Cofeco probes monopolistic practices

Televisa, TV Azteca likely under suspicion

MEXICO CITY– Mexico’s competition watchdog, Cofeco, declared a formal investigation into suspected monopolistic practices affecting the TV market Friday.

While not specifically cited, Televisa and TV Azteca, which control a combined market share ranging from 95% to nearly 100% of Mexican auds, are likely targets in the inquiry. They could face hefty fines under tough competition reforms that went into effect in May 2011.

Cofeco cited possible infractions related to the refusal of service to particular entities as well as to practices aimed at fixing prices or damaging the productivity or demand of competitors.

In February 2011, Televisa hiked ad prices for companies owned by Mexican billionaire Carlos Slim. He refused to pay and, soon after, rival web Azteca barred ads from Slim’s companies, including telcom giant America Movil. Both Televisa and Azteca have been waging an ongoing media war with Slim, dubbed “The Battle of the Billionaires.”

Cofeco said the suspected misconduct is illegal practice versus the more serious monopolistic practice. Latter carries jail time plus a fine of up to 10% of yearly earnings.

Nevertheless, Televisa and Azteca could face fines up to 8% of their annual profits if found guilty.

Other new tactics available to Cofeco are morning raids, the possibility of amnesty for whistleblowers and injunctive authority. It has between 30 and 120 working days to complete the probe.

Televisa reported profits close to $530 million in 2011, while Azteca took in profits close to $170 million.

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