The three conflicts between Cofece and IFT on digital markets

The popularity of investigations into anti-competitive practices within the digital economy has meant that, in just three years, these two autonomous constitutional bodies find themselves in at least three controversies, both in courts and in the public sphere, about the powers with which they each account to decide on issues of economic competition.

While Cofece is the competent authority to resolve issues of economic competition for most markets and economic agents; The IFT is the one that observes these issues in the telecommunications and broadcasting markets, according to the constitutional reform that created this institute, in 2014.

The most recent controversy between Cofece and the IFT is a chapter added to a series of disagreements between two institutions of the Mexican State:

Uber-Cornershop Concentration. In mid-2019, the American technology company Uber announced the acquisition of a majority stake in the Cornershop home delivery platform. While Cofece decided whether to authorize the merger – just as it did when it denied authorization for the purchase of Cornershop by Walmart – the IFT said it was competent to analyze it. Cofece referred the case to the Judiciary and, in May 2020, a collegiate court decided that Cofece was the one with the power to resolve the purchase. Cofece authorized the concentration in December 2020 and in June 2021, Uber announced that it would acquire 100% of Cornershop.

Research on digital markets. In October 2020, the IFT investigative authority announced that it had launched an investigation into potential barriers to competition in the markets for internet search, social media, mobile operating systems, and cloud computing services. In January 2021, Cofece asked the IFT for the investigation file. However, because the IFT considered that the analysis was within its competence, the regulator suspended the procedure and sent the file to a court specialized in competition and broadcasting. In June 2021, the Judiciary determined that Cofece was empowered to investigate the online search markets, social networks, and cloud computing services; while the Federal Institute of Telecommunications (IFT) maintained the competition to learn about the market for mobile operating systems. A month later, Cofece withdrew from the investigation that the IFT had initiated.

App store market research. The most recent controversy between the IFT and Cofece was born from outside, when in July 2022, the former commissioner of the former Federal Telecommunications Commission, Mony de Swaan, filed a complaint, first with Cofece and then with the IFT, against the technology giants Google and Apple. The complaint, due to possible relative monopolistic practices in the application store market, was received with a prevention agreement by Cofece, against which De Swaan presented a withdrawal.

On September 29, the IFT investigative authority announced the start of an investigation into this market, something that Cofece also did, a day later, on September 30. Now, both bodies are analyzing possible relative monopolistic practices in the application store market, which is dominated by Google and Apple, and the light of the courts is already in sight.

rodrigo.riquelme@eleconomista.mx