The digital wallet MODO denounced Mercado Libre before the National Commission for the Defense of Competition (CNDC) for anticompetitive abuse of its dominant position to the detriment of multiple market actors, including competitors, businesses and consumers. Among the multiple requests, MODO asks that “Mercado Pago cessation of interoperability denial and make your QRs interoperable”, a focus of conflict between both parties since last year.
“The abusive conduct of Mercado Libre, detailed in the complaint, generates negative effects for the market, disproportionately maximizing its profits at the expense of contracting the value offer for users due to the lack of competition,” he detailed. Santiago Eraso Lomáquiz director of legal, compliance and public affairs at MODO.
“The complaint is based on an obvious fact for any observer, the dominant position of Mercado Libre and Mercado Pago in their respective relevant markets. In itself, the dominant position is not bad and Mercado Libre has earned it through the provision of excellent quality services. A company can gain a dominant position in a market, and not be anti-competitive. Achieving a dominant position in a market is a legitimate and positive reflection of business success, when it is based on a high value offer for consumers. However, the Competition Law imposes a special duty of care – and its consequent responsibility – on companies that have a dominant position: not to distort competition. This is why those actions that may be innocuous by those who do not dominate a market are highly harmful when carried out by a player who has a dominant position, such as Mercado Libre. It is precisely about these abusive behaviors that MODO’s complaint is about,” remarked Santiago Eraso Lomáquiz, director of legal, compliance and public affairs at MODO.
The complaint
In the document presented to the CNDC, MODO denounces anti-competitive behavior framed in the figures of abuse of dominant position of an exclusionary type that violate Law No. 27,442 on the Defense of Competition (LDC), which correspond to:
● Refusal to incorporate competing digital wallets: Mercado Libre prevents the use of digital wallets competing with Mercado Pago in its marketplace, denying access to those who request to be payment initiators on the platform.
● Refusal to incorporate competing aggregators: MELI does not allow other aggregators and acceptors competing with Mercado Pago to provide collection services in its marketplace, tying merchant sales to their own payment services.
● Obligation to open an exclusive account in Mercado Pago: MELI requires buyers and sellers of the marketplace to have an account in Mercado Pago.
● Refusal to QR interoperability and payment gateway: Mercado Libre prevents competing Mercado Pago wallets from paying with their QR or payment gateway (e-commerce).
● Denial of digital wallet interoperability Mercado Pago: The company prevents Mercado Pago users from initiating card payments using competing acquirers and aggregators.
“It is not possible to ignore the fact that the dominant player in the market prevents with commercial requirements the application of the BCRA rule that imposes the interoperability of credit card payments in QRs. That is anti-competitive behavior in itself. A serious one. Even more so considering that this fact limits the freedom of users to use the wallet of their choice and pay with their cards in any QR, as happens when the physical card is used to pay at POS terminals,” MODO highlighted.
The request
Meanwhile, MODO requests the CNDC to issue a caution and order Mercado Libre to grant immediate access to its marketplace to Mercado Pago’s competing digital wallets, in particular, to positively respond to the request made by MODO to operate as a payment button within the Mercado Libre marketplace. In addition, it grants immediate access to its marketplace to Mercado Pago’s competing acquirers, aggregators and acceptors.
It requests that you cease the tied sale between the Mercado Libre marketplace and the Mercado Pago digital wallet, allowing merchants/sellers in the Mercado Libre marketplace to receive their sales charges directly into the bank or payment account of their choice. That the denial of interoperability immediately cease and make its QRs interoperable for both PCT and card payments, without discriminating or degrading the service for other wallets.
Finally, make your digital wallet interoperable so that Mercado Pago users can initiate card payments in payment methods offered by acquirers and/or aggregators competing with Mercado Pago.
“The reported behaviors have been visible to everyone for a long time, and are part of the daily life of those who use digital payments in Argentina. The lack of interoperability for Mercado Pago QR cards and the obligation to open accounts in Mercado Pago to operate with Mercado Libre (whether to pay or collect), for example, are facts that do not require further proof,” MODO highlighted.
