Mercado Libre And Amazon Under Investigation For Loyalty Deals

(CTN News) – Mercado Libre and Amazon have been targeted by Mexico’s Federal Economic Competition Commission (COFECE) due to the companies’ business practices.

As part of its investigation, the antitrust regulator is looking at how streaming services are integrated with loyalty programs, which is, despite the fact that this is beneficial to consumers, has raised concerns about the level of competition in the market.

In spite of the fact that streaming services are being separated from these platforms’ loyalty programmes, Amazon experts caution that this could spell trouble for users, particularly at a time when simply getting access to streaming services is becoming increasingly difficult.

In the past year alone, spending on streaming platforms has risen by 7.1%, a trend that is expected to continue despite price adjustments and industry shifts, including the introduction of advertising and mergers, which have changed the way this industry operates.

It is the alleged creation of barriers to competition that is at the core of Amazon COFECE’s scrutiny regarding the integration of streaming services with loyalty programs that is the crux of the organization’s investigation.

It has been reported that a source close to the investigation, speaking on condition of anonymity, said that the preliminary ruling does not provide any evidence as to why separating these services would be beneficial to the industry.

Rather, than Amazon affecting consumers directly, this may have an adverse effect on them, since more subscriptions for multiple streaming platforms could result in higher subscription costs.

It has grown to be one of the top Amazon platforms when it comes to free access to products such as Prime Video, Disney+, Star+, and Deezer, in addition to generous discounts on services such as VIX Premium, HBO Max, and Paramount +.

COFECE, however, believes that this is what is known as an “artificial strategy” designed to lock users into one or both companies’ memberships, in order to stifle any competition between the two.

In spite of the fact that the outcome of the investigation is still uncertain, its consequences for consumers are undeniable.

In the event that COFECE enforces a separation between streaming services and loyalty programs, consumers may find themselves faced with the prospect of being forced to foot the bill for services which they previously enjoyed as part of bundles.

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