E-commerce and financial services company Mercado Libre filed a complaint Monday against 36 banks in Argentina for “cartelisation and coordinated practices aimed at harming the fintech industry.”
“Mercado Libre filed a complaint before the National Commission in Defence of Competition (CNDC) against the main banks in Argentina for prohibited concentration, cartelisation and coordinated practices aimed at harming the fintech industry and its users,” the company said in a statement.
The company behind the dominant online payment firm Mercado Pago argues that its competitor, a digital wallet called MODO, jointly promoted by more than 30 banks, violates Argentina's antitrust laws because it “never notified or requested authorisation from the CNDC to operate jointly.”
“The 36 banks that are part of the MODO wallet form a cartel to avoid competing with each other with their own digital wallets,” the statement added.
"Instead of developing technology and generating better products, they decided to concentrate on MODO, which allows them to agree on commercial strategies and avoid competition for merchants that join their promotions and for the amounts of discounts and rebates they offer to their consumers," it concluded.
The company, headed by Marcos Galperín, is resisting a Central Bank decision to allow payments via QR in a unified way on any of the platforms.
On Monday, the banks reacted by branding the complaint an attempt to “limit competition in the sector."
"Mercado Libre is attacking the promotions of MODO and the banks, which today benefit millions of consumers and businesses when they make their payments with their wallets,” read a statement issued in response.
Santiago Eraso Lomaquiz, MODO’s director for legal, compliance and public affairs, complained that "instead of improving its promotions, Mercado Libre wants to block them with complaints, thus avoiding competing for better benefits for users."
Back in May, the banks behind MODO had denounced Mercado Libre before the CNDC for anti-competitive practices.
At the time, the banks had said that “Mercado Libre's abusive conduct” generated “negative effects for the market, disproportionately maximising its profits at the expense of reducing the value offer for users due to the lack of competition.”
Mercado Libre also enjoys tax benefits in Argentina. According to the company itself, it receives approximately US$100 million a year in tax exemptions as part of a law promoting the knowledge economy.
Currently positioned as the company with the highest market value in Latin America, Mercado Pago has around 60,000 employees and a market capitalisation of US$101.4 billion. It started as a platform for buying and selling products and then developed financial services such as Mercado Pago, which is extremely popular in Argentina and Uruguay.
– TIMES/AFP/NA
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