Mexico's Antitrust Regulator in Favor of Competition Courts
01/29/2013| 04:24pm US/Eastern
--Regulator sees proposed change in commission procedures as setback
--Specialized competition courts would speed up dispute resolutions
--Additional television network, broadband provider would raise competition
By Anthony Harrup
MEXICO CITY--Mexico's antitrust watchdog is keen to see the creation of special courts to speed up resolution of disputed regulatory decisions, but warns that a separate bill currently before Congress threatens to undo advances toward improving competition enforcement in the country.
Eduardo Perez Motta, president of the Federal Competition Commission, of CFC, said in an interview that the effects of 2011 changes in the competition law, which introduced fines of up to 10% of revenue for certain offenses, surprise visits to establishments and the possibility of criminal charges, will only start to be noticed this year.
"The decisions based on the reform are just about to start, although it has been a year and a half. Investigations are just beginning under that law, and we'll start to see results in the coming months and second half at this year," Mr. Perez Motta said.
While optimistic about the new government administration's plans to further strengthen the commission, the regulator is concerned about another bill in Congress that he believes would do away with checks and balances in antitrust probes.
The bill, presented by legislators and passed last year by the Senate, seeks to have one of the five commissioners take the lead on cases, effectively removing the firewall between the commission's technical staff, who conduct investigations and analysis, and the commissioners who determine and vote on sanctions.
The CFC managed to have lower-house debate on the bill postponed in December when it sent a letter to the lower house's economy committee, signed by all five commissioners and a dozen top commission officials, opposing the measure.
"What we need to look after in this law, is that there's no taking steps backwards," Mr. Perez Motta said.
The administration of President Enrique Pena Nieto, who took office Dec. 1, plans to submit legislation in the first half of this year to strengthen the antitrust commission and create the special courts with the aim of speeding up the resolution of legal disputes over regulatory decisions. The courts would begin operating in 2014.
At present, companies that take antitrust rulings to court can hold up their implementation for years. The idea of the competition courts, is that the judicial branch can review and correct administrative decisions, but not substitute them, Mr. Perez Motta said.
Under Mr. Perez Motta, who has about two years left to his nonrenewable 10-year term, the commission has found itself at the center of some high-profile disputes, particularly in the telecommunications industry.
Among other things, the commission voted to settle a record $1 billion fine against the country's biggest mobile-phone operator, America Movil (AMX, AMX.MX) unit Telcel, arguing that the benefits of lower interconnection costs and other commitments by the carrier far outweighed the collection of the money.
It also approved, on appeal, television heavyweight Grupo Televisa's (TV, TLEVISA.MX) 50% stake in mobile carrier Iusacell, in partnership with the controlling shareholder of the country's other main broadcaster TV Azteca SAB (AZTECA.MX), securing in the process commitments in favor of increased competition in television.
Ultimately, Mr. Perez Motta says, the goal is to have tangible benefits for consumers, and he cited the case of satellite TV venture Dish Mexico, which entered the market in 2009 with low-cost packages to compete with Televisa's Sky Mexico satellite service.
Televisa "did what any competitor should do, it started offering much cheaper packages, and started lowering its prices, and increased its sales," he said.
The emergence of a new provider of broadband access independent of existing operators, and the government's plan to tender one or two new nationwide broadcast television networks could go a long way toward lowering costs in telecommunications and media, he added.
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