Yandex - Uber deal to be approved "in principle," regulator sees no three to competition - Artemyev
MOSCOW. Sept 28 (Interfax) - Russia's Federal Antimonopoly Service (FAS) does not see any reason not to approve a deal between Yandex and Uber to merge their online taxi hailing businesses in Russia and several other countries, FAS head Igor Artemyev said.
"...we also have a positive view of this deal, one can say that in principle it will be approved, but we need to see in what form," Artemyev said in an interview with Kommersant published on Thursday.
He said the regulator might issue a compliance order when approving the deal, but it will not concern a possible reduction of the taxi fleet or withdrawal from any region where the companies have a presence.
"We looked at the [market] shares. They are not vexing, since dozens of companies work on this market in Russia. And if there is a compliance order, it will concern certain particulars of market transparency, disclosure of information, possibly issues of consumer safety," Artemyev said.
FAS does not see threats to competition or growth of prices for services as a result of the deal. "If we establish that there is a threat to competition, we'll issue a compliance order, and they will have to carry it out. Thus we will avoid price growth. If, despite our order, price growth will take place, we'll simply issue a fine. But probably, if the market is competitive, neither one nor the other will be needed, because competitors on this market will get an advantage," Artemyev said.
In the event of unfair competition, for example regarding indirect price manipulation, FAS will impose a fine.
"This is called unfair competition. Article 14 provides for a separate penalty for this. If we find out, we'll investigate, penalize for this. This, by the way, does not at all depend on [market] share. You can have 1%, but if you're engaged in unfair competition, there's a fine for this," Artemyev said.
FAS earlier extended the duration of its consideration of the application to approve the deal by two months and said it planned to consult the competition authorities of other CIS countries regarding the Yandex.Taxi and Uber merger.
The companies submitted the application to FAS on August 21. It was reported that the application would be considered within 30 days from the date it was received, with the right to extend for another 60 days.
Yandex and Uber announced in July that they have agreed to merge their online ride hailing businesses in Russia and a number of neighboring countries. They value the merged business, which will also operate in Azerbaijan, Armenia, Belarus, Georgia and Kazakhstan, at $3.725 billion. Uber and Yandex will invest respectively $225 million and $100 million in the new company, in which Yandex will own a controlling 59.3% stake, Uber will own 36.6% and employees will own the remaining 4.1%. The company will be headed by Yandex-Taxi CEO Tigran Khudaverdyan.
The companies expect to close the deal in the fourth quarter. It has already been approved by the boards of directors of Uber and Yandex.