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Mexican Watchdog Probes Amazon and Mercado Libre Over Loyalty Bundles

 |  April 23, 2024

The Federal Economic Competition Commission (COFECE) in Mexico has set its sights on tech giants Amazon and Mercado Libre. The antitrust regulator’s investigation centers on the integration of streaming services with loyalty programs, a strategy that, while beneficial to consumers, has raised concerns about competition in the market.

Specialists caution that the separation of streaming services from these platforms’ loyalty programs could spell trouble for users, particularly at a time when accessing such services is becoming increasingly expensive. Last year alone, monthly spending on streaming platforms surged by 7.1%, a trend expected to persist amid price adjustments and industry shifts, including the introduction of advertising and mergers.

The crux of COFECE’s scrutiny lies in the alleged creation of barriers to competition through the integration of streaming services with loyalty programs. According to a source close to the investigation who spoke on condition of anonymity, the preliminary ruling fails to justify how separating these services would benefit the industry. Instead, it may directly impact consumers, who could now face additional subscription costs for multiple streaming platforms.

Related: Amazon Denies Monopolistic Threat in Mexico Amid Regulatory Scrutiny

Mercado Libre, for instance, has been offering complimentary access to platforms like Prime Video, Disney+, Star+, and Deezer, alongside generous discounts on others such as VIX Premium, HBO Max, and Paramount +. However, COFECE views this as an “artificial strategy” designed to lock users into both companies’ memberships, thereby stifling competition.

The investigation’s outcome remains uncertain, but its implications for consumers are palpable. Should COFECE enforce the separation of streaming services from loyalty programs, users may find themselves footing the bill for services they previously enjoyed as part of bundled offerings.

Source: Expansion