Mexico anti-trust regulator probes e-commerce abuses

E-commerce accounts for slightly more than 3% of all retail sales in Mexico, where shoppers fear credit card fraud and are often paid in cash
Shopping cart with cardboard boxes on laptop – Photo: File photo/EL UNIVERSAL
03/02/2018
08:16
Reuters
Mexico City
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On Thursday, Mexico’s anti-trust agency said that it is investigating “probable” monopoly practices in Mexico’s e-commerce market, which includes online retailers like Amazon.

Mexico's Federal Commission for Economic Competition (Cofece) said in a statement that it was investigating possible practices such as price discrimination by major players to crimp the growth of smaller competitors.

Cofece did not provide details on the investigation or name any companies but noted it had begun the investigation in late September.

Regulators around the globe have been wrestling with the impact of online giants Facebook, Alphabet Inc’s Google, and Amazon.com Inc. on local markets and this is Mexico’s first probe of internet businesses.

Sergio López, Cofece’s top investigator, said in a telephone interview that he was looking at stores that offer their own goods online as well as major e-commerce platforms.

“We are not going against anyone specifically, but we do have indications that there could be relative monopolistic practices being carried out in this market,” Lopez said.

Lopez said investigations by Cofece can take up to two and a half years. He could not project how long this investigation would take but said they were carrying out the probe with “rigor.”

“We are entering this market because it is growing exponentially,” he said.

Companies found guilty of monopolistic abuses could face fines of up to 8% of their revenues, he added.

E-commerce accounts for slightly more than 3% of all retail sales in Mexico, where shoppers fear credit card fraud and are often paid in cash. But there has been a scramble to gain market share among Mexico’s middle and upper classes.

Top players in the Mexican online e-commerce space include Amazon, Argentina’s MercadoLibre Inc., Wal-Mart de México, and more recent entrants such as Liverpool, a mid-to-high end retailer which operates the largest chain of department stores in Mexico, and appliance dealer and bank Elektra.

Electronic commerce, popularly known as e-commerce, is a term for the commercial transactions conducted electronically on the Internet.

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