Latin American telecom giant incurs fine for Mexican dominance

Mexico’s Federal Competition Commission (CFC) has issued a US$1 billion fine to the Mexican branch of America Movil for “monopolistic practices”. Operating as Telcel, the branch in question has been under investigation for four years, possibly due to its massive share of the Mexican market – around 70%.

America Movil has declared its intention to dispute the fine, which is the largest that the CFC has ever issued. It will have thirty working days to lodge an objection. An official release from the telecom giant to the Mexican Stock Exchange (BMV) stated that it was was “analysing the reach, basis and motivation of said resolution with the aim of using each and every one of the defence measures at its disposal.”

In addition, one of the firm’s executives reportedly stated: “Neither the alleged practices nor the size of the fine have any legal or economic ground. We will take [CFC’s] ruling to an independent court for judicial review and revert it.”

While Telcel does not have a monopoly over the Mexican mobile market, its dominant position has led to concerns among regulators that consumers have been or will be forced into paying over the odds. Mexico City’s Competitive Intelligence Unit spokesman Ernest Piedras stated: “It finally looks as if we are beginning to match international practices. It’s a step in the right direction.”

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