Panama Telephone Companies are Being Investigated by Acodeo with Warnings of Fines Up to a Million

The Consumer Protection and Competition Authority (Acodeco) has stepped up its oversight of the telecommunications sector in Panama.  The general administrator, Ramón Abadi Balid, confirmed that the institution is conducting a formal investigation, both on its own initiative and in response to complaints, to determine whether the current operators are engaging in monopolistic practices that distort the market and directly affect citizens’ finances.

A Market with “Fewer Options”

The context of this research dates back to the transformation of the mobile phone and internet market in the country.  For years, Panama benefited from the competitiveness of four operators. However, after consolidation processes and exits from the market, users were limited to just two major companies.  For Abadi, this is the “genesis” of the current problem. The loss of competitiveness has created a scenario where consumers have virtually no options to switch providers in the face of poor service or high prices.  “The possibility of free competition so that anyone could choose and change operators depending on the conditions and the service has disappeared,” the Administrator noted.

The Trigger: “Unexplained” Invoices

The investigation, which gained momentum on February 19 with the formal opening of the case, stemmed from a wave of complaints from consumers who reported unsubstantiated price increases.  The complaints point to monthly increases in mobile phone and internet bills, as well as the lack of discounts when service fluctuations or outages occur.  Although Panama’s economic model allows for free price setting, the law prohibits these increases from being the result of prior agreements between competitors (absolute monopolistic practices) to avoid real competition.  Acodeco is seeking to determine if there is a “notice” or coordination between companies to raise rates simultaneously.

Legal Action and Exemplary Sanctions

Abadi emphasized that the institution will not limit itself to administrative analysis. Once the evidence gathering is complete, Acodeco will go to the Commercial Courts. “We will request that the judge intervene directly to suspend these types of activities,” he explained.  The financial consequences for the companies could be severe. If the irregularities are proven, the fines will range from $250,000 to $1 million.  The official noted that, in previous cases, simply initiating legal proceedings has led companies to retract abusive measures to avoid greater penalties.

The Challenge of Technology

Finally, the head of Acodeco acknowledged that the fight is not easy because current legislation has fallen behind technological advancements.  “They are a little archaic,” he admitted, noting that the technological margins of the telephone companies make it difficult to track agreements between them.  However, he assured that collaboration with the Public Services Authority (ASEP) is close to ensure that, despite legal gaps, the rights of Panamanian consumers are effectively protected.

Our thanks to Ramón Abadi Balid, General Manager of Acodeco, who contributed to this report.  If you wish to contribute stories to NewsroomPanama.com please send them to PanamaNewsroom@gmail.com

The possibility of free competition, allowing anyone to choose and switch operators depending on the conditions and service, has disappeared.”