MercadoLibre Targets Banks in Complaint With Argentina’s Competition Regulator

MercadoLibre has filed a complaint with Argentina’s competition regulator, alleging that Argentine banks are using an anti-competitive tactic against the company’s FinTech arm, Mercado Pago.

In its legal complaint filed with the country’s National Commission in Defense of Competition, MercadoLibre accused the banks of “illegally concentrating” under one payments platform, Bloomberg reported Monday (Aug. 26).

“The 36 banks that are part of the MODO wallet make up a cartel to avoid competing between its own digital wallets,” MercadoLibre said, per the report.

This filing comes about three months after banks — under their shared platform MODO — filed a legal complaint alleging anti-competitive strategies by Mercado Pago, according to the report.

MODO responded to MercadoLibre’s complaint Monday, rejecting the company’s accusations and saying that the firm is trying to block competition with complaints so it can “continue abusing its dominant position,” per the report.

In MODO’s complaint filed in May to Argentina’s National Commission in Defense of Competition, it accused MercadoLibre’s payment platform of forcing shoppers to fulfill online purchases using Mercado Pago.

“MercadoLibre’s abusive conduct, detailed in the complaint, creates negative effects for the market, disproportionately maximizing its earnings,” MODO wrote in the complaint, adding that it’s confident authorities will investigate “one or more anti-competitive practices,” forcing an “in-depth analysis of the payments and digital wallet ecosystem.”

Responding to the complaint, MercadoLibre said in May that it complies with relevant regulation and that MODO’s accusations are “absurd.”

“Perhaps banks should compete with each other, innovate, develop products and pay off balances, as banks do in the rest of Latin America, instead of colluding and blaming Mercado Pago without merit,” the company said at the time.

Mercado Pago has set its sights on expansion across Latin America, Osvaldo Giménez, president-Fintech, MercadoLibre, and CEO of Mercado Pago, told PYMNTS CEO Karen Webster in an interview posted Aug. 16.

While Brazil, Mexico and Argentina remain its largest markets, the company is making inroads in Chile and has plans for Colombia, Peru and Uruguay.

“The way we realize it works is basically pick one of these countries and launch the full suite of products there,” Giménez said. “And that typically takes a couple of years.”