Mexican regulator the Federal Economic Competition Commission (La Comisión Federal de Competencia Económica — COFECE) has proposed a series of measures that it says will prevent Amazon and Mercado Libre from abusing their dominant position in online marketplaces in the country, news agency AP reports.

COFECE noted that Amazon and Mercado Libre controlled 85% of online marketplace sales in Mexico and stated that this dominance created “an absence of real competitive conditions in the online retail market.”

The measures it has proposed include prohibiting Amazon from promoting its Prime Video streaming service as an incentive for consumers to become Amazon Prime subscribers. Mercado Libre offers a similar service — Mexico Meli+, which includes free shipping, Deezer for music streaming and Disney+ and Star+ for video streaming — that the regulator also wants to prohibit.

“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 commission said. “They also increase the cost of competition entering the market”.

COFECE recommended Amazon and Mercado Libre be required “to separate memberships from streaming services or other services, such as games or music, that are not related to the use of the marketplace” within six months, with a possible extension of another six months.

“Both platforms are free to offer streaming, as well as any other service, but they cannot be offered as a part of the same package of services as the marketplace. The streaming services must be offered and billed on a separate, standalone basis,” COFECE asserted.

The regulator also recommended that Amazon be prohibited from taking the “logistics” method (the manner of delivering purchases) into account in determining the order of search results. Online sellers have complained in the past that Amazon Prime forces vendors to use the company´s own delivery services.

If implemented, Amazon and Mercado Libre would have three months to comply with these measures, with the possibility of a three-month extension.

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