Fair Trade Commission Approves Uber and Tmap Joint Venture Establishment

[Sejong=Asia Economy Reporter Kwon Haeyoung] On the 10th, the Korea Fair Trade Commission approved the establishment of a joint venture between the U.S. ride-sharing service 'Uber' and SK affiliate 'Tmap Mobility.' The two companies had reported a business combination last October to establish a joint venture in South Korea to operate a ride-hailing service with a 51 to 49 shareholding ratio.

The Fair Trade Commission announced that it reviewed whether the business combination would restrict competition, focusing on the overlapping domestic ride-hailing service market of the two companies, and judged that there were no concerns about competition restriction, responding with the review results on the 28th of last month.

Uber is a global operator of ride-sharing platforms and related businesses. In South Korea, it provides ride-hailing services such as Uber Taxi and Uber Black. Tmap Mobility is a company established by SK Telecom in December last year through a physical division of its mobility business division. It offers services including Tmap Taxi, Tmap Navigation, Tmap Parking, Tmap Public Transportation, and Tmap Maps.

The new joint venture plans to take over the ride-hailing services from Uber and Tmap Mobility and operate the business. Additionally, Tmap Mobility will provide the Tmap map service, transferred from SKT, to the joint venture.

The Fair Trade Commission focused its review on potential competition restrictions in general taxis, taxi-sharing platforms, and the map industry.

The Commission judged that the change in market concentration in the domestic ride-hailing service market before and after the combination is not significant and that competitive pressure from general taxis exists. Competitive pressure refers to a virtuous cycle structure where a certain competitive relationship in a specific field induces technological development and price reductions.

Furthermore, the Commission considered that the combination of the two companies could enhance substantial competitive pressure on KakaoT, the dominant number one player in the taxi-sharing service market, and thus saw no concerns about competition restriction. This means that if the joint venture is established and operates, it will compete with KakaoT over market share, leading to the introduction of new technologies and increased consumer welfare.

The Fair Trade Commission also examined the possibility of competition restriction arising vertically from the joint venture receiving map supplies from Tmap Mobility. It judged that the possibility of map service providers blocking sales channels or ride-hailing service operators blocking map service purchase channels is low.

A Fair Trade Commission official stated, "This decision is significant in laying the foundation for promoting innovative competition in new industries such as ride-hailing services," adding, "We will foster a foundation where corporate competitiveness can be enhanced and related markets can be revitalized by allowing business combinations that promote innovation while posing no concerns about competition restriction."

This content was produced with the assistance of AI translation services.