MyCC slaps RM87m fine against Grab Malaysia

The commission also proposes a daily penalty of RM15,000 against the e-hailing firm from yesterday

by LYDIA NATHAN/ pic by MUHD AMIN NAHARUL

MALAYSIA’S anti-competition agency has slapped a proposed fine of RM86.8 million against Grab Malaysia, rattling one of the world’s largest ride-hailing companies.

Grab Holdings Inc said it was “surprised by the decision and will seek legal redress against the findings by the authority”.

The fine is the largest proposed by a competition regulator against Grab after Singapore.

The Philippines also fined the Singapore-based firm for infringements related to anti-monopoly laws.

The Malaysia Competition Commission (MyCC) said the app-based chauffeur rental service provider Grab Inc, Grab Car Sdn Bhd and MyTeksi Sdn Bhd (Grab) had collectively breached the Competition Act 2010.

MyCC also proposed a daily penalty of RM15,000 against the e-hailing firm from yesterday. MyCC found that Grab had abused its dominant position by imposing some restrictive clauses on its drivers.

“We found Grab prevented its drivers from promoting and providing advertising services for Grab’s competitors in the e-hailing and transit media advertising market,” said MyCC CEO Iskandar Ismail said yesterday.

Iskandar was reported as saying that the restrictive clauses had distorted competition and created barriers to entry and expansion of Grab’s competitors.

The anti-competitive laws aim to prevent any company from abusing their dominant position in any market for goods or services. Grab has 30 days to make a representation to the commission.

In a statement yesterday, the e-hailing firm said it had fully complied with the laws on competition.

“We will be submitting our written representations to MyCC by Nov 27, 2019, as our legal counsels are now studying the proposed decision. We believe that it is 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,” a spokesperson for Grab said.

Authorities began monitoring Grab after the app, which originated from Malaysia’s MyTeksi, acquired Uber Technologies Inc’s South-East Asian business in a multibillion dollar deal.

Grab’s deal with US-based Uber created a ride-hailing giant with a monopolistic market share in most countries in South-East Asia, including Malaysia.

Authorities in Singapore, the Philippines and Malaysia have been monitoring Grab’s business practices for possible anti-monopoly breaches.

The commission had stepped up its anti-monopoly investigations into Grab, Bloomberg reported last month.

Grab maintained that it had fully cooperated with the commission and was unaware of any breach of Malaysian competition laws since the acquisition.

Singapore and the Philippines also had fined Grab. Singapore’s anti-competition watchdog fined Grab and Uber S$13 million (RM39.5 million) collectively in September last year, citing increased ride fares.

The Philippine Competition Commission also fined both companies a cumulative 16 million pesos (RM1.3 million) by which said the merger happened too fast and took a toll on service quality.

If MyCC’s proposed RM87 million fine stands, it would be the highest levy imposed on Grab in the region.

Malaysian consumers have repeatedly highlighted the rise in fares since the Grab-Uber deal. Grab, however, denied the allegations. Grab, which is valued over US$14 billion (RM58.66 billion), is estimated to have above 80% of the ride-hailing market share in Malaysia.