Mexico Sues Billionaire Carlos Slim

Mexican business tycoon and philanthropist, Carlos Slim, faces charges following a lawsuit filed by the government on alleged exploitation by Telmex to its customers.

Mexico sues billionaire Carlos Slim, Mexico Telmex chairman and chief executive over alleged illegal fee charging. The world’s richest man has been linked to increased phone rates that have been dubbed comparable to those charged on already developed nations.

The federal consumer protection agency filed the lawsuit in a civil court with an objective to end set of fees while at the same time account for money the telecommunication giant had been extorting its customers. Despite the approaches made by such businesses to use legal injunctions and protect against any forms of lawsuits, Mexico sues billionaire Carlos Slim, Mexico Telmex cellphone mobile unit chairman and the move has been described as the first of its kind in the country.

Even with other service providers claiming a share in the market, Carlos Slims’ Telmex’s 80% telephone lines services in the country put the company ahead. The last few years have seen him top the list as the world’s richest man according to Forbes magazine. His estimated wealth hit the $73 billion mark.

Up to ¾ of the cellphone market in Mexico is controlled by Slim through Telcel, which also faces a lawsuit from consumer protection agency on failure to compensate its users following reported service outages. Telcel makes part of American Movil, another company chaired by Slim.

While Telmex’s lawsuit came at the end of March, Telcel had been sued a month earlier. The two lawsuits are part of a new practice in the country’s jurisprudence, which is a collective action similar to the United States’ class action suit. The only difference between the two is that the Mexican approach is government agency initiated rather than a group of citizens. The new mechanism has been moderately used despite being just a year old since its incorporation to law.

According to Rafael Ochoa, the senior prosecutor in the consumer agency and popularly referred to as Profeco, a total of 10.40 pesos, which is an equivalent amount of 85 cents, is charged on monthly basis to Telmex service buyers that asked not to be included in the telephone directory. Ochoa added that the fee is not justifiable on the account that right to privacy remains a constitutional mandate.

During a telephone interview on Tuesday, Ochoa emphasized privacy services among his reasons to have Carlos Slim’s Telmex sued. Telmex fixed-line phones has a growing user base with up to 14.5 million reported to have subscribed for its services though according to Ochoa, the actual number of users signed to pay for the privacy service is still unclear. Renato Flores, the Company’s spokesman said that Telmex would not respond to the suit until further notice.

Telmex lies in the category of businesses that protect their integrity through legal injunctions commonly known as amparo in Mexico. The injunctions impede success to prosecutions against such companies. The move by the federal consumer protection agency brought a significant change to the amparo. The efforts to have it used in cases related to public interests would no longer be in function and experts see no possibility that Telmex would make use of the injunction at the moment.

Daniel Gershenson Al Consumidor (For the Consumer) organization activist was quoted saying that it was better than nothing although he didn’t think the measures would affect Slim’s wealth in anyway. Reigning officials in President Enrique Pena Nieto’s government, indicate that these actions open up to bigger reforms that would subdue monopolies and other practices that have continuously affected the economy. One of the measures taken to fight this in the program includes steps to increase competition in the telecommunication market.

Mexico sues billionaire Carlos Slim, Mexico Telmex chairperson but he isn’t the only favorable candidate in the list according to Ochoa. Pena Nieto’s target is to the companies acting as monopolies and the untouchables such as Elba Esther Gordillo, leader of teachers union who was arrested in February on fraud charges. Slim happens to lie in the same category.

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