Mercado Livre files lawsuits against Apple in Cade and Mexico due to App Store rules

Mercado Livre said on Monday (5) that it had filed lawsuits with regulatory bodies in Brazil and Mexico against restrictions imposed by Apple on its app store related to digital service offerings and payments.

MercadoLibre, which operates a marketplace that posted $8.6 billion in sales in the last quarter, as well as a fintech, is challenging Apple rules that prevent apps from distributing third-party digital goods and services, such as movies, music , video games, books and written content, according to a statement.

“We are a marketplace for physical products. If you want to buy a phone, you go to Mercado Livre and buy it. We have millions of users and we are one step away from, for example, also being a marketplace for digital products”, said Paolo Franco Benedetti, the company’s senior antitrust director, told Reuters.

According to him, the rule prevents Mercado Livre from offering on its platform, in aggregate, video, music and book streaming services from other companies that compete with Apple in these segments.

Apple in Brazil did not comment on the matter and in the United States the company did not return a request for comment.

MercadoLibre said Apple’s practices had “serious anti-competitive effects”, preventing other companies from offering the distribution of digital products and decreasing the reach of rival services such as video and music streaming.

Mercado Livre, which operates the fintech Mercado Pago, also complains about the obligation imposed by Apple on developers who offer digital goods or services within applications to use only the payment processor of the American company. The Latin American marketplace said the rule raises costs for rivals and gives Apple access to sensitive competitive information on its competitors.

Companies that run app stores, such as Apple and Google, have been the target of lawsuits in several regions of the world, including the European Union and the United Kingdom, regarding restrictions on the use of external payment processors for in-app purchases and fees charged on these operations. .

Asked about Google, he said that the company “is not 100% comfortable with the company, but the focus right now is on Apple.” He added that Google’s app store has less strict rules in this regard. Sought by Reuters, Google had no comment.

Free Market processes were filed with the IFT (Federal Institute of Telecommunications) and Cofece (Federal Competition Commission), in Mexico, and Cade (Administrative Council for Economic Defense), in Brazil. Countries are the two main markets of Mercado Livre.

Benedetti said he was “100% confident” that the processes were correct. Mercado Livre is one of the largest companies in Latin America, with shares listed in the United States and a market value of approximately US$47.53 billion, according to data from Refinitiv.

The executive stated that through the complaint about digital services, Mercado Livre “is creating a new theory that Apple has a very strong monopoly on the distribution of digital content and that it operates so that no one can challenge it”.

The executive said that cases like this normally take about two to two and a half years to conclude, but that in the face of similar actions in other countries, this period may be shorter, as antitrust bodies take decisions imposed by peers as a reference.

The European Commission told Apple last year that App Store rules distort competition in the streaming music market. The regulations require the use of the app store’s own payment system and also prevent developers from informing users about other purchase options.

The company does not separate revenue from gaming and music services, but the general segment, which includes the App Store, Apple TV+, Arcade and Apple Music, had revenues of US$ 19.19 billion in the September quarter. The deal is seen as Apple’s engine of expansion.

Mercado Livre stated that it tried to contact Apple for an agreement before filing the shares, but that there was no success.

Benedetti said that there is the possibility of potential financial fines for Apple if the actions are successful, but that Mercado Livre’s objective is to remove the restrictions imposed by the North American company.