Grab was fined P16.

15 million by the PCC in December

2019 for violating its price and service commitments in
May-August rides.

https://www.phcc.gov.ph/press-releases/pcc-grab-fine-16-15m-
eod-sdf-q4/

The Philippine Competition Commission (PCC) has imposed a fine

of P16.15 million on Grab Philippines for violating its price and
service quality commitments during the 4th quarter of the initial
undertaking, marking the completion of PCC’s first year of
monitoring Grab on its voluntary commitments.

The Commission Order released on Friday comes on the heels of

the audit report submitted by Smith & Williamson, an
independent monitoring trustee tasked to examine Grab’s
compliance with its voluntary commitments on price, service
quality, and non-exclusivity for one year or until August 10, 2019.

The fine is the latest in a string of penalties faced by Grab for

violating its commitments. Each violation incurs an administrative
penalty ranging from P50,000 to P2 million as provided by the
Philippine Competition Act. With the merger of the country’s two
biggest ride-hailing apps, Grab’s violations are indicative of its
exercise of market power in the absence of a competitor of
adequate scale in the market.

For the fourth leg of the initial undertaking, PCC imposes a fine
P14.15 million for Grab’s extraordinary deviation on its pricing
commitment, and P2 million for exceeding driver cancellations at
7.76% instead of the committed 5%.

Refund to riders
For violating its pricing commitments to PCC, Grab was earlier
fined P11.3 million in the first quarter; P7.1 million in the second
quarter; and P5.05 million in the third quarter. Fines for the third
and fourth quarters will be refunded to qualified Grab riders.

Passengers who availed of Grab’s service between May 11 to

August 10 this year, or the 4th quarter of the initial undertaking,
shall expect the rebate within 60 days through GrabPay credits.

PCC underscores that the disgorged amount shall be paid by Grab

and shall not be passed on to its drivers or riders.

“The ride-hailing market has seen profound changes in the past

year as a result of Grab’s acquisition of Uber. With the
commitments in place, PCC aims to maintain pre-transaction
market conditions and will discipline any tendency to exercise
monopolistic power with corresponding penalties,” said PCC Chair
Arsenio M. Balisacan.

PCC price range vs LTFRB fare structure

Grab’s pricing commitment to PCC is separate and independent

from the fare structure of the Land Transportation Franchising
and Regulatory Board (LTFRB). While LTFRB has imposed a fare
matrix for all transport network vehicle services, the PCC binds
Grab to its voluntary commitments, including keeping its fares
within a range as if a competitor like Uber were present in the
market.

As such, PCC fines Grab for fares that deviated from its pricing
commitments to the Commission, even if the same is not
considered overcharging based on the fare matrix imposed by
LTFRB.
As the initial undertaking lapsed, PCC found that there remains
insufficient competition in the ride-hailing market. On October 31,
Grab signed a new set of voluntary commitments as a continuing
condition for the antitrust authority’s clearance of Grab’s
acquisition of Uber in the Philippines in 2018.

The Commission also looks to other players that can sufficiently

complete with the current dominant firm in the ride-hailing
market.

“More than a year after the Grab-Uber merger, the PCC instituted
these measures to address the persistent impact of a virtual
monopoly in this sector.  The game-changer, however, will come
in the form of a new player with strong financial muscle to enter
the ride-hailing market and an environment that allows existing
players to grow. Until then, the commitments stand for the
benefit of the riding public,” Balisacan added.

REFERENCE:
Penelope P. Endozo
publicaffairs@phcc.gov.ph
Public Affairs Division
Philippine Competition Commission
In May 2023, the PCC imposed a fresh fine of P9 million on
Grab for delaying refunds to customers.

https://www.phcc.gov.ph/press-releases/pcc-slaps-fresh-p9-
million-fine-on-grab-amid-refund-delay/

PCC Slaps Fresh P9-million Fine On Grab Amid Refund

Delay

PRESS RELEASE
15 May 2023

The Philippine Competition Commission (PCC) has slapped a fresh

nine-million peso fine on Grab Philippines amid its failure to fully
refund its customers more than three years after the PCC first
ordered the reimbursement.

The latest fine is on top of the P63.7 million in penalties that the
PCC had imposed on Grab over the years since it acquired the
Philippine operations of then lone rival Uber in 2018. To recall,
the PCC cleared the acquisition at the time after Grab committed
to addressing several competition concerns raised by the
Commission.

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.

 
Violation of refund orders

In a Resolution dated February 2, 2023, the PCC imposed a six-

million peso fine on Grab for violating three separate Commission
orders for the company to return a combined P25.45 million to its
customers. The refund orders were issued after Grab failed to
deliver on its Price Monitoring Commitment.

The earliest Commission order was issued in 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, an entity

which fails or refuses to comply with a ruling, order, or decision
issued by the PCC shall pay a penalty of not less than P50,000 up
to two million pesos for each violation.

Providing incorrect information

In the same Commission Resolution, the PCC also imposed a

three-million peso 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% of the total

amount had been returned to Grab’s customers as of June 2021,
or more than five months after the deadline for the Commission’s
third 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% as of April last year, but still short of the full refund
that Grab had claimed.
Under Section 29 (c) of the Philippine Competition Act, the PCC
may impose upon any entity fines of up to one million pesos
where, intentionally or negligently, such entity supplies incorrect
or misleading information in any document, application or other
paper filed with or submitted to the Commission.

Alternative refund mechanism

Lastly, the Commission, in the same Resolution, directed Grab to

put in place an Alternative Refund Mechanism that would allow its
customers to claim remaining refunds, barring which the
company was ordered to convey the amount to PCC for
remittance to the National Treasury.

To ensure higher take-up of the refund, the PCC instructed Grab

to exhaust different platforms to inform customers about the
pending reimbursement.

###

REFERENCE:

publicaffairs@phcc.gov.ph

PCC Public Affairs Division