Mexico’s Largest Mobile Operator Proposes A Settlement To Enhance Competition Leading Mexico’s Antitrust Authority To Repeal Its Historic Fine

Last Thursday, Mexico's antitrust commission repealed its largest fine ever issued—a US$925 million fine against Telcel, a communications company that controls approximately 70 percent of the Mexican mobile market with 66.7 million wireless subscribers.¹ The Federal Competition Commission (CFC), initially imposed this fine on April 7, 2011, after a six-year investigation into Telcel.² Authorities believed that the company was using its market power to displace competitors by imposing high interconnection charges on its twenty rival competitors in order for them to access Telcel's wireless network.³ The CFC alleged that the mobile company was engaging in a margin squeeze, by charging high wholesale prices for interconnection while instituting low retail pricing, in violation of Article 10 of the Mexican Competition Law. The CFC alleged this conduct raised costs for downstream rivals and drove out competitors.⁴ Telcel responded that the interconnection rates had been