MEXICO CITY (AP) — Mexican regulators have ordered on-line retailers Amazon and Mercado Libre to disclose their algorithms and to wall off TV streaming to keep away from stifling competitors.
Mexico’s Federal Commission on Economic Competition, recognized by its initials as COFECE, mentioned in a preliminary discovering late Tuesday that the 2 companies management 85% of on-line gross sales in Mexico.
It mentioned that market dominance created “an absence of real competitive conditions in the online retail market.” For Amazon, the discovering was the most recent in a string of regulatory challenges it has confronted in its international locations of operation.
The COFECE order additionally covers the most important Latin American on-line retailer, the Uruguay-based agency Mercado Libre.
The fee mentioned it had laid out corrective measures that would come with prohibiting Amazon from selling its Prime Video streaming service as an incentive for customers to purchase Amazon Prime memberships.
“They (streaming services) are an artificial strategy that attracts and retains customers, while at the same time reducing the likelihood that vendors and buyers will use alternative marketplaces,” the fee mentioned. “They also increase the cost of competition entering the market.”
The fee ordered Amazon and Mercado Libre “to separate memberships from streaming services, or other services such as games or music, that are not related to the use of the marketplace,” inside six months, with a attainable extension of one other six months.
“Both platforms are free to offer streaming, as well as any other service, but they cannot be offered as part of the same package of services as the marketplace. The streaming services must be offered and billed on a separate, standalone basis.”
The fee additionally ordered Amazon to tell distributors on the platform “of all the variables and factors that are taken into consideration in selecting promoted items, to encourage certainty and transparency.”
That apparently refers back to the standards utilized by on-line retailers in figuring out the prominence and order of search outcomes on their platforms.
The COFECE additionally ordered Amazon to not take the “logistics” technique — the style of delivering purchases — into consideration in figuring out the order or prominence of search outcomes.
The firms will likely be given three months, with a attainable extension of one other three months, to implement the requested adjustments to supply practices and publication of the algorithms.
Online sellers have complained previously that Amazon Prime forces distributors to make use of the corporate’s personal supply companies.
Amazon has pushed again towards allegations it situations Prime standing — which denotes quick delivery — on whether or not sellers use its achievement service, Fulfillment by Amazon.
“We are aware of this preliminary report and are closely collaborating with COFECE,” Amazon said in a statement. “Our pro-competitive practices in Mexico spur competition and innovation across the retail industry, and have produced greater selection, lower prices, and faster delivery speeds for customers and greater opportunities for sellers across the country.”
The fee didn’t specify what sanctions the businesses may face if they don’t comply. Federal regulation in Mexico says that monopolistic practices could be punished by fines of “up to 8% of a company’s revenues.”
In 2022, Amazon agreed to make major changes to its business practices to end competition probes in Europe, by giving customers more visible choices when buying products and, for Prime members, more delivery options.
In 2023, the U.S. Federal Trade Commission and 17 states filed an antitrust lawsuit against the e-commerce giant, arguing the Seattle-based company inflates prices and stifles competition in what the agency calls the “online superstore market” and within the subject of “online marketplace services.”
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Source web site: www.hindustantimes.com
