The Plenary Session of the Federal Economic Competition Commission (Cofece) did not find sufficient evidence to hold technology giant Google accountable for abusing market power in the digital advertising business in Mexico, and therefore ordered the case against it to be closed, the antitrust body reported this Friday.
The ruling concluded a process that, in its various phases, took almost five years, as the case was opened on August 10, 2020, when the Cofece Investigative Authority (AI) announced the start of the investigation.
The investigation was concluded on June 21, 2023—the AI had exhausted its maximum investigation period of almost three years—and on November 8 of that year, Cofece announced that it had summoned the investigated economic agent, after determining that there was sufficient evidence to charge him.
While Cofece did not reveal the name of the accused, a Google spokesperson confirmed to El Economista that the company had been charged, stating at the time that “We will continue working with Cofece to answer their questions and share details about how our systems work.”
The summons triggered the trial process, which lasted approximately a year and a half.
Formally, the IA accused Google of engaging in relative monopolistic practices, which occur when a dominant company abuses its market power.
Specifically, Google was accused of engaging in the practice of tying sales, which involves tying the sale of one product to the purchase of another.
The hypothesis was that the design of Google’s platform for buying online advertising conditioned the joint contracting of two advertising services, which could result in an undue advantage over competitors in the digital ecosystem.
The investigation focused on two advertising products offered by Google: 1) advertising services on its search page; and 2) advertising services on third-party websites.
After analyzing the evidence provided by the IA and Google’s defense, the Cofece Plenary determined that users could purchase advertising on Google’s search engine without the obligation to purchase advertising on third-party websites.
The Cofece Plenary observed that many users, for strategic or commercial reasons, voluntarily chose to purchase one advertising service or the other.
“After a comprehensive analysis of the evidence based on technical, economic, and legal criteria, the Plenary concluded that there is no real obligation or imposition on the part of Google on users to purchase both services. Therefore, this is not a tied sale, and no violation of the law has been established,” Cofece reported this Friday.
Of the seven members of the Cofece plenary, only five voted, as Commissioner President Andrea Marván Sealtiel and Commissioner Ana María Reséndiz were excused from hearing the case.
The former because she was working at the AI when it was investigating Google, and the latter because she had a conflict of interest with the accused.
Million-dollar fine imposed
Had it been found guilty, the company could have been fined up to 8% of its revenue.
The case against Google was perceived as one of the most important brought by Cofece in recent years, in light of the similar accusations the company has faced in other jurisdictions.
The outcome of the process also occurs as Cofece experiences its final months before dissolving and transferring its functions to a new authority, still being defined, after a constitutional reform enacted at the end of last year ordered the dissolution of a group of autonomous bodies of the Mexican State.
Source: eleconomista
