COFECE, Mexico’s antitrust regulator, has ordered Amazon and MercadoLibre to remove streaming services from their Prime and Meli+ packages. The regulator argues that these services are distorting the market and preventing competition.
The order includes Prime Video, Disney+, Star+, HBO Max, Deezer, and Prime Gaming. Amazon and MercadoLibre have six months to comply with the order.
COFECE also ordered the two companies to make their algorithms more transparent and to stop giving preference to products that are managed and shipped by their own logistics networks.
The regulator’s decision comes as Amazon and MercadoLibre are facing increasing competition in Mexico. Walmart, for example, has recently launched its own e-commerce marketplace in the country.
Amazon and MercadoLibre have both said that they will comply with COFECE’s order.
Amazon:
“We are aware of this preliminary report. We have collaborated closely with COFECE and will continue to do so. The pro-competitive practices with which we operate in Mexico promote competition and innovation in the retail industry, and have resulted in greater selection, better prices and faster deliveries for customers, as well as greater opportunities for sellers nationwide.”
MercadoLibre:
“Today, February 13, the Federal Competition Economic Commission (COFECE) issued a preliminary opinion on barriers to competition in the retail e-commerce market in Mexico. This opinion, which does not constitute a final decision, assesses the existence of certain barriers to competition in the investigated market and proposes some measures to remedy them.
Mercado Libre is currently analyzing this preliminary opinion and will adhere to the applicable procedure and regulatory framework, including cooperating, as it always has, with the corresponding authorities.
It is important to note that a process will begin based on the published opinion and once the file is complete, the COFECE plenary will decide and issue a resolution. As this is not an investigation into monopolistic practices, the resolution would not imply economic sanctions.
At Mercado Libre, we have been promoting free competition since our inception 25 years ago, and we will make available what is necessary to expedite the necessary understanding during the process that derives from this opinion, always prioritizing the experience of our users.”
A Customer’s Perspective
While COFECE’s decision aims to increase competition in the e-commerce landscape, I hold a different opinion. As a consumer, I value the convenience and cost-effectiveness of all-in-one memberships. Bundling services like fast shipping, competitive prices, music/video streaming, and even cloud storage (like Amazon Photos) fulfills many of my needs.
Companies like Google offer services such as Google One, which incorporates premium features and recently announced the integration of AI-powered benefits. The advantage of consolidated memberships is clear: I save money and simplify my life by not having to acquire multiple subscriptions.
Ultimately, I believe that consumer choice should be a driving force in the market. If bundled memberships provide value and convenience, companies should be allowed to offer them.
The Future of E-commerce in Mexico
The decision by COFECE is a significant development in the Mexican e-commerce market. It remains to be seen how the two companies will comply with the order and how it will impact their businesses. In my opinion, this could potentially lead to fragmented services and an overall less convenient experience for the consumer.
FAQ
COFECE ordered Amazon and MercadoLibre to stop bundling streaming services within their Prime and Meli+ memberships.
COFECE believes the inclusion of streaming services distorts the e-commerce market and hinders fair competition.
The ruling impacts Prime Video, Disney+, Star+, HBO Max, Deezer, and potentially Prime Gaming.
The companies must increase transparency in their algorithms and stop favoring products handled by their own logistics networks.
No, the investigation was not about monopolistic practices, so there won’t be economic sanctions.
