Fines are a major part of the punishment and deterrence in China’s enforcement of its Antimonopoly Law. China has been drafting antitrust fining guidelines in the past several years and the current version is believed to be close to final. One natural question is: will the antitrust fining guidelines lead to harsher antitrust fines in China’s future enforcement? We attempt to answer this question by assessing whether fine recipients in China’s historical antitrust investigations would have received higher fines according to the Draft Fining Guidelines. Based on a large number of historical non-merger case decisions issued by China’s antitrust agencies through September 2019, our quantitative analysis shows that higher future fines should be expected in the future. We also explore several factors that might explain why historical fines were below the level predicted by the Draft Fining Guidelines.
The Competition and Consumer Commission of Singapore (CCCS) issued an infringement decision in October 2018 after finding that the sale of Uber’s Southeast Asian business to Grab for a 27.5 per cent stake in Grab was in breach of the Competition Act (the ‘Act’).1 The CCCS found that the transaction resulted in a substantial lessening of competition in the provision of ride-hailing platform services in Singapore in breach of section 54 of the Act. A financial penalty of $6,582,055 was imposed on Uber, and a financial penalty of $6,419,647 was imposed on Grab. Other Directions were made. This was the first time that the CCCS had investigated and penalized an unnotified merger (although notification is not compulsory).
This followed the imposition of earlier Interim Measures Directions (IMDs) aimed at lessening the impact of the transaction on drivers and riders, while the investigation continued following the failure of the parties to notify the CCCS prior to completion.
The published decision contains a detailed analysis of the merger and its surrounding circumstances under the Act. It is heavily redacted in parts to maintain commercial confidentiality, so some of the commercial issues are more difficult to assess. Nevertheless, the CCCS took a particularly strong position in rejecting the arguments of the parties and ultimately imposed the financial penalties and extensive Directions to redress the anticompetitive outcomes arising from the merger which had been completed.
The transaction allowed Uber to exit the jurisdiction and the region but left it with a significant shareholding in Grab and a board position in that company. This has been a pattern of behaviour for Uber in earlier transactions, which raises some issues about the true nature and impact of the transactions on competition in the region