ANTITRUST

Mexico Regulators ‘Looking Into’ eCommerce ‘Monopolies’

Mexico-remittances-fintechs

Mexico’s eCommerce market is being investigated by the country’s antitrust agency, which on Thursday alleged potential monopoly tactics aimed at hurting smaller rivals.

According to a report in Reuters, the Federal Economic Competition Commission (COFECE) issued a statement in which it said it was looking into claims of price discrimination that harmed competitors. The government agency wouldn’t offer more details or name the companies being investigated, although it did reveal the inquiry has been ongoing since the end of September.

“This process should not imply any prejudgment of the responsibility of any economic agent,” the statement said, also noting that companies that are found guilty of monopoly practices may be hit with a fine as high as 8 percent of revenues. Reuters noted that the country’s leading eCommerce players include Amazon, Mercado Libre of Argentina and Walmart de Mexico.

Currently, eCommerce is a tiny fraction of retail sales in Mexico – only slightly more than 3 percent, Reuters reported. Most consumers fear credit card fraud and pay with cash. PYMNTS research found that roughly half of all Mexican households do not have access to a bank account and, as a result, rely solely on cash. The same research estimates that cash use in the country will grow at a CAGR of 20.4 percent between 2016 and 2021.

In October, Amazon launched a new cash payment service in the country in an effort to expand its reach in Mexico and to compete with Walmart de Mexico, also known as Walmex, along with other retailers pushing Mexican consumers to shop online. Amazon debuted its Mexico-based site two years ago and is now the country’s third-largest online retailer. Even so, the company’s Mexico sales of $253 million last year were well behind the market leader, Argentina’s MercadoLibre, Inc., and only slightly above Walmex’s online revenues.

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