaboration and the Phase 1 review of the Proposed Acquisition.
CCS is unable to conclusively determine that competition issues will not arise, and has identified the following issues, that may affect competition within the relevant markets in relation to both the Proposed Collaboration and Proposed Acquisition, that require further in-depth assessment:
1. whether the uberFLASH service involves any coordination of pricing between competitors;
2. whether flat-fare service offered by CDG pre-collaboration with “no surge pricing” will continue to be available for commuters;
3. whether taxi and chauffeured private hire car drivers (CPHC) are able to take jobs from multiple ride-hailing platforms if they wish to.
4. whether the variety of payment options for commuters will be reduced;
5. whether the ability of certain players to enter into related businesses such as food delivery services will be affected;
6. whether the availability of non-app ride-hailing options, including street-hail and phone booking, will be affected;
7. whether there will be a substantial lessening of competition in the industry, given the various contractual and shareholding relationships between players, as well as potential consolidation in the industry;
8. whether competition will be reduced in the CPHC and taxi rental market;
9. whether the competitive dynamics of the CPHC and taxi rental market affects competition in the booking and passenger ride services markets; and
10. whether the Proposed Collaboration and the Proposed Acquisition will bring about economic efficiencies such as shorter waiting times for commuters and more job opportunities for drivers.
CCS noted that to proceed with assessing the Parties’ notification of the Proposed Collaboration, it has requested the Parties to submit further information as set out in Form 2 of the CCS Guidelines on Filing Notifications for Guidance or Decision with respect to the Section 34 Prohibition and Section 47 Prohibition 2016 by 5 March 2018, unless they are able to address the competition issues identified.
Following the Parties’ submission of Form 2, CCS sttaed that it will proceed to an in-depth assessment which includes inviting public feedback and views, and determining whether the Proposed Collaboration will infringe the sections 34 and/or 47 prohibitions against anti-competitive agreements and abuse of a dominant position respectively.
While, to proceed with assessing the Parties’ notification of the Proposed Acquisition, CCS has requested the Parties to submit further information as set out in Form M2 in the CCS Guidelines on Merger Procedures 2012 by 5 March 2018, unless they are able to address the competition issues identified.
Following the Parties’ submission of Form M2, CCS stressed that it will assess whether the Proposed Acquisition will infringe the section 54 prohibition against anti-competitive mergers.
Under the CCS Guidelines on Merger Procedures 2012, a Phase 2 merger review can take up to 120 working days from the date on which Form M2 is filed. CCS will issue a decision on or before the terminal date.
CCS notes that, as of 19 January 2018, the Parties have already launched their uberFLASH service, which constitutes part of the Proposed Collaboration currently under CCS’s review. In general, an immunity from financial penalty applies to any agreement notified to CCS, from the date of notification till the date CCS issues its decision.