Reject the merger of Grab and Foodpanda

Southeast Asian food delivery platform Grab Holdings Ltd in March applied to acquire Delivery Hero SE’s Foodpanda operations in Taiwan, with the Fair Trade Commission (FTC) scheduled to announce its decision on Oct. 27.

On the surface, the deal is a business merger — but in substance, it involves personal data, national geospatial information and digital sovereignty. It cannot be assessed solely in terms of market share and price competition.

Grab has extensive and long-standing connections to Chinese capital. In 2015, Chinese ride-hailing firm Didi Chuxing and China Investment Corp, a sovereign wealth fund, invested in Grab. Grab invested in Chinese autonomous-driving firms WeRide and Momenta, and formed a joint venture with Ping An Good Doctor in 2018, integrating artificial intelligence (AI), identity, medical and payment data.

Grab signed a memorandum of cooperation with Huawei Technologies Co’s Petal Maps last year, and integrated electric vehicle systems with BYD Co and Guangzhou Automobile Group Co. It has worked with Ant Group Co on cross-border payments since 2016, deepening the partnership in 2023 through travel assistant Alipay+ Voyager.

Map data have national security implications. Through delivery workers’ GPS locations and images, Grab accumulates detailed, real-time local data that are far more valuable than static maps. Articles 7 and 14 of China’s National Intelligence Law require organizations and citizens to support and assist intelligence work. Even if Grab claims that its partnership with Huawei does not cover Taiwan, the nation has no way to verify whether data could be fully isolated from China following the acquisition.

Storing data overseas could render oversight ineffective. Grab claims that Taiwanese user data are stored in Singapore, but once data leave Taiwan, the government’s inspection powers under Article 22 of the Personal Data Protection Act (個人資料保護法) become difficult to enforce.

The government cannot verify whether data have been transferred to a third country, leaked or reused. Grab has suffered data breaches in Singapore involving account balances, license plates and home addresses. If the acquisition proceeds, the security of approximately 6 million consumers’ spending and mobility records, as well as transaction data, would be at stake.

Digital sovereignty is the foundation of a nation in the AI era. South Korea has restricted the export of high-precision map data on national security grounds since 2007, only beginning to ease the restrictions under some conditions in the past few years. Europe and the US have also strengthened controls on cross-border data flows. Those developments show that data sovereignty has become the core of national governance.

As a major tech power, Taiwan should do more to support domestic businesses rather than allow critical data to flow to overseas platforms with complex ties.

The acquisition poses risks to personal data, national geospatial information and digital sovereignty, outweighing any possible economic benefits. Article 13 of the Fair Trade Act (公平交易法) stipulates that “the competent authority may not prohibit any of mergers filed if the overall economic benefit of the merger outweighs the disadvantages resulted from competition restraint.”

The provision applies when a merger’s overall economic benefits outweigh the harm caused by reduced competition — a condition this case fails to meet.

The FTC should carefully weigh the risks and reject the acquisition.

Hsueh Hua-yuan is a professor in National Chengchi University’s Department of History and chairman of the Taiwan Association of University Professors.