Mexico’s Federal Economic Competition Commission (COFECE) announced Friday that it found evidence that Amazon and Mercado Libre, which it said account for 85 percent of the seller market in Mexico, put up barriers that prevent seller mobility.
COFECE said, in particular, the platforms don’t offer up sufficient information about how featured offers are selected and noted that both companies give preferential treatment to sellers who use their respective logistics services. COFECE said these business practices limit sellers’ ability to compete and deflates the possibility of them moving between platforms to sell goods.
Related Stories
For the moment, COFECE has not issued any disciplinary mandates to either company, despite the fact that participants acknowledged the existence of seller barriers. The commission could have issue corrective measures on the issues it identified, but it said it lacked consensus to do so for the moment.
Fernanda Ramo, associate general counsel and head of legal for Amazon Mexico, said the fact that COFECE chose not to hand down corrective measures bodes well for the company.
“We are pleased with COFECE’s decision not to impose remedies, which underscores the competitiveness of Mexico’s retail landscape and absence of barriers to competition. We remain committed to serving customers and supporting Mexican businesses of all sizes,” Ramo said in an emailed statement.
COFECE said it hopes to encourage a more dynamic e-commerce market so that buyers and sellers alike can benefit from it.
In February, COFECE put out a preliminary report about e-commerce competition, which found that Amazon and Mercado Libre are dominant in the space, in part because of the practices it mentioned in its updated report. That report suggested that both companies be required to increase transparency around their featured offers or Buy Box functions; that they separate the services they offered through their respective loyalty programs, Prime and Meli+ and that they allow sellers to solicit third-party logistics players for delivery without unfair penalty or favoritism toward sellers that use the companies’ own logistics services.
The report was then opened for public comment, which drew a mix of opinions on how—and whether—the companies should face sanctions for their conduct. The Computer & Communications Industry Association (CCIA), at that time, said the watchdog should not impose sanctions on just two companies because their focus wasn’t broad enough and didn’t take traditional retail into account.
Krisztian Katona, vice president of global competition and regulatory policy for the trade group, said Friday that COFECE’s lack of formal sanctions is the right way forward.
“COFECE’s final report on Mexico’s e-commerce retail market rightly keeps the focus on protecting consumers from anticompetitive practices rather than imposing misguided remedies,” Katona said in a statement. “The previously proposed corrective measures risked harming consumers and shielding large traditional retailers, while ignoring the fierce competition between e-commerce platforms and brick-and-mortar stores in an omnichannel landscape that has delivered innovation, lower prices, and greater choice for Mexican consumers.”
Mercado Libre did not respond to Sourcing Journal’s requests for comment.
