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Mercado Libre: competition in Mexico and financial results

Mercado Libre continues a competition investigation in Mexico, while increasing its revenues in Mexico by 54.4% in 2023 to US$1.979 billion.

On February 13, 2024, the Mexican antitrust authority (Comisión Federal de Competencia Económica or Cofece) notified Mercado Libre of its preliminary findings, conclusions and recommendations regarding competition in the e-commerce sector in Mexico.

This notification set forth proposed corrective measures on market operators that include MercadoLibre and, if confirmed, could require Mercado Libre to change certain aspects of some of its business practices in Mexico.

The preliminary report is the result of a general market study on barriers to competition in the e-commerce market, launched by Cofece in 2022, which will now be taken to a later stage of the process where Mercado Libre and other affected entities will be able to present their opinions and additional evidence.

Mercado Libre

The preliminary report and additional submissions will be analyzed by the full plenary of Cofece, in accordance with applicable laws and procedures, and the plenary will issue a final report.

Mercado Libre expects that it will take several months before there is a final report issued by the plenary of Cofece.

Mercado Libre expects that it will take several months before there is a final report issued by the full Cofece.

The final report may be subject to a special constitutional appeal before a specialized Mexican court and subsequent judicial decisions may be further appealed and reach the Mexican Supreme Court.

This additional judicial stage may take several years before a final decision is reached.

The outcome of these proceedings and the impact that any final remedial action may have on certain aspects of some of Mercado Libre’s business practices is uncertain.

Therefore, Mercado Libre said it cannot assure that they will not adversely affect its business, results of operations and/or financial conditions.

Mercado Libre is the largest online commerce ecosystem in Latin America based on unique visitors and orders processed, and is present in 18 countries.

In 2023, the company’s total revenues increased at a year-on-year rate of 37.4%, to US$14.473 billion, while its net income rose 105%, to US$987 million.

Some examples of Mercado Libre’s competitors in Mexico are: Amazon, Walmart, Linio, Vivanuncios and Coppel.

 

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