Mercado Libre Files Complaint Against Apple

E-commerce giant Mercado Libre has filed a complaint with antitrust regulators in its largest markets, Brazil and Mexico, against Apple for alleged anti-competitive practices and restrictions to distribute apps for iOS devices. Mercado Libre said that Apple had imposed several restrictions on the distribution of digital products and in-app purchases, including prohibiting apps from distributing third-party digital products and services. Given the increase of investigations on anti-competitive practices within the digital economy in just three years, Mexico’s Federal Economic Competition Commission (COFECE) and the Federal Telecommunications Institute (IFT) are in at least three disputes over the powers that each has to decide on antitrust matters.

Mercado Libre’s complaint against Apple was filed before Mexico’s IFT and COFECE and Brazil’s Administrative Council for Economic Defense (CADE). The e-commerce company stated that Apple’s actions prevent it from becoming a marketplace with third-party digital products distribution and services, such as subscriptions to movies, music, books and financial services, thus blocking a distribution channel for the e-commerce company. It also prevents the use of payment processing tools outside the Apple ecosystem, such as those included in Mercado Libre’s financial application Mercado Pago, according to Reuters. 

In the complaint, Mercado Libre criticizes Apple for forcing developers offering digital goods or services within apps to use the latter’s payment system and preventing them from redirecting buyers to their websites. “This clearly hurts their competitors, unless they themselves are integrated digital giants, who may even benefit from this artificial tilt toward integrated ecosystems,” Jacobo Cohen Imach, Senior Vice President of Legal and Public Affairs, Mercado Libre said in a statement. 

The complaint adds to a series of antitrust cases around the world. Apple usually requires developers to use its payment system, which helps it ensure a commission for apps on its platform. That tight control over app payments has attracted lawsuits and antitrust scrutiny, often focusing on Apple’s refusal to allow developers to steer users to other payment methods. So far, Apple has not commented on the lawsuit and the allegations. 

In Mexico, COFECE is responsible for settling economic competition matters for most markets and economic agents, while the IFT observes matters in the telecommunications and broadcasting markets. Currently, some question whether both authorities have the ability to solve competition problems of this kind, according to El Economista.