FTC approves Uber-Tmap joint venture… “Competitive pressure on Kakao T, No. 1, increases”

Input 2021.02.10 10:00

On the 10th, the Fair Trade Commission and US vehicle sharing service’Uber’ SK(034730)Approved to establish a joint venture with affiliated’Tmap Mobility’. On October 28 of last year, the two companies reported a business combination with the content of establishing a joint venture with a 51 (Uber) vs. 49 (Tmap Mobility) stake to operate vehicle calling services in Korea.

The Fair Trade Commission said on the same day that the two companies reviewed whether or not the competition was restricted, focusing on the overlapping domestic vehicle calling service market, and determined that there were no concerns about competition restrictions, and that it responded to the results on the 28th of last month.

Uber is a global vehicle sharing platform business operator, and in Korea, it provides vehicle calling services such as’Uber Taxi’ and’Uber Black’. Tmap Mobility SK Telecom (017670)This company was founded on December 30 last year by dividing the mobility business unit. T-map (T-map) taxi, T-map navigation, T-map parking, T-map public transportation, and T-map maps are provided.

The new joint venture is planning to operate a business by receiving a vehicle call service from Uber and Tmap Mobility. In addition, Tmap Mobility plans to provide the Tmap map service transferred from SKT to the joint venture.

In this screening, the Fair Trade Commission intensively looked into restrictions on competition such as ▲general taxis ▲taxi sharing platforms ▲map industry.

The FTC judged that the market concentration of the domestic vehicle calling service market before and after the merger was not significantly changed, and that there was competition pressure from general taxis. Competitive pressure refers to a virtuous cycle structure that induces technology development and price reduction as a certain competitive relationship is formed in a certain field.

In addition, through the combination of the two companies, the FTC is a strong leader in the taxi sharing service market. Kakao (035720)Considering the fact that substantial competitive pressure on T could be increased, it was considered that there was no concern about competition restrictions. This means that when a joint venture between the two companies is established and runs a business, new technology will be introduced and consumer welfare will increase by competing with Kakao T for market share.

The FTC also examined the possibility of restricting competition that could occur in the vertical aspect by receiving maps from the joint venture and related Tmap Mobility. Accordingly, it was judged that the possibility of blockade of sales ships by map service providers or blockage of map service purchase ships by vehicle calling service providers was not great.

An official from the FTC said, “This decision can be said to be meaningful in that it lays a foundation for promoting innovation competition in new industries such as vehicle call service.” “We plan to build a foundation for enhancing corporate competitiveness and revitalizing related markets by allowing it.”