On Monday we learned that Uber was selling its Southeast Asia business to Grab and shutting down operations in Singapore, Thailand, Malaysia, Cambodia, Indonesia, Myanmar, Philippines, and Vietnam in two weeks.

Not so fast says the government of Singapore says the deal reduces competition in the market for “chauffeured personal point-to-point transport passenger and booking services.”

In a fairly unprecedented move (“This is the first time CCS has proposed an IMD on any business in Singapore”) they’re directing the parties to continue to operate separately and not to even share confidential information while it continues its investigation.

I’d love to see Uber continue to contest these markets, or at least Singapore. I’m not sure what it would look like to sell out their business in other markets in Asia but not Singapore, and if they did that how practical it is for Singapore to be ordering them to continue to do business there versus simply shutting down.

And here’s the thing. This transaction does reduce competition in ridesharing, an industry where there’s not significant barriers to entry though there’s an advantage to scale. The relevant question though is what is the market? Is it the market for transportation or only app-based on demand transportation? Do taxi cabs count as part of that market?

Just a few years ago there weren’t any players in app-based on demand transportation at all. One company started and that increased competition against incumbent transportation providers. Now removing one company from the market is an infringement. I think there are many ways to look at this.

I’d expect Uber and Grab to fight this regulatory decision aggressively.

(HT: Devid H.)