Last Thursday, the Malaysia Competition Commission (MyCC) proposed to impose a fine of RM87 million on e-hailing company Grab for abusing its dominant position by preventing its driver-partners from promoting and providing advertising services for its competitors.
While any action taken by the authorities against what is deemed anti-competitive is laudable, the question is, is this issue big enough for MyCC to act upon?
When Grab acquired Uber Inc’s Southeast Asian operations in March last year, many warned that the e-hailing company would dominate the industry. The merger was closely scrutinised in Singapore, Indonesia and the Philippines by their respective competition commissions for the very same reason.
Holding a dominant position is not an offence in itself but abusing the position is. We are not saying that Grab has abused its dominant position in Malaysia but there have been complaints that its fares have increased significantly so that the service is no longer affordable to the average commuter. Commuters consider this to be the bigger issue here since Grab controls 80% of the market, according to unofficial estimates.
First and foremost, MyCC and the government should update the Competition Act as it currently does not cover mergers and acquisitions. The Act and MyCC have to be strengthened to protect public interest.