Declaration of Economists and Antitrust Scholars on Behalf of Radiomóvil Dipsa S.A. de C.V (Telcel)
We have been asked to provide our views regarding the desirability and potential impact of the adoption of a “price-squeeze” theory of antitrust liability in México. As discussed in detail below, it is our opinion that any rule that threatens a vertically integrated firm with antitrust liability based on the claim that the difference between that firm’s upstream and downstream prices leaves its downstream rivals with an insufficient profit margin (a) improperly substitutes a rule of competitor welfare for consumer welfare and (b) will elevate prices to consumers.
We urge the Comisión Federal de Competencia (Cofeco) to use this case as an opportunity to make it unmistakably clear that Mexican antitrust law protects consumer welfare, not competitors. Specifically, we recommend that Cofeco rule that a price squeeze, however defined, does not support an independent cause of action under the Ley Federal de Competencia Económica (LFCE).