Uber sold its Southeast Asian business to bigger regional rival Grab in March in exchange for a stake in the Singapore-based firm, marking the US firm's second-biggest retreat from an Asian market.
But the deal has invited regulatory scrutiny in the region, with the Competition and Consumer Commission of Singapore (CCCS), in a rare move, launching a probe into the deal, days after the transaction was announced.
The commission said on Thursday it proposed the fines because Uber and Grab carried out the transaction despite having anticipated potential competition concerns, leading to lesser competition in the sector in Singapore.
This is the first time the commission will impose fines on a merger transaction. The CCCS said it will consider the companies' representations before it finalises the actual amount of fines.
Grab and Uber did not have an immediate response.
CCCS has also proposed measures to address the lessening of competition, such as removing exclusivity obligations on drivers who use Grab's ride-hailing platform as well as its exclusivity arrangements with taxi fleets.
The commission also proposed that Grab maintain its pre-transaction pricing algorithm and driver commission rates until competition is revived in the market.
CCCS has invited public feedback on the proposed remedies.
It said it may require the parties to unwind the transaction unless the feedback confirms that any of the proposed remedies, or any further remedies, are sufficient to address the competition concerns, and are implementable in practice.
© Thomson Reuters 2018