In January 2010 the Argentine National Commission for the Defense of Competition (CNDC) levied a US$27.5 million fine against Telefónica de Argentina for failing to notify the CNDC of the investment made by its Spain-based parent company, Telefónica S.A., in Telecom Italia SpA. Telecom Italia holds a 50-percent share in Telecom Argentina, which is Telefónica de Argentina’s main competitor in the provision of landline services. Telefónica de Argentina and Telecom Argentina are also the only providers of both landline and major mobile services in Argentina.
The CNDC ordered Telecom Italia to divest its holdings in Sofora Telecomunicaciones S.A., the holding company that controls Telecom Argentina, by February 25, 2010. Last month, however, a court in Argentina suspended the divestiture timeline and asked the Supreme Court of Argentina to order the government to create a national antitrust tribunal to determine whether the investment of Telefónica in Telecom Italia affects competition in Argentina.