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Mexico Antitrust Agency Starts Second Probe of Telecom Market

July 12 (Bloomberg) -- Mexico’s antitrust agency is opening an investigation into “relative monopolistic practices” in the markets for cable television, fixed-line phone and internet service.

The Federal Competition Commission, known as the CFC, will review actions or agreements by companies that have the “objective or effect of inappropriately displacing other market participants.” Competitors may also have attempted to increase costs for rivals or reduce demand for their services, according to a statement published in Mexico’s official gazette today.

The probe follows another CFC investigation into possible collusion in the same markets, announced June 1. Telefonos de Mexico SAB, the Mexico City-based company that controls 80 percent of the nation’s fixed-line market and is the largest Internet provider, filed a complaint with the CFC in March, saying commercial agreements between Grupo Televisa SA and Megacable Holdings Inc. hurt competition.

Televisa, also based in Mexico City and the world’s largest Spanish-language broadcaster, controls three cable operators that offer packages of TV, phone and Web service, and it shares a brand, Yoo, with Megacable, the nation’s largest cable carrier.

The companies, which have been taking customers from Telmex with their package of services, have denied their collaboration hurts competition. Telmex, controlled by billionaire Carlos Slim’s America Movil SAB, is banned from offering a video product by Mexico’s government, which says the company must first comply with rules governing phone-network connections.

Telmex shares were unchanged at 9.45 pesos at 2:11 p.m. New York time. Televisa fell 1 percent to 53.30 pesos and Megacable rose 3.2 percent to 27.24 pesos.

To contact the reporter on this story: Jonathan Roeder in Mexico City at jroeder@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net

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