Mexico Vs Google: Google on Hook for Potential Fine as Cofece judgement approaches

Mexico’s antitrust watchdog, COFECE, is ruling on whether Google has built an illegal monopoly in digital advertising in the country.

The decision, expected by next week —June 17, could result in fines of up to 8% of Google’s annual Mexican revenue.

Analysts familiar with the allegation noted that the case could also affect the country’s digital economy and competition in the digital ad market.

Background story

• Cofece began its investigation into Google Mexico in 2020.
• The organisation issued a summon in 2023, beginning the trial phase of the law procedure.
• It demanded Google’s financial information from Mexico’s tax authority, Servicio de Administración Tributaria (SAT).

The implication

If found guilty, Google could face significant penalties, impacting its business in Mexico. Public documents show that the ruling might fine the tech giant 8% of its annual Mexican revenue, which is the maximum fine for monopolistic practices.

Is Google being accused of antitrust violation?

On May 9, 2025, Mexican President, Claudia Sheinbaum, filed a lawsuit against Google over the company’s decision to rename the Gulf of Mexico to “Gulf of America” for US users on Google Maps.

The US Department of Justice (DOJ) accused Google of antitrust violations in its online advertising business with a series of monopolies in the markets for ad serving, ad exchanges, and ad networks.

Also, there is an ongoing £5 billion class-action lawsuit against Google in the UK for allegedly abusing its dominant position in online search, which has resulted in hike of advertising prices and shutting out competitors.

In Europe, the European Commission is investigating Google for its potential violations of the Digital Markets Act (DMA).

Why is Google accusation being on the rise?

1. Dominant Market Position: Google’s significant market share, particularly in search engine technology, has raised concerns about monopolistic practices. The company controls around 80-90% of the US search engine market, largely due to default settings on devices.
2. Exclusive Contracts: Google’s contracts with device manufacturers and distributors, such as Apple, have been criticized for limiting competition. These deals, worth billions of dollars, ensure Google’s search engine is the default option on many devices, making it challenging for rivals to gain traction.
3. Anti-Competitive Practices: The US Department of Justice alleges Google has used its dominance to stifle competition, citing examples such as paying Apple $10 billion annually to maintain default search engine status on Apple devices.
4. Lack of User Choice: Critics argue these contracts restrict user options, making it difficult for alternative search engines to establish a market presence.
5. Regulatory Scrutiny: Governments worldwide are increasingly scrutinizing Big Tech companies’ business practices, leading to a rise in antitrust accusations and lawsuits.

What are the consequences of these accusations to Google?

Breakup of Google’s Dominance: Regulators may force Google to divest parts of its business, such as its Chrome browser or Android operating system.

Changes to Business Practices: Google may be required to alter its contracts and business practices to promote competition and user choice.

Financial Penalties: Google could face significant financial penalties, potentially impacting its bottom line.

Reputation Damage: The negative publicity surrounding these accusations may damage Google’s brand reputation.