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Merger awaits further approval in Mexico. Merger awaits further approval in Mexico.

AMLO signals conflict of interest in Disney-Fox merger

Former official at telecommunications watchdog said to have been hired by one of the parties

President López Obrador has warned that the merger between the Walt Disney Company and 21st Century Fox must be considered carefully because of a possible conflict of interest related to its regulatory approval – and it could push soccer matches on to Pay TV channels.

Speaking at his daily press conference this morning, López Obrador said that he has been informed that a former official who worked at the Federal Telecommunications Institute (IFT) was hired by one of the two companies to complete the application to formally register the merger in Mexico.

The Federal Economic Competition Commission (Cofece) approved the Disney-Fox merger this week, stating that there is little probability of it affecting free competition, but the IFT also has to give its approval for it to go ahead.

“The information I have is that [the merger] wasn’t allowed in Europe or the United States and here they want to authorize it. I am respectful of the organization that regulates and decides on these matters but I also have information that there is a conflict of interest,” López Obrador said.

The president also said that he was concerned that the merger between the two companies could result in Mexicans having to pay to watch the nation’s favorite sport on television.

“What worries me the most is that they’ll charge for watching soccer. It’s not my favorite sport but a lot of people watch soccer. An authorization that affects consumers, soccer fans, it’s not going to happen,” López Obrador said.

“If soccer is affected, well no, review the matter, discuss it, debate it. Yes, they [Cofece and the IFT] are autonomous organizations but they’re not infallible, they’re not like The Castle of Purity [a 1972 Mexican film], let’s see what they’re doing, we all have a right to know that,” he added.

Federico González Luna, a member of the Institute of Telecommunications Law (IDET), said that if the merger is authorized under the terms currently proposed, 73% of Mexico’s sports television channels will be owned by a single company and many soccer matches will likely be shown only on premium channels.

That scenario, he said, would “exclude a lot of Mexicans, especially those with lower incomes because they won’t be able to pay to watch soccer matches.”

The Walt Disney Company acquired 21st Century Fox in a deal worth US $71.3 billion that was approved by shareholders of both companies in July last year.

Source: Notimex (sp)

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