Mexico’s antitrust watchdog is set to deliver a crucial decision by June 17 on whether Google has abused its dominance in the country’s digital advertising market, a move that could result in an unprecedented fine of up to 8% of the tech giant’s annual revenue.
The Federal Economic Competition Commission (Cofece) accuses Google of establishing a de facto monopoly in Mexico’s online advertising market, which could lead to a massive fine. According to public documents, the watchdog has requested Google’s financial information from tax authorities and held an oral hearing with the company last month.
A decision against Google would not only be a significant setback for the tech giant but also mirror its antitrust woes in the United States. In 2022, a U.S. district judge ruled that Google holds an unlawful monopoly in online search and related advertising. The U.S. Justice Department has since sought to break up Google’s dominance by forcing it to share search data and cease payments to other companies.
The Cofece ruling is expected to be the largest ever imposed on Google in Mexico, with the tech giant facing fines of up to 8% of its annual revenue. While Google does not release detailed revenue results by country, the company’s parent Alphabet reported $20.4 billion in revenue from Latin America last year.
The case has been ongoing since 2020, with Cofece issuing a summons to Google and holding several hearings. In response to anticompetitive investigations into Google, Lina Ornelas, Director of Public Policy and Government Relations at Google Mexico, said that being big isn’t bad, but rather it’s about not taking out competitors with products.
The Mexican government has also clashed with Google over its decision to change the name of the Gulf of Mexico to “Gulf of America” on Google Maps. The suit argues that Google does not have the authority to rename the body of water.
Lawmakers from the ruling Morena party have called on Cofece to resolve the long-standing case, which has been ongoing for over two years. If Cofece rules against Google, it would be a significant blow to the tech giant’s reputation and operations in Mexico.
Source: Reuters
