Philippine Competition Commission fines Grab P6.5 million

MANILA, Philippines — The Philippine Competition Commission (PCC) has imposed another fine on Grab Philippines – this time amounting to P6.5 million – for submitting deficient, inconsistent and incorrect data on pricing.

In a press conference yesterday, PCC chairman Arsenio Balisacan said the antitrust body imposed the fine on the ride-share app on Tuesday.

PCC commissioner Johannes Bernabe said at the same briefing that Grab is being fined for a violation related to price monitoring for the period covering Aug. 10 to Nov. 10 of last year.

“There are certain inconsistencies with the data as it relates to price monitoring commitment… Suffice it to say that this prevented the monitor and the PCC team from trying to carry out its monitoring of pricing commitments in an effective way, in a way which we have unbiased, credible outcome,” he said.

In August last year, the PCC cleared Grab’s acquisition of its rival Uber subject to conditions on service quality and pricing standards which the ride-share app has to comply with.

To address concerns raised by the PCC on the transaction, Grab committed to bring back market averages for acceptance and cancellation rates for service quality; show fare breakdown to provide transparency; not to have any “extraordinary deviation” from minimum allowed fare on pricing; remove destination masking for drivers with low acceptance rate; allow its drivers or operators to register under other Transport Network Companies; allow monitoring of incentives and implement an improvement plan to enhance driver performance and better serve passengers.

Grab’s compliance with the commitments is being monitored per quarter for a period of one year from August last year by a third party.

Any breach of the conditions would mean fines of up to P2 million per breach, or even an unwinding of the transaction.

“These commitments were designed to address the Commission’s concerns regarding Grab’s pricing behavior, as well as its incentives to maintain service quality, in the absence of a significant competitive pressure in the market. However, the Commission cannot effectively enforce these commitments without the submission of correct, sufficient, consistent and timely data by Grab,” Balisacan said.

Bernabe said the PCC would need a complete set of the historical pricing data from Grab.

“That will allow us to make a determination whether there was any deviation from the pre-transaction pricing vis-a-vis post-transaction pricing 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 Grab to provide such data, he said the ride-share app may have to “reverse engineer” and come up with data subject to human intervention rather than what is shown in its 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,” he said. – With Romina Cabrera