Latamlist – After months of deliberation, the Mexican Justice Department determined that the Federal Economic Competition Commission (COFECE) will settle the acquisition between Cornershop and Uber.
In October 2019, Uber announced that it would take a 51% stake in the Mexican-Chilean startup Cornershop for $450M. The COFECE and the Federal Telecommunications Institute (IFT) entered a legal battle over who would determine the viability of Uber’s acquisition.
Several players in LatAm’s startup ecosystem criticized the dispute for excessively delaying the process which was affecting Cornershop’s financial capabilities.
During the initial stages of the pandemic, Oskar Hjertonsson, founder and CEO at Cornershop, expressed his frustration and the extra pressure they faced due to the regulatory uncertainty. Then, the Association of Mexican Entrepreneurs (ASEM) also spoke out about the lack of cooperation between the authorities in April.
The COFECE informed that the First Tribunal Collegiate on Administrative Matters, which specializes in Economic Competition, Broadcasting, and Telecommunications, determined that COFECE is the competent authority to settle this case.
The Justice Department decided COFECE would be the authority to handle the Uber-Cornershop acquisition on the basis that the digital platforms offer logistics and user intermediary services, not telecommunications services.
“The Tribunal Collegiate sets an important precedent in the definition of competencies between the COFECE and IFT in the current context, where business through digital platforms and media are becoming more relevant in the economy of the country,” said COFECE.
The COFECE is waiting for the official notice of this decision to be able to resume the process of settling the operation. It will be interesting to see the outcome as the Commission blocked Walmart’s $225M acquisition of Cornership in 2019 for potential anti-trust violation.
Read more on Forbes México.