Apple could benefit from the upcoming regulatory changes in Mexico and see its pending investigation on the app store come to a stop. On the other hand, Mercado Libre, who is the complainant in two investigations against Apple, and the target of an e-commerce study, may be the victim of a regulatory misalignment.
We continue to follow developments related to the article published on 13 October 2023, which highlighted Mercado Libre’s complaints against Apple in Mexico and Brazil over alleged anti-competitive practices. This issue has gained new relevance following a preliminary ruling by Mexico’s Federal Economic Competition Commission (COFECE) on 13 February 2024, issued as part of an investigation into barriers to competition in the country’s retail e-commerce market.
This ruling raises important questions about regulatory consistency and its potential implications for Mercado Libre’s ongoing complaints. These cases are currently under investigation by COFECE, the Federal Telecommunications Institute (IFT), and Brazil’s Administrative Council for Economic Defence (CADE). We now proceed to explain the above.
COFECE’s preliminary ruling identifies significant barriers to competition in Mexico’s retail e-commerce market, citing high market concentration, network effects, and logistical and informational restrictions. Meanwhile, Mercado Libre’s complaints against Apple focus on a different but related issue: Apple’s dominance over the iOS app ecosystem and its restrictions on payments and the distribution of digital goods.
While these cases address distinct aspects of competition, they share a common theme—the structural challenges that limit competitive dynamics in digital markets. Their resolution is unfolding in a shifting political landscape, where proposed reforms to merge COFECE and IFT into a single competition authority under the executive branch could reshape regulatory oversight and potentially impact the independence of competition decisions.
The existence of multiple cases raises several questions: Could this lead to regulatory contradictions? If COFECE ultimately determines that e-commerce platforms such as Mercado Libre operate in a market with limited competition, could this undermine Mercado Libre’s case against Apple? Might the structural remedies proposed in COFECE’s preliminary ruling weaken the arguments Mercado Libre has put forward in its complaints? Could this create internal conflicts within COFECE’s Investigative Authority and Board? Might its findings on e-commerce competition contradict the rationale underpinning its abuse of dominance investigation into Apple?
Furthermore, will COFECE’s preliminary ruling influence the investigations led by IFT and CADE? Could Mercado Libre’s standing as an affected party be reconsidered, leading to a broader assessment of its role within the digital ecosystem? These questions raise concerns about potential regulatory misalignment and may shape how IFT and CADE approach their inquiries into Apple’s market conduct.
These cases are unfolding amid political shifts in Mexico, where proposed constitutional reforms seek to merge COFECE and IFT into a single competition authority under the executive branch. This structural overhaul could fundamentally reshape competition policy, potentially jeopardising the independence of competition analyses and resolutions, which have so far been handled by autonomous regulatory bodies. Additionally, COFECE is handling two key cases—one on barriers to competition, currently in the evidentiary phase with expert testimonies, and another on abuse of dominance, still under investigation. Meanwhile, IFT is examining a third case involving abuse of dominance, alongside another case investigating potential relative monopolistic practices in the mobile operating system app store market and its related sectors. All of these investigations are advancing in an increasingly complex political and regulatory environment.
Without a doubt, in Mexico, COFECE, IFT, and any future regulatory authorities will face an undeniably complex challenge. We expect that the outcome of these cases will be pivotal in shaping digital market regulation across Ibero-America and will serve as a litmus test for whether competition policy can adapt to market realities while safeguarding fair competition. The key question now is whether regulatory authorities can navigate these tensions without compromising their own credibility and effectiveness.
