COFECE has opened an investigation into alleged abuse of dominance practices in the market for the payment processing of mobile applications and digital content

Mexico City, October 04th, 2022.

 

The Federal Economic Competition Commission (“FECC”) announced on September 30, 2022, that it has opened the investigation no. IO-005-2022 into possible abuse of dominance practices in the market for the development, distribution and payment processing of mobile applications and digital content, and related services.

Regarding this investigation, COFECE explained that it is analyzing the developers’ business models and the mechanisms through which payments are processed in app stores. It also explained that mobile applications are produced by developers and distributed to mobile device users, mainly through app stores. Developers generate revenue from their applications through different business models, such as: advertising, in-app purchases, and in-app downloads. Among the most common applications are those related to video games, entertainment, photography, and social networks.

On the other hand, COFECE pointed out that this investigation is relevant since millions of Mexicans download apps from mobile app stores, which in 2021 represented revenues of approximately 29 billion pesos for app developers.

The FECC may require economic agents in the relevant market to provide documents or information or conduct on-site inspections. In such cases, the Federal Economic Competition Law (“FECL”) may compel such economic agents to cooperate with the FECC and provide it with the requested information.

On the other hand, the announcement of the investigation aims to provide any interested economic agents with the opportunity of cooperating and providing any information it deems appropriate with relation to the investigated conduct or circumstances which may be contrary to the FECL. Therefore, any person or company involved in the relevant market that considers that it may have been affected will have the opportunity to contribute to the FECC’s investigation.

The Competition and Antitrust Practice of the firm will be pleased to provide any information regarding the content of this document.

 

S I N C E R E L Y,

 

Amilcar Peredo

peredo@basham.com.mx

 

Fernanda Garza

fgarza@basham.com.mx

 

León Jiménez

ljimenez@basham.com.mx

 

Juan María López

jmlopez@basham.com.mx