Mexican regulators tell Amazon to wall off Prime TV, reveal its algorithms and open up delivery

Mexican regulators tell Amazon to wall off Prime TV, reveal its algorithms and open up delivery

14 Feb    AP, Finance News, PMN Business

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MEXICO CITY (AP) — Mexican regulators have ordered online retailers Amazon and Mercado Libre to reveal their algorithms, and to wall off TV streaming to avoid stifling competition.

Mexico’s Federal Commission on Economic Competition, known by its initials as COFECE, said in a preliminary finding late Tuesday that the two firms control 85% of online sales in Mexico.

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It said that market dominance created “an absence of real competitive conditions in the online retail market.” For Amazon, the finding was the latest in a string of regulatory challenges it has faced in its countries of operation.

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The COFECE order also covers the biggest Latin American online retailer, the Uruguay-based firm Mercado Libre.

The commission said it had laid out corrective measures that would include prohibiting Amazon from promoting its TV streaming service as an incentive for consumers to buy Amazon Prime memberships.

The commission also ordered Amazon to inform vendors 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 to the criteria used by online retailers in determining the prominence and order of search results on their platforms.

The COFECE also ordered Amazon not to take the “logistics” method — the manner of delivering purchases — into account in determining the order or prominence of search results.

Online sellers have complained in the past that Amazon Prime forces vendors to use the company’s own delivery services.

Neither company immediately responded to messages seeking reaction to the order, which can be appealed.

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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 in the field of “online marketplace services.”

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