PCC fines Grab Philippines for delayed customer refund
THE Philippine Competition Commission (PCC) has imposed another P9-million fine on Grab Philippines after the delayed refund to its customers.
“The PCC has slapped a fresh P9-million fine on Grab Philippines amid its failure to fully refund its customers more than three years after the PCC first ordered the reimbursement,” the competition watchdog said in a statement on Monday.
According to the PCC, the fine is on top of the P63.7 million worth of penalties imposed on Grab since it acquired the local operations of Uber in 2018.
“To recall, the PCC cleared the acquisition at the time after Grab committed to addressing several competition concerns raised by the commission,” it added.
Citing a resolution dated Feb. 2 that was released to the media on Monday, the PCC said the amount imposed on Grab consists of a P6 million fine and another P3 million fine after the company failed to meet the commission’s orders.
The P6 million fine was imposed after the PCC issued three separate commission orders for Grab to return a total of P25.45 million to customers after the company failed to meet its price monitoring commitment. Each violation of the commission order represented a P2 million fine.
“The earliest commission order was issued in November 2019, followed by a second order a month later, and a third in October 2020. On each occasion, Grab was given a 60-day deadline to complete the refund from receipt of each order,” the PCC said.
“Under Section 29 b of the Philippine Competition Act, an entity which fails or refuses to comply with a ruling, order, or decision issued by the PCC shall pay a penalty of not less than P50,000 up to P2 million for each violation,” it added.
The PCC said the other P3 million fine was due to providing “incorrect and misleading information” in the compliance reports submitted by Grab in relation to the refund orders, in which the company claimed that “it had completed the refund.”
It said that Grab claimed to have complied with the commission’s three refund orders. Each violation of the refund order represented a P1 million fine.
“The PCC’s review found that only 24.16% of the total amount had been returned to Grab’s customers as of June 2021, or more than five months after the deadline for the Commission’s third refund order,” the competition watchdog said.
“It was only after the PCC issued a show-cause order in January 2022 when compliance to the refund order shot up to 73.80% as of April last year, but still short of the full refund that Grab had claimed,” it added.
The PCC has the power to impose a fine of up to P1 million on any entity it deems to have “intentionally or negligently supplied incorrect or misleading information in any document, application or other paper filed with or submitted to the commission” based on Section 29 (c) of the Philippine Competition Act.
Meanwhile, the PCC told Grab to implement an “alternative refund mechanism” that would let customers claim the remaining refunds.
“To ensure higher take-up of the refund, the PCC instructed Grab to exhaust different platforms to inform customers about the pending reimbursement,” the PCC said.
In response to the P9-million fine, Grab Philippines said in a separate statement that it remains committed to addressing the unclaimed fees.
“We are glad that the PCC has finally come to a decision on the disbursement mechanism for the remaining administrative fees — so we can put this matter to rest. At the same time, we are surprised at PCC’s decision to fine us — given that we’ve been proactively engaging with them for over a year with proposals for alternative mechanisms to disburse the remaining administrative fees,” Grab Philippines said.
Grab Philippines also said that it will be evaluating its legal options following the PCC’s announcement of the fine.
“As we have been forthcoming in explaining our legal position, and challenges to the PCC; and have been proactive in proposing alternative disbursement mechanisms, we will be evaluating our legal options regarding the P9 million fine,” the PCC said.
The company added that it would comply with the PCC’s order for an alternative refund mechanism.
“Grab Philippines has always been 100% committed to fully depleting the unclaimed admin fees, and have made every effort we can to do so,” the company said.
“We proposed alternative disbursement mechanisms and are surprised that the PCC made a decision in February 2023 without informing us — given that we’ve been regularly following up with them. Nevertheless, we will implement the order of the PCC for Alternative Refund Mechanism as required by the PCC Order,” it added. — Revin Mikhael D. Ochave