Artear and Telecom Receive Fines for Refusing to Supply Television Channels

The Secretary of Trade (ST) penalized Artear and Telecom after considering that the companies committed an exclusionary abuse of dominance. The investigation resulted from a claim filed in 2018 by AMX –commercially known as Claro– where it accused Artear, Canal 9, América TV, and Canal 26 of the following anticompetitive  behaviors:
 

1. Coordinating anticompetitive behaviors among the defendants.

2. Refusing to assign the rights to their channels by imposing abusive conditions in the clauses for the guaranteed minimum of subscribers, thus creating an artificial barrier to entry.

3. Incurring in discriminatory and exclusionary practices stemming from Artear’s alleged link with Telecom.

After receiving the claim, the Antitrust Commission included Telecom to the investigation on an ex officio basis, understanding that the company dominated the TV signals and the pay TV markets, and that it was commercially linked to Artear. Likewise, the Commission argued that Artear and Telecom had the technical capacity to offer the quadruple play service –a service combining broadband internet access, television, telephone, and wireless service provision– and emphasized the importance of the TV channels offered by Artear (Canal 13, TN, Volver, Metro, Canal A, Quiero Música, and Magazine).

Further, the Commission recommended limiting the investigation exclusively to Artear and Telecom, interpreting that the rest of the defendants were neither anticompetitive nor dominant in the market. In line with this position, the Commission explained that the mere implementing of guaranteed minima would not, by itself, imply a violation of the competition regime.

Following the investigation, the Commission considered that both Artear and Telcom incurred in an abuse of dominance from December 2017 to July 2021, by imposing discriminatory conditions for acquiring channel rights in the Buenos Aires Metropolitan Area, the City of Córdoba, and the City of Rosario. These discriminatory conditions consisted of imposing discretionary minimum subscriber amounts to AMX for accessing TV channels, which constituted an unjustified refusal to supply. The Commission considered that requiring a minimum and growing number of subscribers to TV channels implied an artificial barrier to entry to the pay TV market for AMX and any other potential service providers.

The Commission concluded that AMX's pay TV market share was less than 1%, while Telecom’s was above 50%. According to the Commission, this dominance led to implementing guaranteed minimum clauses to place AMX in the dilemma of choosing between not including Artear's channels and offering a lower quality product or including them and selling its subscription at a higher price than that of its competitors. The analysis concluded that this would lead to a distortion within the competition in the pay TV market in particular and in the quadruple play market in general.

Consequently, the ST imposed a single fine of ARS 150 million on both Artear and Telecom for their unjustified refusal to sell TV channels, abusing a position of dominance in the market. It is worth noting that the amount of the fine was decided pursuant to Law No. 25156, which establishes a maximum fine of ARS 150 million for anticompetitive behaviors. However, the Commission highlighted that if it would had applied the current Law No. 27442 in force, the fine would have amounted to ARS 80,426 million.

From the perspective of the antitrust regime, this sanction is as relevant as that imposed in the case of abuse of dominance against Cervecería y Maltería Quilmes in 2021, where the authority found the company had incurred in an abuse of dominant position of an exclusionary nature. The case against Artear and Telecom is equally relevant, considering it could be used as guideline for future cases of refusal to supply.