EconomyFinancialWhat's going on? IFT and Cofece fight over technology...

What's going on? IFT and Cofece fight over technology mergers

The merger between AT&T and Discovery to create a new streaming content giant was one of the cases that once again reflected the dispute between Mexican regulators Cofece and IFT regarding who is responsible for issuing resolutions on mergers and acquisitions in the sector. The case of the merger between the two entertainment giants ended up in court, causing delays of a year and a half to obtain the endorsement of the union of the entertainment companies.

The investigation that both institutions opened in September of this year against Google and Apple for possible relative monopolistic practices in the application store market opens up the dispute between the two regulators once again. A disagreement that could again reach the courts, which have become the instance to determine who has the last word to endorse or not a merger between two technological giants.

Miguel Flores Bernés, a lawyer specialized in economic competition, assures that, due to the accelerated development of the business models of technology and service companies, it is necessary that the Plenary Sessions of the Federal Telecommunications Institute (IFT) and the Federal Competition Commission Economic (Cofece) work together to establish guidelines that allow them to effectively avoid market concentrations or ‘killer mergers’, a term that refers to the acquisition of a potential competitor.

In addition to the quarrels between the two regulators, the specialist warns that the incomplete plenary sessions of the IFT and Cofece can delay investigations such as that of Google and Apple for at least two years, since the resolutions require the participation of at least five commissioners and currently each organ has four.

Arturo Robles, commissioner of the IFT, assured that he has proposed to the Cofece Plenary to work together because the accelerated development of the digital ecosystem and its companies repeatedly leads to proposals on when it is necessary to regulate companies or when to stop certain practices. .

Cooperation between international regulators

Company mergers are increasingly necessary to boost the business models of companies, which makes visible the need for cooperation between international regulators, in order to take into account the effects that the decision of a certain regulator will have in other markets. .

Lucía Ojeda, partner at SAI Law and Economy, recalled the case of the merger between Meta and the Giphy company. Mark Zuckerberg’s company was looking to take over the video company, but the UK regulator did not validate the transaction because it envisioned competition and infringement problems by gaining greater access to user data.

“The analysis that was done on the Giphy case never reached the Mexican authorities, despite the fact that there were many Mexican consumers who could be affected,” he warned.

He added that another of the challenges that regulators have is being able to access the documents of the companies that want to acquire another firm so that they can demonstrate the true intention of the economic agents.

“Companies know what and why they buy and it is very clear in the internal documents of the companies. The challenge in Mexico is to establish a procedure that allows the authority to have access to those documents that will demonstrate the true intention of the economic agents,” he concluded.

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