Mexico: Walmart/Cornershop agreement blocked over data risk, regulator says

The purchase agreement between Walmart and Cornershop’s home delivery smartphone application, has been blocked by the Federal Economic Competition Commission of Mexico (COFECE), stating the deal would have risked creating an uneven playing field in the retail market, implying a disadvantage for rivals by giving Walmart possible access to competitors’ sales information, the regulator has stated.

The transaction would have left Walmart in possession of a platform selling its own products, as well as products offered by its competitors, giving Walmart access to information concerning orders placed with rival companies, which raised alarm with the authority.

“It all has to do with the size of Walmart,” said Alejandra Palacios, president of COFECE, pointing out the nearly 2,500 Walmart stores in Mexico, the largest supermarket chain in the country. “If you’re going to discriminate or help one of the parties, you’re generally going to help the big one.”

COFECE rejected several Walmart proposals to rescue the agreement, considering its commitment measures weak, making it impossible for the regulator to guarantee that these commitments would be fulfilled correctly. “It is not clear to the commission that there would be independence between the Cornershop MX business and the interests of Walmart”, the agency stated.