CONCANACO-SERVYTUR to Collaborate with Amazon, Mercado Libre

The Confederation of National Chambers of Commerce, Services, and Tourism (CONCANACO-SERVYTUR), has expressed willingness to collaborate with Amazon and Mercado Libre to promote good practices in e-commerce, safeguarding consumer interests and fostering diversity and innovation in the digital realm after The Federal Economic Competition Commission (COFECE) monopoly probe.

COFECE has set its sights on retail e-commerce giants Amazon and Mercado Libre, accusing them of monopolizing 85% of Mexico's e-commerce market. In a preliminary determination, the commission asserted that these platforms stifle competition, hindering the entry of new players and impacting both sellers and buyers. 

COFECE's inquiry identifies significant barriers to entry, including high market concentration and network effects that confer inherent advantages to larger platforms. The commission also points to barriers arising from the substantial investments required to develop new platforms, further exacerbating the competitive landscape.

To address these concerns, COFECE proposes corrective measures aimed at Amazon and Mercado Libre. These measures include disassociating streaming services from their loyalty programs and enhancing transparency in offer management and logistics solutions. Additionally, COFECE urges these platforms to modify their criteria for assigning labels like "Prime" or "Full" to sellers, ensuring fairness and preventing preferential treatment based on logistic partnerships.

“Supporting small businesses promotes confidence in the digital market, essential for their long-term growth and development. Therefore, the future of the digital economy is built by actively supporting small businesses, along with regulatory measures that promote competition and protect consumer interests,” said Octavio de la Torre, consensus candidate for the presidency, CONCANACO-SERVYTUR. According to the candidate, by implementing the changes suggested by the COFECE with the two giants, the e-commerce ecosystem would benefit all parties. 

Amazon and Mercado Libre in Mexico's digital landscape serve as vital channels for millions of users and businesses, with over 500 companies participating in the Ruta Digital program. MiPyMEs (Micro, Small, and Medium-sized Enterprises) in Mexico generate revenue through these platforms and have contributed 5.9% of the country’s GDP in 2022. 

In the United States, Amazon faces legal challenges as well, as it is accused of directing consumers towards higher-priced items and concealing lower-priced alternatives. The complaint alleges that Amazon's algorithm prioritizes higher-priced options, potentially misleading consumers and violating consumer protection laws.

"I believe it is a healthy process; I am not concerned about that preliminary ruling. On the contrary, we are collaborating, in dialogue with the authority, and in this instance, since the market was defined as marketplaces, not retail, which is where we are actually competing," said David Geisen, General Director, Mercado Libre Mexico.