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29 August 2019
The Competition Act 2010 prohibits undertakings from entering into a merger which will substantially reduce competition by creating or strengthening a dominant position in the relevant market.
Further, the Competition Commission requires undertakings to apply for pre-merger clearance of an intended merger where they intend to acquire the shares or assets of another undertaking or where two or more undertakings intend to merge the whole or part of their businesses and the pre-merger thresholds specified by the commission are met.
The Competition Commission recently decided on a joint pre-merger application by Uber Technologies, Inc and Careem Inc, notifying the commission of Uber's acquisition of Careem through Uber's subsidiary Augusta Acquisition BV.
The applicants considered the ridesharing services market to be the relevant product market and Islamabad, Karachi, Lahore, Faisalabad, Gujranwala, Hyderabad, Multan and Peshawar to be the relevant geographic markets. They claimed that ridesharing services are part of the broader local, urban transport market, which covers all means of transporting people (eg, rickshaws, taxis, buses and minibuses). As such, the applicants' claimed that their combined market share in the overall urban transport market would not result in a dominant position.
The Competition Commission disagreed with the applicants' view, observing as follows:
The Competition Commission concluded that based on its assessment of the relevant market, the proposed merger was likely to substantially weaken competition through the creation or strengthening of a dominant position in the relevant market. Thus, the commission initiated a Phase II review.
For further information on this topic please contact Sanaya F Vachha at Vellani & Vellani by telephone (+92 21 3580 1000) or email (firstname.lastname@example.org). The Vellani & Vellani website can be accessed at www.vellani.com.
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