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12 December 2019
Following the 2013 constitutional reform, the Federal Telecommunications Institute (IFT) became the governmental entity with exclusive jurisdiction over cases, procurement and advocacy in competition matters relating to the broadcasting and telecoms sectors, while the Federal Economic Competition Commission (COFECE) has jurisdiction in competition matters regarding all other sectors. However, the IFT is also a regulatory entity responsible for pursuing the efficient development of telecoms. In order to guarantee the rights to information and freedom of speech, the IFT can enact regulations, promote and supervise the use and exploitation of telecoms services and take all other necessary actions.
While this allocation of jurisdiction between the IFT and the COFECE may appear straightforward, in reality, there is no clear-cut division of powers with regard to digital markets. In the digital era, markets are constantly evolving. Different types of digital business (eg, platforms) have emerged and the traditional markets are increasingly relying on digital services to compete effectively. New competitors and market participants meet with consumers in or through the cyberspace. In this regard, although digitisation no longer involves only the telecoms sector, it depends on communication technologies – specifically, the Internet.
Multiple challenges exist with regard to issuing policies and regulations and enforcing competition law in this complex digital environment. In 2018, in response to these challenges, both the IFT and the COFECE published studies to analyse competition in the digital era. The COFECE carried out a general study(1) on the ways in which competition in a digital economy should be addressed and presented the main challenges which apply to competition enforcement and regulation in these evolving markets. The IFT issued a document setting out its regulatory vision for the telecoms sector for 2019 to 2023,(2) a key chapter of which was devoted to internet development and telecoms regulation in the digital ecosystem.
Regardless of these valuable individual efforts, multiple competition issues have arisen, such as:
Therefore, a single endeavour may not sufficiently tackle these challenges.
Foreseeing this necessity, the 4th Advisory Council of the IFT has in recent months issued recommendations to create a Technical Policy Committee for the Digital Environment.(3) The committee would be a specialised technical body, of a consultative nature, that allows effective interaction between the IFT, public bodies with jurisdiction over topics relevant to the regulation and promotion of the digital environment (eg, the COFECE) and representatives of industry, academia and civil society.
In the digital economy, most goods and services are traded via digital platforms or through cyberspace. The Internet is the common denominator in such transactions and digital markets. Thus, competition with regard to digital products and services cannot be analysed in isolation to the infrastructure and communication channels that carry them or the necessary policies which ensure adequate access thereto. Moreover, the competition authorities cannot overlook the impact of digital markets on consumers' privacy and rights.
Therefore, regulation and policy making with regard to digital markets requires close collaboration between several authorities as, in Mexico, various governmental entities with powers over different aspects that affect the development of an appropriate digital environment may overlap. In the competition field, a joint collaboration between the IFT and the COFECE is required. The Supreme Court of Justice's rulings also support this collaboration, and the court has stated that one of the duties of autonomous authorities is to effectively address Mexico's current challenges in order to benefit society.(4)
The proposed committee would complement the IFT's and the COFECE's role in competition matters using the expertise of other governmental authorities – particularly when cases may involve issues regarding privacy protection and consumers' rights in the operation of digital markets. Further, this committee could be a good forum to define potential guidelines or standards that may serve to provide legal certainty for economic agents on possible jurisdictional conflicts between the COFECE and the IFT.
In this context, a space for discussion, coordination and advocacy of the competent agencies (eg, the IFT, the COFECE, the Consumer Protection Federal Bureau and the National Institute for Transparency, Access to Information and Personal Data Protection) will nourish and complement the different perspectives in the digital era. The committee may serve as a crucial forum to move forward towards a public policy that responds to the current necessities and fosters innovation and addresses, in a holistic way, relevant topics regarding the analysis, prosecution and regulation of the digital environment.
For further information on this topic please contact Lucía Ojeda Cárdenas or Alejandra Magaña Cruz at SAI Law & Economics by telephone (+52 55 59 85 6618) or email (firstname.lastname@example.org or email@example.com). The SAI Law & Economics website can be accessed at www.sai.com.mx.
(1) Further details are available here.
(2) Further details are available here.
(3) Further details are available here.
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