By: Marco Tena
In Mexico’s telecommunications sector, the Federal Economic Competition Law (LFCE) and the Federal Telecommunications Institute (IFT) play crucial roles in the promotion and protection of competition.
A recent excerpt published in the Diario Oficial de la Federación on May 21, 2024 highlights a new investigation procedure initiated ex officio by the Investigating Authority of the IFT, filed under the electronic file number AI/DC-001-2024. This procedure seeks to determine the possible existence of barriers to competition and free competition or essential inputs that may generate anti-competitive effects in the market for the provision and distribution of mobile telecommunications services and related services throughout the national territory.
The initiation of this investigation is significant since the IFT has the task of identifying and analyzing the existing barriers in the market. These barriers may include monopolistic practices, restrictions on access to critical infrastructure or unequal conditions in supply contracts.
Once identified, the impact of these barriers on competition and consumer welfare is assessed by examining whether they limit the entry of new competitors or restrict the ability of existing competitors to compete effectively.
The IFT’s investigation is exhaustive and may include requests for information from the companies involved, interviews with market players and detailed data analysis. This process can take several months, depending on the complexity of the case and the amount of information required.
In the extract of the agreement, it is specified that the investigation period may not be less than thirty days nor exceed one hundred and twenty working days, starting from the publication of the extract. This period may be extended on two occasions for good cause.
The excerpt of the agreement also mentions that the investigation procedure should not be understood as prejudging the conditions of effective competition in the markets under investigation. Only if there are sufficient elements to support the existence of barriers to competition, the corresponding articles of the LFCE and the applicable regulatory provisions will be applied.
Penalties for anticompetitive practices may vary. The IFT has the authority to impose significant economic fines and order the modification of business conduct. In extreme cases, it may even order the divestiture of assets to restore competition in the market. In addition to sanctions, the IFT may impose corrective measures with the objective of restoring a competitive environment. These measures may include the elimination of restrictive contractual clauses, the obligation to share essential infrastructure or the creation of a level playing field for all competitors. Compliance with these measures is closely monitored by the IFT, which may take further action if the parties involved do not comply with the orders issued. The impact of these actions on the market can be profound.
The elimination of barriers to input access not only facilitates the entry of new competitors, but also improves the conditions of competition, resulting in better prices, quality and choice for consumers. A more competitive market can also stimulate innovation and efficiency among suppliers, benefiting end users.
In conclusion, the IFT’s intervention through this new investigation may have a significant impact on the structure and functioning of the mobile telecommunications market in Mexico, promoting a more competitive and fairer environment for the benefit of all market players and consumers.
