America Movil 2010 Mexico Dominance Ruling Upheld by Agency
The Federal Competition Commission rejected America Movil’s challenge at the end of February, according to a 245-page opinion released yesterday. America Movil has 70 percent of the nation’s wireless subscriptions.
The decision could allow government officials to go ahead with restrictions on America Movil’s wireless business even before lawmakers pass a proposed bill to increase competition in the industry. Under current law, a dominance ruling by the antitrust agency gives the Federal Telecommunications Commission the authority to regulate the company’s prices, quality and connections with competitors.
America Movil is evaluating the decision and its legal options, a press official said. The company has the right to appeal the decision to Mexican federal courts. The carrier’s arguments -- that the commission had not considered its defense and didn’t have the authority to make a ruling -- were unfounded, the antitrust agency concluded.
The ruling included a recommendation to officials drafting regulations based on the decision. Rules designed to help competitors access the market may be more effective at addressing America Movil’s dominance than placing restrictions on prices, it said.
Mexico’s Senate is considering a bill that would give regulators the power to break up companies that hold more than 50 percent of a market and would limit the ability of phone carriers to stall government officials with court injunctions. The proposal was already approved last month by the lower house of Congress and is backed by the nation’s three major political parties.
America Movil fell 1 percent to 12.34 pesos at the close in Mexico City, its sixth straight day of losses. The shares have dropped 17 percent this year, compared with a decline of 1.1 percent for the benchmark IPC index.
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