PCC slaps Grab with P23-M fine; asks to refund riders P5M
The Philippine Competition Commission on Monday ordered Grab Philippines to refund P5.05 million to its affected riders after it was slapped with P23.45 fine for overcharging.
"The PCC has imposed a total fine of P23.45 million on Grab for breaching its pricing commitments during the 1st to 3rd quarters of the initial Undertaking," PCC chairperson Arsenio Balisacan said in a press briefing.
He said the breakdown for the fine was P11.3 million which has been imposed for the first quarter, P7.1 million for the second quarter, and P5.05 million for the third quarter.
"To kick off the refund system, the disgorgement mechanism shall be applied on the third quarter fine, with Grab being ordered to refund P5.05 million to affected riders," said Balisacan.
Aside from the said fine, PCC will also continue to monitor the ride-hailing company due to continues lack of competitive constraints such as its prevailing market dominance, its ability to unilaterally increase prices profitably, its existence of significant barriers to entry, and its inadequacy of service quality to the detriment of the riding public.
Because of this, Balisacan said there was a need to re-negotiate these commitments and install new mechanisms to effectively address the persistent impact of a virtual monopoly on a sector imbued with public interest.
"Last November 1, Grab’s Extended Undertaking had taken effect and will be enforced for 1 year, with an extended lookout for exclusivity deals for 3 more years to give way for new players to effectively compete on a level playing field," the PCC chair said.
"This Extended Undertaking puts in place more streamlined commitments and metrics on pricing, service quality and non-exclusivity, which Grab is compelled to abide by," he added.
As a way to guard against abuse of market power and encourage new players to enter and grow in the ride-hailing market, Balisacan said Grab offered new and old commitments such as non-exclusivity, service quality, and price-related.
If Grab violates the said commitment, it will be fined with P2 million per breach.
"While Grab’s commitments signal its willingness to behave within a competitive space and in accordance with the competition law, the PCC will keep a watchful eye on potential violations," Balisacan said.
"The PCC stands to guard against any breach of the Extended Undertaking through an appointed impartial third-party trustee to independently monitor Grab on its commitments. Violations will subject Grab to fines of up to P2 million per breach, or even the nullification of the decision conditionally clearing the transaction," he added.
PCC's monitoring started after Grab bought its rival Uber in the whole Southeast Asia last March 2018 which it found to likely result in substantial lessening of competition in the ride-hailing market.
"We hope that with the commitments set out in the Extended Undertaking, the riding public will be protected from the threat of monopolistic behavior. The call for more viable players remains an option as a way to let real competition take place on the roads?as it is in the markets," said Balisacan.
This was not the first time that Grab was fined by PCC. Last January, the company was ordered to pay P6.5 million for submitting "inconsistent, incorrect, and deficient" voluntary commitment and in 2018, it was fined P16 million for "undue difficulties" during a review of its merger agreement. Ella Dionisio/DMS