The Philippine Competition Commission (PCC) slapped another P9-million fine on Grab Philippines for failure to fully refund its customers more than three years after the PCC first ordered the reimbursement.
The PCC issued the new penalty on Grab in the first week of February 2023, for violating three separate commission orders requiring Grab to return a combined P25.45 million to its customers.
In 2022, the PCC told Grab to immediately release the remaining P19.3 million refund to passengers after finding the ride-hailing app’s low disbursement of the refunds from previous fines.
After reviewing the compliance reports for previous penalties, the PCC found that only 24.1 percent of the total refund has been claimed from Grab by eligible passengers as of 15 June 2021, or P6.15 million out of the total P25.45 million penalty required by the PCC to be returned to Grab users.
The ride-hailing app required additional steps for passengers to claim the refund, contributing to the low uptake. PCC advised Grab that the refund should be immediately credited via GrabPay Wallet without requiring any action from the users to claim the amount.
The antitrust agency penalized Grab a total of P63.7 million since 2018 for violations of its price and service quality commitments. It was in late 2019 when the PCC imposed on Grab the penalty to return a portion of its commissions to Grab’s passengers for violating its price monitoring commitment.
The PCC has since ordered Grab to issue refunds in the amounts of P5.05 million in November 2019, P14.15 million in December 2019, and P6.25 million in October 2020.
Grab meanwhile released a statement saying “we are glad that the PCC has finally come to a decision on the disbursement mechanism for the remaining administrative fees – so we can put this matter to rest.”
“At the same time, we are surprised at PCC’s decision to fine us – given that we’ve been proactively engaging with them for over a year with proposals for alternative mechanisms to disburse the remaining administrative fees,” the statement said.
Grab also said the company will be evaluating legal options regarding the P9 million fine.
To recall, Grab’s takeover of Uber in 2018 raised competition concerns and was subjected to a Commission decision committing the merged
entity to a standard as if it had a rival. Part of its voluntary commitments was ensuring it will not undertake unreasonably different
pricing behaviors pre- and post-transaction.
During the monitoring period, PCC found that the ride-hailing company committed extraordinary pricing deviations, which resulted in the
three sets of penalties.
Under the Philippine Competition Act, the PCC has the power to review a merger between or among businesses to ensure their transaction does
not restrict competition in the market where the merged entity will operate. The law forbids anti-competitive mergers, which ultimately
harm consumer welfare. The Commission issued the refund orders after Grab failed to deliver on its price monitoring commitment.
PCC issued the first order on November 2019, followed by a second order a month later, and a third in October 2020. On each occasion,
Grab was given a 60-day deadline to complete the refund from receipt of each order.
Under Section 29 (b) of the Philippine Competition Act (PCA), an entity which fails or refuses to comply with a ruling, order, or decision issued by the PCC is required to pay P50,000 to P2 million pesos for each violation.
In the same resolution, the PCC also imposed a P3 million fine on Grab for providing incorrect and misleading information in the compliance
reports that the company submitted with respect to the refund orders.
In those reports, Grab claimed that it had completed the refund.
However, PCC’s review found that only 24.16 percent of the total amount had been returned to Grab’s customers as of June 2021, more
than 5 months after the deadline for the Commission’s 3rd refund order.
It was only after the PCC issued a show-cause order in January 2022 when compliance to the refund order shot up to 73.80 percent in April
2022, still short of the full refund.
The PCA also allows PCC to impose fines of up to P1 million when entity purposely supplies incorrect or misleading information in any
document, application or other paper filed with or submitted to the Commission.
The Commission also directed Grab to put in place an alternative refund mechanism that would allow its customers to claim remaining
refunds. To ensure higher take-up of the refund, the PCC instructed Grab to exhaust different platforms to inform customers about the
pending reimbursement.
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(Grab statement)
reax grab ph
“We are glad that the PCC has finally come to a decision on the disbursement mechanism for the remaining administrative fees – so we
can put this matter to rest. At the same time, we are surprised at PCC’s decision to fine us – given that we’ve been proactively engaging
with them for over a year with proposals for alternative mechanisms to disburse the remaining administrative fees.
Grab Philippines has always been 100% committed to fully depleting the unclaimed admin fees, and have made every effort we can to do so. We
proposed alternative disbursement mechanisms and are surprised that the PCC made a decision in February 2023 without informing us – given
that we’ve been regularly following up with them. Nevertheless, we will implement the order of the PCC for Alternative Refund Mechanism
as required by the PCC Order.
As we have been forthcoming in explaining our legal position, and challenges to the PCC; and have been proactive in proposing
alternative disbursement mechanisms, we will be evaluating our legal options regarding the P9 million fine.
