Amazon, Mercado Libre may threaten e-commerce competition, Mexican regulator says (updated)

MercadoLibre

13/02/2024 17:52

(Adds detail, background)
       MEXICO CITY, Feb 13 (Reuters) - Mexican antitrust
regulator Cofece on Tuesday said it had identified "possible
barriers" to competition in the e-commerce market, with Amazon
 AMZN.O  and Mercado Libre  MELI.O  together controlling more
than 85% of transactions and sales. 
    In a preliminary report shared in the official gazette,
Cofece said strong networks between users groups limit new
entrants and pose a "practically insurmountable challenge for
the expansion of the smaller players."
    Smaller retailers face high investments for the
technological tools, operating inventories and advertising
needed to compete with these giants, it said, adding that this
is exacerbated by the clustering of both buyers and sellers
around one marketplace, or "singlehoming".
    Smaller participants meanwhile "exert insufficient
competitive pressure on Amazon and Mercado Libre," Cofece said,
because they lack the number of buyers and sellers needed to
compete.
    Cofece recommended that the government orders the two retail
giants to implement a program of "corrective measures" within
six months. Those include greater transparency for service
providers and splitting off streaming services from marketplace
membership.
    U.S. behemoth Amazon entered Mexico in 2013 and launched its
marketplace there two years later. Mercado Libre, its South
American counterpart, entered Latin America's second-largest
economy in 1999 and has been expanding its financial services
offerings.

($1 = 17.1977 Mexican pesos)

 (Reporting by Raul Cortes; Editing by Anthony Esposito and
Sharon Singleton)
 ((sarah.morland@thomsonreuters.com;))