PCC fines Grab P6.5m for filing ‘deficient,’ incorrect data

Grab Philippines were fined a total of P6.5 million by the Philippine Competition Commission for submitting incorrect data on its voluntary commitments.

According to PCC Chairman Arsenio Balisacan,  Grab’s submitted data were “inconsistent, incorrect and deficient.”

The data refers to Grab’s voluntary commitment to improve competition in the ride-hailing sector after it acquired  Uber Technologies in 2018, antitrust chief said during a  press conference held 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 said.

On Aug. 10, the PCC approved Grab’s acquisition of Uber but on the 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.

But PCC Commissioiner Johannes Bernabe said Grab violated the rule on price monitoring.

“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,” Bernabe said.

Bernabe added that Grab had submitted historical data on pricing, but that has been subject to human intervention/

“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.”

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

The PCC has required 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 in 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 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.

Grab then 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

But 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.

Topics: Grab Philippines , Philippine Competition Commission , Arsenio Balisacan , Johannes Bernabe
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