The Law on Defense of Competition in Argentina (Law No. 25,156) establishes regulations to avoid monopolies and guarantee fair competition in markets. One of its most relevant provisions is the obligation to notify the economic concentrations that give a company the control of a significant portion of the market. In general terms, Any operation that implies a participation equal to or greater than 25% of the relevant market must be reviewed by the National Competition Commission (CNDC)the agency responsible for evaluating and ruling on the legality of the transaction.
In the specific case of the purchase of Telefónica Argentina by Telecom, a company controlled by the Clarín Groupquestions arise about the limits imposed by law. According to sector estimates, transaction It could mean that Telecom will control about 70% of the telecommunications market in Argentinaincluding mobile phone services, internet and cable television. Since the Law on Defense of Competition prohibits operations that may restrict or distort the competition, this level of concentration generates concern both in the government and in regulatory bodies.
The National Communications Entity (ENACOM) and the CNDC have the responsibility to analyze the impact of the purchase. While the regulations allow acquisitions in the sector, it establishes that these should not generate dominant positions that affect competence to the detriment of consumers. The law defines that it is considered a dominant position when a company has the ability to set prices or restrict the offer without its competitors to counteract its market power. In this sense, the eventual concentration of Telefónica and Telecom could be considered contrary to the regulations if it is determined that prevents effective competition.
Historically, in Argentina restrictions have been applied to mergers and acquisitions in the telecommunications sector to avoid monopoly or oligopoly situations. A key antecedent was the fusion of Cablevisión y Telecom in 2018which had already generated a high degree of concentration in the market. At that time, the authorities imposed a series of conditions to mitigate the impact of the merger, including the obligation to disinterate in certain business segments to maintain competition. Although the CNDC authorized the operation, it made it clear that any other large -scale fusion in the sector would be analyzed more rigorously.
In this context, The Government of Javier Milei has expressed its intention to carefully evaluate the operation between Telefónica and Telecom. According to statements from officials of the Ministry of Economy and the Ministry of Commerce, the Administration considers that such a concentration could affect free competition and harm consumers through a lower level of innovation, higher prices and lower quality of service.
In the event that the CNDC and ENACOM determine that the purchase of Telefónica by Telecom violates antitrust regulations, there are different measures that could be applied. One of them is the Imposition of specific conditions for the approval of the operation, such as Telecom’s obligation to sell part of its assets to other competitors to avoid excessive market concentration. Another option would be the total prohibition of the transaction, which would force Telefónica to find another buyer or restructure their presence in Argentina differently.
The antitrust regulation in Argentina also provides sanctions for companies that carry out concentrations without due authorization or that incur anti -competitive practices. In the event that a company breaches the provisions of the law, it can be sanctioned with significant fines, in addition to being forced to undo the transaction or take corrective measures. This generates a framework of uncertainty about the outcome of the purchase of Telefónica by Telecom, since it is not yet clear if the operation can be specified without restrictions.
The analysis of this transaction occurs in a context of transformation in the telecommunications market in Latin America, where various companies have chosen to sell assets in the region due to economic and regulatory challenges. Telefónica has been reducing its presence in several Latin American countries, and the sale of its Argentine subsidiary is part of this divestment strategy. However, the possibility that Telecom, controlled by the Clarín Group, acquires these assets raises regulatory challenges that could lead to an extensive process of review and negotiation with the Argentine authorities.
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