Antitrust Alert: Mexico Imposes Antitrust Fine for Refusal to Share Television Content with Rival
On December 1, it was announced that the Mexican Federal Competition Commission ("Cofeco") had imposed a fine of pesos $47.5 million (approximately US $3.7 million) on Grupo Televisa, which is controlled by Mr. Emilio Azcárraga Jean, for refusing to provide certain television content to a cable television competitor. Under Mexican Federal Competition Law, the practice of refusing to sell or provide to specific persons products or services that are available and normally offered to others – a "negativa de trato" or refusal to deal – constitutes a "relative monopolistic" practice when done by a person with substantial power in the relevant market. The Grupo Televisa fine is one of the highest fines imposed by Cofeco and may reflect a determination by Cofeco to more seriously punish monopolization violations.
In June 2007, Tele Cable Centro Occidente, S.A. de C.V. ("Tele Cable") filed a complaint before Cofeco, alleging that Grupo Televisa had refused to allow Tele Cable to redistribute 16 television channels, including popular channels such as Cinema Golden, Cinema Golden II, American Network, and the popular channels 2, 4, 5 and 9 that Televisa broadcasts on Mexican free television. Cofeco found that Grupo Televisa has substantial power in the relevant market for distribution of free television signals for redistribution by cable television systems.
The pesos $47.5 million fine represents almost the maximum fine that the Mexican Competition Law allows for first-time offenders engaging in a relative monopolistic practice. Cofeco based the fine on an estimate of the damages suffered by Tele Cable. Under Mexican competition law, Tele Cable may itself sue Grupo Televisa in the Mexican courts and demand indemnification for the losses and damages directly suffered by Tele Cable. On its part, Grupo Televisa may challenge the Cofeco decision before Mexican courts. Although the Cofeco also has the power to order the suspension of any monopolistic practice, that proved unnecessary as Grupo Televisa decided to end the practice by itself in September 2008.
This significant fine on an important business in Mexico suggests that Cofeco may increase enforcement of the Mexican Competition Law. Cofeco's "negativa de trato" or refusal to deal theory of liability also suggests it will take an aggressive approach to monopolization violations.
For more information, please contact your principal Jones Day representative or either of the lawyers listed below.
Javier Martínez del Campo L.
Jesús Gabriel Altamirano
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