Mexican business is happy chief antitrust regulator, Eduardo
Perez Motta, has gone from losing 75% of the cases he brought
before the country's courts, to winning 75% of them. Why?
[caption id="attachment_63821" align="alignright" width="300"
caption="Eduardo Perez Motta in Washington D.C."]
The regulator won a
from world's richest man Carlos Slim and his telecom giant America
) last month, though the agency eventually overturned the $1
billion sanction against the Mexican business.
So why is this good news for media monopolies like Slim's in
For a company that has 70% of the mobile-phone market and 80% of
the land lines, America Movil had to expect to tangle with
antitrust regulators eventually. After years of using market
dominance to inflate prices, the company actually came away from
the settlement with concessions from the government in exchange for
Over the last three months since the announcement, shares are up
1.0% versus a selloff of almost 10% in the broader iShares MSCI
Mexico Investable (
). This is what Perez Motta calls a victory and attributes it to
cooperation with corporate heads.
Having lived in Latin America, I have seen the violence and
hardship delivered on regulators and public prosecutors so I won't
take anything away from Motta. Getting any kind of deal from the
telecom company was indeed nothing short of ground-breaking.
It does bode well however for the two media empires in the
country: Slim's America Movil and Televisa (
), which commands about 70% of the Mexican broadcast market. If
the weak settlement with America Movil was seen as a
major victory then there is really very little to threaten the two
companies' market dominance.
The relative power gained by the regulatory authority may be
short-lived. The next president chooses his successor in December.
Whether the next antitrust chief is as effective as Perez Motta or
not seems irrelevant, it appears the only way to make any progress
in Mexican business is by 'cooperating' and bargaining.
Good news for the two dominant players. They may eventually have
to fight against each other, but will probably not have to fight
against other Mexican business.