Google in Mexico faces major potential fine as antitrust ruling nears

Reuters

2 days ago

MEXICO CITY, June 10 (Reuters) - Mexico's antitrust watchdog is set to rule by next week on whether Google built an illegal monopoly in digital advertising in the country, a decision that could fine the tech giant 8% of its annual Mexican revenue, public documents show.
Although Google does not release detailed revenue results by country, the potential fine could be among the largest ever imposed by Mexico's Federal Economic Competition Commission (Cofece). Cofece and Google declined to comment.
The watchdog expects to make a decision by June 17, according to its own published timeline. Under Mexican law, 8% of annual revenue is the maximum fine for monopolistic practices.
Cofece accuses the company of establishing an effective monopoly in the Mexican digital advertising market. It began its investigation into Google Mexico in 2020 and issued a summons in 2023, beginning the trial phase of the procedure.
Google then had the opportunity to present evidence against the allegations.
A company can apply for an injunction blocking the antitrust ruling until a specialized court decides on whether it should be ratified or not.
Cofece requested Google's financial information from tax authority SAT, a timeline of updates on the case's record of history showed.
While Google parent Alphabet (GOOGL.O), opens new tab does not include specific revenue numbers for Mexico in its earnings reports, the U.S. tech giant is the largest company to be challenged by Mexico's antitrust regulator.
According to annual results for 2024, the company's revenue for its "other Americas" region, which includes Latin America, was about $20.4 billion.
In 2022, Cofece fined a group of liquefied petroleum gas distributors 2.4 billion Mexican pesos ($126.03 million) for price fixing.
Cofece's database shows that an oral hearing with Google about the case, considered one of the final steps in such cases, took place on May 20.
In 2020, in response to anticompetitive investigations into Google, Lina Ornelas, Director of Public Policy and Government Relations at Google Mexico, said at a company event, "Being big isn't bad. What matters is that you don't take out any competitors with your products, even though yours can be very efficient, and that's why you have more users."
Separately, Mexican President Claudia Sheinbaum has clashed with Google, filing a suit against the company over its decision to change the name of the Gulf of Mexico to the "Gulf of America" for U.S. users of Google Maps, after President Donald Trump renamed the body of water. The suit argues Google does not have the "authority" to rename it.
Lawmakers from the ruling Morena party have since last year called on Cofece to resolve Google's long-standing case.
If Cofece rules against Google, the move would mirror the tech titan's legal woes in the United States, where a U.S. district judge last year ruled it holds an unlawful monopoly in online search and related advertising.
The U.S. Justice Department and a coalition of states want Google to share search data and cease multibillion-dollar payments to Apple and other smartphone makers to be the default search engine on new devices. Antitrust enforcers are concerned about how Google's search monopoly gives it an advantage.
In a separate case, a federal judge said Google illegally dominated two markets for online advertising technology, with the Justice Department saying that Google should sell off at least its Google Ad Manager, which includes the company's publisher ad server and its ad exchange.
($1 = 19.0435 Mexican pesos)