Egypt’s competition watchdog has warned Uber and Careem once again against the merger. The regulator, Egyptian Competition Authority, had first warned the two companies last month against a merger amid rumors about acquisition and merger talks between them. But this time, the authority has gone a step further and said that they could slap fines of up to 500 million EGP ($28 million) per infringement on each person relevant person (read: party) involved in the deal.
Dr. Amir Nabil, Chairman of the Egyptian Competition Authority, in a statement issued last week, said, “Uber and Careem are the only ride-hailing applications available in Egypt. Any anticompetitive interaction or harmonization of their business strategies including agreement to merge has the potential to cause serious and irrecoverable damage to Egyptian competition and consumers.”
Both the companies have also been asked to notify ECA and give it 60 working days to investigate the impact and not consummate merger unless authority approves it.Uber and Careem could face fines up to $28 million each in case of a merger, says Egypt's competition watchdogClick To Tweet
“The interim measures published today aims to safeguard the advantages of the competitive structure in such an important market and prevent any competition distortion that may inflict serious damages to consumers. The measures require Uber and Careem to notify the ECA if they intend to agree to merge, and not to consummate the merger unless and until the ECA determines they may do so,” the chairman noted.
The measures were approved by board of ECA, following an investigation that found out that Uber and Careem are each other’s closest competitors in Egypt — rides and drivers both benefit substantially from their competition and these benefits will be lost if they ceased to compete. The investigation also showed that the barriers to entry and expansion in this space are high.
The renewed warning comes less than a week after Careem raised $200 million in its latest funding round. There’s no guarantee that Careem won’t be acquired (or merge with/) by Uber eventually but after this latest funding round, there’s a strong likelihood that it won’t happen anytime soon. Still a good case for ECA to flex its muscles and they seem to be using it well (at least for the sake of making noise).
- Colabs raises $3 million seed to make it easy for entrepreneurs and freelancers to build and grow businesses in Pakistan - March 30, 2022
- FlapKap – A fintech revolutionizing e-commerce and SAAS growth in MEA – Launches and completes $1.2 Million fundraise - March 23, 2022
- Bazaar raises $70 million Series B led by Dragoneer and Tiger to build an OS for traditional retail in Pakistan - March 15, 2022