THE Philippine Competition Commission (PCC) has ordered Grab Holdings, Inc. and MyTaxi.PH, Inc. to distribute the balance of P19.3 million in refunds to eligible users by April 22.
The refunds were ordered as part of the penalty for violating a price monitoring commitment.
In a statement on Monday, the competition regulator said that only P6.15 million of the P25.45 million penalty earmarked for return to Grab passengers has been claimed.
“After reviewing the compliance reports for previous penalties, the PCC found that only 24.1% of the total refund has been claimed from Grab by eligible passengers as of June 15, 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,” the commission said.
According to the PCC, Grab has until April 22 to distribute the full refund to users, adding that the money should be credited via GrabPay wallet without any action required to claim the refund.
“The penalties are in the form of a refund to remind Grab that every pricing or booking violation committed against passengers shall be paid back to passengers. Grab should immediately release the refunds and continue to adhere to its commitments,” PCC Chairman Arsenio M. Balisacan said.
Grab has incurred penalties from the PCC worth P63.7 million since 2018 due to violations of the company’s price and service quality commitments. In late 2019, the PCC penalized Grab and told the company to return a portion of its commissions to the passengers after violating the 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,” the commission said.
The PCC said Grab’s takeover of Uber’s Philippine operations in 2018 raised competition concerns, with Grab subsequently compelled to behave as if it had a rival in the market. Some of Grab’s voluntary commitments included an undertaking not to deviate substantially from its pricing practices before the acquisition.
However, the PCC found during the monitoring period that Grab’s pricing had breached its commitments, resulting in penalties.
“Following its acquisition of Uber, Grab’s commitments were first issued in 2018, subject to a one-year monitoring period. The commitments were updated and monitoring was extended until 2023 due to the remaining competition concerns. PCC underscores that the penalty shall be paid by Grab and shall not be passed on to its drivers or passengers,” the commission said.
Asked to comment, Grab Philippines said in a statement that it remains fully committed to adhering to the undertaking, adding that it is working with the PCC to ensure that the remaining fee is redeemed by all eligible passengers.
“Grab Philippines has complied with the disbursement order of the PCC, and has disbursed the full administrative fee in a manner consistent with the agreed mechanics with the PCC. Eligible passengers must redeem their portion of the fine through the GrabRewards Catalog within the Grab App,” the company said.
“Since the first order directing Grab Philippines to disburse the administrative fees to eligible passengers last Nov. 14, 2019, Grab Philippines has been proactively monitoring the redemption. Immediately upon its receipt of the PCC Order, Grab Philippines has outlined to the PCC its suggested measures to address this situation and has been eagerly awaiting the PCC’s response,” it added.
Grab contends that customers need to complete the basic know-your-customer (KYC) process required by the Bangko Sentral ng Pilipinas (BSP) before getting the refund.
“Eligible passengers who have not yet completed their basic KYC are required to complete this BSP-mandated process prior to redemption. Grab cannot credit their GrabPay Wallet without completion of basic KYC as this is a regulatory requirement of the BSP,” Grab said.
“Grab Philippines has yet to receive the final decision of the PCC on the recommendations for those eligible passengers lacking the mandatory KYC, but we would like to reassure our kababayans that we will continue to work with the competition commission to ensure that the remaining administrative fee amount is fully-redeemed — and focus our efforts in helping the Philippine economy recover,” it added.
The PCC’s Mr. Balisacan said the measures are in place to stop Grab from “exercising monopolistic behavior due to its unchallenged market power.”
“Through the years, the commitment measures are meant to be temporary in disciplining Grab while waiting for the market to mature with new major players. A more permanent pro-competition solution here is to open the market to more transport network companies that can truly rival Grab on the same level,” Mr. Balisacan said. — Revin Mikhael D. Ochave
