Malaysia’s competition regulator yesterday proposed a fine of more than 86 million ringgit (US$20.54 million) on ride-hailing firm Grab for contravening competition law by imposing restrictive clauses on its drivers.
The Malaysia Competition Commission (MyCC) ruled that Singapore-based Grab, which has backing from Japan’s Softbank Group Corp, had abused its dominant position in the market by preventing its drivers from promoting and providing advertising services for its competitors.
“MyCC further notes that the restrictive clauses had the effect of distorting competition in the relevant market that is premised on multisided platforms by creating barriers to entry and expansion for Grab’s existing and future competitors,” MyCC chairman Iskandar Ismail told a news conference.
The regulator also imposed a daily penalty of 15,000 ringgit from yesterday for as long as Grab fails to address the concerns.
Grab had 30 working days to make their representations to the commission before a final decision would be made, Iskandar said.
Grab said it was surprised by the decision as it believed it was “common practice for businesses to decide upon the availability and type of third-party advertising on their respective platforms, tailored according to consumers’ needs and feedback.”
“We maintain our position that we have complied fully with the Competition Act 2010,” a Grab spokeswoman said, adding that the firm would submit its written representations by Nov. 27.
The regulator last year said that it would monitor Grab for possible anticompetitive behavior after its acquisition of rival Uber Technologies Inc’s Southeast Asian business in March last year.
Malaysia would be the third country in the region to penalize Grab after the deal with Uber.
Last year, both firms were fined by antitrust watchdogs in Singapore and the Philippines.
Singapore said the deal had driven up prices, while the Philippines criticized the firms for completing the merger too soon and for a dip in service quality.
The Malaysian regulator’s investigations were based on complaints about Grab, and not due to its near monopoly of the market after the Uber deal, Iskandar said.
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