Latin America. Many media announced that last Friday, February 10 at night, these two companies reached an agreement, according to a statement published in networks:
"Fox Networks Group Latin America celebrates with its fans, thanks them for their loyalty and informs them that, after several months of talks, it has reached an agreement to maintain the distribution of its signals on the Directv platform in Latin America"... "Fox Networks Group Latin America appreciates the trust of Directv Latin America to reach an agreement for the benefit of our fans who will continue to enjoy their favorite and consecrated shows," he concluded.
The agreement also establishes the return of all signals to the Sky Brasil grid, from where they had been withdrawn on February 5, when the contract ended. In Colombia, Directv has more than one million subscribers according to reports to ANTV and it is no secret that the company leads the satellite television market.
DirecTV is a distributor for Colombia, Mexico, Venezuela, Brazil, Peru, Ecuador, Chile, Argentina and Uruguay. In the region it is the first subscription television operator with almost 20 million customers, followed by Claro. For its part, Fox has a grid of channels of very good acceptance for their diversity and quality in content.
As we can see, this bid was not of two small companies that needed each other to continue their operation, Fox Networks Group Latin America provides a diversity of television channels to the different subscription operators in Colombia and according to statements of some of these operators, there is a price difference that can vary significantly from each other, large operators such as Directv in Latin America, Telmex Colombia S.A., UNE, MOVISTAR may have a more favorable value, which leaves them in a more competitive place compared to small market operators.
It is recurrent to hear the complaint of many of those so-called "small cablers" who have no possibility of negotiating with FOX and are "subjected" as they tell us, to what these large programmers determine. In Colombia is one of the few countries in Latin America where negotiations occur individually with each company, FOX has never wanted to negotiate with the associations that represent them and they have not been able to truly unite to solve their problems.
In Colombia, the competition regime does not prohibit the existence of monopolies. However, even in the case of monopolies designated or authorized by law, the constitution limits them by stating that: "Economic activity and private initiative are free, within the limits of the common good. For its exercise, no one may demand prior permits or requirements, without authorization from the law. [...] The State shall, by mandate of the Law, prevent the obstruction or restriction of economic freedom and shall prevent or control any abuse by persons or enterprises of their dominant position in the national market."
In development of that constitutional precept, the regime of defense of competition, prohibits conduct constituting abuse of the dominant position in the market, indicates the sanctions for the infringement of that regime. It also grants the Superintendence of Industry and Commerce the competence to monitor compliance with said regulations and impose sanctions for their violation, in all those sectors in which such competence has not been granted to another authority.
The practices restricting competition that concern us in this matter are set forth in Article 50 of Decree 2153 of 1992, (http://www.sic.gov.co/practicas-restrictivas-de-la-competencia) in the following paragraphs:
2. The application of discriminatory conditions for equivalent transactions, which place a consumer or supplier at a disadvantage vis-à-vis another consumer or supplier under similar conditions.
4. Sale to a buyer under conditions other than those offered to another buyer, when it is with the intention of diminishing or eliminating competition from the market.
5. Sell or provide services in any part of Colombian territory at a price different from that offered in another part of the country, when the intention or effect of the practice is to diminish or eliminate competition in that part of the country and the price does not correspond to the cost structure of the transaction.
Fox Networks Group Latin America's message to medium and small entrepreneurs is loud and clear, if they didn't mind losing about 20 million customers representing Directv, do you think they would import those who have these small Colombian companies? I doubt it, we should see what the Superintendence of Industry and Commerce thinks, but true, even the cablers do not join to make these proposals, I really do not know what may come after the agreement. Can you imagine?
Text written by Luis Pinto, advisor of TVyVideo+Radio.
