Mexico. The Plenary of the Federal Institute of Telecommunications, IFT, resolved to establish the terms and conditions under which Grupo Televisa, through Cablevisión and Grupo Megacable, through Megacable, should suppress the Absolute Monopolistic Practice, PMA.
This practice consists of conducting behaviors that had the effect of segmenting the market in various municipalities of the State of Mexico for the provision of packaged telephony, internet and restricted television services (2Play and 3Play), under the YOO Brand.
It should be remembered that both economic agents had already been sanctioned by the IFT on February 17, 2014 and December 1, 2015, for carrying out these behaviors. At the same time, the Institute ordered the abolition of WFP through the presentation of an effective mechanism for this; both actors were advised that, if the mechanism was not effective in abolishing WFP, it would be the IFT Plenary that would determine the terms and conditions for doing so.
Thus, the Plenary of the Institute determined on May 18 that the proposals for mechanisms presented by Megacable and Grupo Televisa, S.A.B. de C.V. were not effective, viable or suitable to effectively eliminate the conditions that originated the PMA.
For this reason, the IFT established the terms and conditions under which Grupo Televisa and Megacable had to abolish this absolute monopolistic practice.
In general terms, the mechanism imposed by the IFT addresses issues related to the ownership of the YOO Trademark, the marketing strategies carried out by these economic agents and the geographical allocation for the provision of telephony, internet and restricted television services, with the primary objective of restoring the process of economic competition for the provision of telecommunications services in the State of Mexico.
The plenary resolution sets an important precedent on the joint use of trademarks in the telecommunications and broadcasting sectors.
By virtue of the fact that a trade mark requires that the services provided under it be provided with the same quality, the joint use of a trade mark by competitors may inhibit competition in the quality category. Orderly mechanisms ensure that competition is not inhibited between competitors.
