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November 27, 2025
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Mexico’s digital “kill switch” lights up spotlights in the T-MEC

Mexico's digital “kill switch” lights up spotlights in the T-MEC

The statement points to a key piece of Mexican tax legislation. Since the VAT reform that came into force in 2020, Mexico allows telecommunications operators to block access to foreign digital services when they do not comply with obligations such as registering with the SAT, registering with the RFC, having a legal representative, obtaining an electronic signature or paying the tax.

This forced blackout applies only to non-resident suppliers and, according to DIMA, breaks with principles of national treatment and non-discrimination established in the Cross-Border Services and Telecommunications chapters.

For the streaming industry, the problem is not minor. Remember that these platforms support thousands of artists, producers, labels and rights managers in North America.

DIMA members are responsible for approximately 84% of recorded music revenue in the United States, with music streaming generating more than $14 billion in 2024.

“The majority of members operate internationally and all of them rely on global, interconnected supply chains that are necessary for the functioning of a robust music industry that allows listeners to listen to the music they want, whenever they want, and for artists to connect with their fans and reach new audiences around the world.”

It also emphasizes that its operation requires a predictable digital ecosystem, without barriers based on administrative requirements that are difficult to execute from abroad.

“Making access to national telecommunications networks conditional on tax compliance, rather than technical or security reasons, generates unnecessary uncertainty and undermines the predictability that cross-border digital services require,” he points out.

Concern grows with what is coming in 2026, since the reform of the Tax Code forces digital platforms to grant continuous and real-time access to operational data for tax purposes. If they do not comply, they would again face network blocking.

This combination, the association warns, opens additional risks in terms of data security and trade secrets, and contravenes the Intellectual Property chapter of the T-MEC, which protects confidential and undisclosed information.

DIMA maintains that Mexico uses a “disproportionate and discriminatory” inspection method, since the measures do not apply to local suppliers and concentrate the burden on foreign services.

In a sector where most of the income is allocated to the payment of royalties, the possibility of automatic disconnection from the Mexican market becomes a relevant obstacle for investment and expansion of services.

DIMA’s concern is not minor, since Mexico is consolidating itself as one of the most important music streaming markets in Latin America. At the end of 2025, it is projected that 77.4 million Internet users, equivalent to 80.1% of internet users, will listen to music, podcasts or audiobooks through digital platforms, according to a report by The CIU.

Of that universe, 42.9 million will pay for some audio service and 14.3 million will maintain an active paid subscription. This solid foundation confirms that the country is a strategic destination for the digital entertainment business.

Spotify retains the lead in paid subscriptions, followed by Apple Music, Amazon Music and YouTube Music.

DIMA reminds that North America’s digital integration depends on frictionless access between the three countries. Online music, they say, transformed what were once isolated markets into a unified creative territory, where Mexican, American and Canadian artists circulate without borders and find new audiences. Any barrier that affects that ecosystem, they emphasize, damages the regional cultural economy.

The review of the T-MEC opens the door to correct the imbalances, affirms the association. It insists that the three countries must reinforce the commitment to non-discriminatory treatment, eliminate unnecessary obstacles and ensure that the digital framework maintains competitive conditions.



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