A Q&A guide to competition law in Mexico.
The Q&A gives a high level overview of merger control, restrictive agreements and practices, monopolies and abuse of market power, and joint ventures. In particular, it covers relevant triggering events and thresholds, notification requirements, procedures and timetables, third party claims, exclusions and exemptions, penalties for breach, and proposals for reform.
To compare answers across multiple jurisdictions visit the Competition law Country Q&A tool.
This Q&A is part of the PLC multi-jurisdictional guide to competition and cartel leniency. For a full list of jurisdictional Competition Q&As visit www.practicallaw.com/competition-mjg.
For a full list of jurisdictional Cartel Leniency Q&As, which provide a succinct overview of leniency and immunity, the applicable procedure and the regulatory authorities in multiple jurisdictions, visit www.practicallaw.com/leniency-mjg.
The Federal Law of Economic Competition (Ley Federal de Competencia Económica (Competition Law)) provides that mergers and acquisitions that have effects in Mexico and trigger certain economic thresholds (§20, Competition Law):
Are subject to merger control.
Require prior notification to the Federal Competition Commission (Comisión Federal de Competencia) (FCC).
The FCC is responsible for merger control. The FCC is an administrative body, consisting of five federal commissioners and is deals with all competition matters in Mexico (see box, The regulatory authority). There are no state-level authorities responsible for competition matters. Merger control is carried out by either:
Voluntary filing.
Mandatory filing.
Investigations commenced by the FCC.
The FCC is currently preparing:
New Regulations applicable to both the Competition Law and the structure of the FCC.
Guidelines concerning different topics, such as definitions for "relevant market" and "collective dominance".
See also Question 39.
Please note: the expression "economic agents" (which carries a specific meaning under Mexican legislation) is referred to in this chapter as either a company, companies or the parties.
The Competition Law applies to concentrations. A concentration is broadly defined and includes (§16, Competition Law):
Mergers.
Purchase of assets.
Equity purchases.
General acquisition of control.
There are certain transactions listed in §21 of the Competition Law that meet the relevant thresholds (see below) but are exempt from notification. This is because they are not concentrations in the true sense (for example, corporate reorganisations, creations of trusts, certain share acquisitions and so on). Under the Competition Law, the following transactions do not fall within the definition of a concentration (§21-bis 1):
Corporate reorganisations (that is, companies that belong to the same group of economic interest).
Subsequent increases of participation by the controlling shareholder.
The creation of trusts without the intention of the parties to transfer assets to a third party different from the trustee (however, there will be an obligation to notify on reaching the relevant thresholds if a guarantee trust is executed).
Transactions performed abroad, if the companies involved did not acquire the control or accumulate the shares, equity or general assets of Mexican companies.
Transactions in the Mexican stock exchange that as a consequence will not bring decisive or substantive influence or control over the acquired company.
Transactions in the Mexican stock exchange when the acts or successive acts do not bring control over the acquired company since the:
purchaser will not hold 10% or more of such shares, equity or other instruments; and
purchaser will not have the authority to either:
appoint or revoke members of the board of directors, or managers;
impose decisions;
maintain rights that allow the vote exercise of 10% or more; or
instruct, or influence in any manner, the management, operation, and so on, of a company.
Acquisitions of shares or equity or participation in trusts by one or more investment funds which have only speculative purposes.
Concentrations are subject to prior notification to and clearance from the FCC if they reach any of the following thresholds (§20, Competition Law):
Value of the transaction. Transactions involving an act (or a series of acts) worth the equivalent of 18 million times the minimum general wage in force for the Federal District (GMW) (as at 23 December 2011 the GMW was MXN62.33) (about US$4.50) (as at 1 December 2011, US$1 was about MXN13.76), that have an economic effect within Mexican territory regardless of where the transaction is executed.
Size of the acquired company. Transactions involving an act (or a series of acts) which accumulate at least 35% of the assets or capital stock of an company whose assets in Mexico or annual sales originated in Mexico involve more than the equivalent of 18 million times the GMW.
Size of the participants of the transaction and accumulated assets in Mexico. The transaction involves both:
an act (or series of acts) which accumulate assets or capital stock in Mexico that is higher than 8.4 million times the GMW; and
the participation of two or more companies whose assets, or worldwide annual sales, jointly or separately, reach more than 48 million times the GMW.
Companies must notify the FCC of concentrations that have an effect in Mexico and meet the statutory thresholds of §20 of the Competition Law (see Question 2, Thresholds). The Competition Law also does not forbid companies from filing concentrations voluntarily.
A company may make voluntary a notification to seek legal certainty in cases that are close to the thresholds and to avoid any possible investigations regarding office or position (ex officio) (see Question 10). The purpose is to assure the company that the FCC will approve the operation and not investigate the concentration during the first year after the transaction is completed.
The FCC is currently drafting new Regulations to the Competition Law which will take effect early next year. It is possible that the new Regulations will include additional exemptions.
Under the current Regulations, prior notice or notification of a concentration must be made to the FCC before any of the following (§18, Competition Law):
Full execution of the transaction or satisfaction of the condition precedents.
Legal or de facto acquisition of control, assets, participation in trusts, shares and equity.
Execution of a merger agreement.
A series of events that when completed will eventually reach any of the statutory thresholds. This includes companies carrying out a concentration abroad that has an effect in Mexico (and triggers the relevant thresholds).
The FCC's webpage provides guidance on:
How the FCC interprets the statutory provisions.
The relevant information and documents usually requested by the FCC.
Prior to making a notification it is possible for a party to seek informal advice (consultation) from the FCC regarding any notification (§24-X, Competition Law). However, the FCC's written response is not legally binding.
As a general rule, both parties participating in a transaction reaching any of the mandatory thresholds must file a notification to the FCC (joint filing). If for legal or factual reasons accepted by the FCC an economic entity participating in the transaction cannot make the notification, the merging/acquiring entity must make the filing on the other party's behalf.
The FCC is the relevant authority for notification. The Merger or Concentration General Direction of the FCC will:
Review the filings.
Make requests for information.
Prepare a draft resolution.
Once the above has been carried out, the FCC in a plenary session will discuss and resolve to either:
Approve the transaction.
Establish conditions for the transaction.
Oppose the transaction.
There is no standard notification form. The relevant requirements for notification are provided in §21 of the Competition Law and its Regulations.
The FCC filing office must receive the filing.
Currently, there are no filing fees.
The FCC can issue a stop order within ten business days of the date of filing.
During this ten-day period, the FCC forbids the parties from closing (that is, completing the transaction) until the FCC clears the transaction. If the FCC fails to issue a stop order the parties can close transactions at their own risk (the FCC can still challenge or issue conditions relating to the transaction without a stop order being in place).
Two procedures are applicable:
Standard review procedure.
Fast track procedure.
Standard review procedure. The FCC must issue its decision within 35 business days from the date of receiving both the notification and all requested information.
If the FCC fails to issue a decision at the end of this term, this is considered to be a tacit approval of the proposed concentration. In exceptional and/or complex cases, the FCC can extend the term for further 40 business days (on receiving all additional information requested from the parties).
The FCC can request additional information:
Within five business days of the filing date (and will grant the parties a period of five business days to respond).
Within 15 business days of the response to the first request for information, for any further additional information.
Fast track procedure. If the parties can conclusively prove that it is widely accepted that the concentration does not have the effect of diminishing, damaging or impeding competition, an expedited procedure is available (see below). Under this procedure, the FCC will resolve the filing within 15 business days of acknowledging receipt of the notification (which happens five business days following the date of filing).
Transactions that do not have the obvious purpose or effect of diminishing, damaging or impeding competition are (Regulations to §24, Competition Law):
Transactions that involve the purchaser's first participation or entry into the relevant market.
Transactions where the purchaser holds no control of the acquired agent (see Question 3).
Transactions where the purchaser has the control of a company and increases its capital stock participation.
For an overview of the notification process, see flowchart, Mexico: merger notifications.
The FCC has launched a new transparency policy which includes a public webpage (www.cfc.gob.mx) listing merger cases that have been completed. However, confidential information is not included in the publication of these cases.
The FCC also publishes on its website a list of notified cases, which discloses:
The identity of the notifying parties.
The docket number.
A short excerpt of the relevant ruling or content of the decision (that is, whether the FCC has approved the transaction).
During its investigation of the concentration, the FCC releases certain information concerning the parties, including:
The names of parties.
The docket or file number.
Whether the concentration is to be cleared, conditioned or opposed.
However, it cannot provide any further information on the transaction until the process is finalised.
The Competition Law provides no automatic confidentiality provisions.
The parties must request that specific information be kept confidential. Therefore, the parties must provide both:
Sufficient grounds justifying confidentiality.
Depending on the nature of the information, a public summary of the information that can be used in place of disclosing the information in its entirety. A public summary must always be provided, except in those cases where the information is impossible to summarise (for example, charts with numbers, amounts and so on).
Third parties cannot formally participate during the review process. However, it is common for the FCC to request information from third parties in order for them to file briefs during the review process.
Third parties cannot appeal any resolution from the FCC directly to the FCC (though other rights of appeal do exist once the FCC has reached a decision (see Question 10, Third party rights of appeal).
Third parties have no access to the documents during the review process. The FCC alone has full access to documents during the review process.
The Competition Law does not provide the right to be heard to third parties during the review process. Exceptionally, third parties have been granted a right to be heard before federal courts by arguing their constitutional rights were impaired.
The FCC will challenge and sanction concentrations whose purpose or effect is to diminish, damage or impede market competition by either (§17, Competition Law):
Fixing prices or restricting output.
Having any exclusionary purpose or effect.
Facilitating the commission of monopolistic practices.
When applying the above tests to a concentration, the FCC will:
First define the relevant markets involved (both product and geographic markets) and assess the degree of market concentration, and changes in the level of market concentration resulting from the transaction, using the HHI (Herfindahl−Hirschman Index) and other concentration measures.
If this initial analysis reveals potential competition concerns, it will then review:
barriers to entry;
vertical effects of the transaction;
the effects of the concentration in related markets; and
the potential efficiency gains that the parties have raised.
The FCC can impose conditions on a transaction, which can be behavioural or structural (such as divestments). The FCC generally prefers structural conditions because they:
Are easier for the company to comply with.
Do not require significant follow-up actions.
The parties to the transaction can propose remedies during both the review and further appeal processes (see Question 10). Once the FCC accepts such remedies, the parties must provide an implementation plan that includes a time frame to comply with them.
The FCC can impose a fine of up to 5% of the company's annual income for tax purposes (§35-VII, Competition Law) where there has been a failure to notify correctly. This amount excludes the company's income held outside Mexico.
The FCC can impose a fine of up to 8% of the company's annual income for tax purposes (§35-VI and XII, Competition Law) where a stop order is ignored or an illegal concentration is completed before the FCC reaches its decision (see Question 3, Obligation to suspend). This amount excludes the company's income held outside of Mexico.
In the event of a prohibited concentration, the FCC can also order the total or partial winding up of the entity created as a result of the concentration (§35-II, Competition Law).
Companies. If the FCC imposes conditions on a concentration, and the corresponding company fails to comply, the FCC can impose (§35-VIII, Competition Law):
Fines of up to 10% of the company's annual income for tax purposes (this amount excludes the company's income held outside of Mexico).
The total or partial winding up of the entity created as a result of the concentration.
In some cases, the FCC will apply both penalties to a concentration.
Individuals. Individuals can also be subject to fines. These fines may be:
Up to 200 thousand times the GMW (about US$868,845.3) for those directly participating in an illegal concentration.
Up to 180 thousand times the GMW (about US$781,960.8) for assisting an illegal concentration.
175 thousand times the GMW (about US$760,239.7) for providing false information.
Parties can challenge a decision of the FCC in two ways:
Reconsideration motion. Using this method, the party raising the challenge must file the motion within 30 business days of receiving notification of the FCC's decision. On receiving the notice of the challenge, the FCC must resolve the motion within 60 business days.
If the parties wish to challenge the decision of the reconsideration motion, they can file a constitutional process (amparo) before the Federal Courts. If the parties wish to challenge the decision of the Federal Court, they can file a federal appeal against its judgment.
Administrative ordinary proceeding (juicio ordinario administrativo federal). Following the amendments to the Competition Law that came into effect on 11 May 2011, the reconsideration motion is optional and the parties can appeal an FCC decision through an administrative ordinary proceeding before the Federal Court (§39, Competition Law). Further, there is the opportunity to have a federal court hear the last challenge (juicio de amparo) that deals with violations to fundamental human rights.
The implementing rules for an administrative ordinary proceeding are still pending discussion before the Mexican Congress. This new procedure will substantially change the way the FCC's decisions can be challenged. There will also be specialised competition courts within the Federal judiciary to hear the administrative ordinary proceedings.
The Competition Law does not recognise third party standing to file challenges or appeals against the FCC's decisions.
However, parties who believe that the result of the concentration could harm them have the right to challenge the concentration before a Federal Court (this is a fundamental human right to a hearing before the rendering of an adverse resolution). This has occurred in a few cases but it is unlikely that the Competition Law or the FCC's policy will change in the near future as a result of this human rights law aspect.
In addition, third parties can bring claims to challenge concentrations, or the FCC could commence an ex-officio investigation, where either:
An approval is granted to a concentration based on false information provided during the review process.
The applicant fails to comply with transaction conditions.
A transaction does not reach the triggering thresholds, but has the potential for significant impact on the marketplace (such as in small or medium markets). The FCC may investigate these types of transactions at any time for one year after the transaction is concluded.
When assessing a concentration the FCC will analyse provisions, such as non-compete covenants, before approving them. To be approved by the FCC, non-compete covenants must:
Have a duration of no more than three years (although the FCC can approve non-compete provisions for up to five years).
Be limited to specific individuals and specify the scope of the products.
Be limited to the territory in which the provision can be effective to the operations of the target company.
If the FCC considers such provisions to be restrictive, it will request that the parties either remove or modify them.
Certain sectors within the Mexican economy require specific regulation for competition matters. These sectors include industries such as energy, telecommunications and transport (see Question 15).
These sectors generally require a favourable opinion from the FCC to execute the following tasks:
Participate in public bids.
Establish rules for the regulation of tariffs.
Transfer or assign permits and government concessions.
Acquire government concessions or permits.
The Competition Law regulates horizontal and vertical practices. These are known as (§9 and 10):
Absolute monopolistic practices (cartels or horizontal agreements).
Relative monopolistic practices (vertical agreements).
Such practices are prohibited under the Competition Law.
In order for the FCC to determine the existence of monopolistic practices, the company or companies carrying out the monopolistic practices must both:
Have substantial power within the relevant market.
Perform monopolistic practices concerning the goods or services in that market.
Absolute monopolistic practice. This is any contract, agreement, arrangement, understanding (or a combination of these) between competitors that has the purpose or effect of any of the following:
Price-fixing.
Output restriction.
Allocating segments of a particular market.
Co-ordination of bids on public procurements.
On 11 May 2011, the Mexican Federal Congress published an amendment to the Federal Criminal Code determining that, for cartel activity in all markets, criminal sanctions apply (punishable by three to ten years' imprisonment).
Under the Federal Criminal Code, Cartel behaviour is generally the same as absolute monopolistic practice. However, there are two main differences:
Absolute monopolistic practice sanctions both the effect and purpose, while criminal behaviour sanctions only the purpose.
§9-1 of the Competition Law sanctions price fixing or the exchange of information with that purpose or effect, while criminal behaviour does not include the exchange of information.
Relative monopolistic practice. This is any contract, agreement, arrangement, understanding (or a combination of these) between companies that are not competitors, whose purpose or effect is, or could be:
Imposing or setting vertical restrictions.
Resale price maintenance.
Tie-ins.
Imposing exclusive conditions to sell or purchase.
Refusal to deal.
Boycott (pressure of several competitors against another competitor).
Predatory pricing.
Loyalty rebates and discounts.
Price discrimination.
Cross-subsidies.
Increasing competitor's costs or hindering their access to the market.
The Competition Law applies to both:
Formal/written anti-competitive agreements.
Informal/non-binding arrangements or understandings.
The FCC seeks to protect competition and market access through the prevention, elimination and punishment of any practices that alter competitive commercial behaviour and hinder consumer welfare, regardless of whether they are the result of direct or indirect contact between the parties.
The Competition Law does not provide for either "block exemptions" or "individual exemptions" from the prohibition on absolute or relative monopolistic practices. However, in analysing relative monopolistic practices (vertical agreements), a rule of reason/structured rule of reason approach is used (§10, Competition Law). Under this approach, a balancing test is used to determine whether pro-competitive effects outweigh adverse or anti-competitive effects. The FCC, therefore, has discretion to determine whether the practices have a negative effect on society or not, and to what extent. By contrast, a per se approach is applied in relation to absolute monopolistic practices (horizontal agreements).
Further, Article 28 of the Mexican Constitution provides exemptions from the application of the Competition Law for the exercise by the Mexican state/government of its exclusive power over certain industry sectors. These sectors include:
Post/mail.
Petroleum/hydrocarbons/petro chemistry.
Energy/electricity.
Nuclear energy.
Transport.
Coin minting.
Other exemptions apply to:
Worker unions.
Patent and copyright owners.
Associations of exporters (under certain conditions).
In addition, the Mexican Supreme Court recently declared laws which appear to allow price fixing in two different industries as being constitutional. These laws relate to the following industries:
Sugar (Law of Sustainable Sugar Development (Ley de Desarrollo Sustentable de la Caña de Azúcar)).
Books (Book and Reading Promotion Law (Ley de Fomento para la Lectura y el Libro)).
There are no express exclusions under the Competition Law and there is no equivalent to the de minimis concept used in EU law. As above, however, the FCC applies the rule of reason approach to assessing vertical agreements.
The FCC's authority to investigate and sanction any monopolistic practices or other illegal conduct is limited to a period of five years (§34bis 3, Competition Law). This period commences on the date the illegal behaviour occurred.
If the illegal behaviour is continuous, it is possible for the FCC to seek an interpretation that the five-year period commences when the illegal behaviour has stopped.
There are no notification requirements for restrictive agreements and practices. However, parties can file a petition to the FCC for its legal opinion (consultation) (§24-IX, Competition Law). The corresponding response/opinion issued by the FCC is:
Not binding.
For consultation purposes only.
In addition, the 2011 amendments to the Competition Law provide that the FCC should issue opinions, when necessary, regarding commercial practices and how they relate to competition and free market access. This means the FCC must now publish its opinions for the benefit of companies and the general public.
The FCC can start an investigation either (§30, Competition Law):
By virtue of their position (ex officio).
By specific complaint.
Any person can file a complaint before the FCC in cases of horizontal agreements. However, only parties with specific legal standing (that is, who have suffered specific harm) can file complaints concerning vertical restraints (§32, Competition Law).
The FCC or the injured party must file relevant evidence to prove that there has been an infringement of the Competition Law.
Complainants and third parties can assist the FCC during its investigation by providing any evidence or piece of information that is relevant to the investigation (either voluntarily or through a mandatory request from the FCC).
During the investigation, complainants and third parties cannot access the investigation docket (§31 bis, Competition Law).
However, once the President and Executive Secretary of the FCC have issued a Statement of Objections (Statement) during the adversarial stage of the proceedings (see Question 20) all parties with legal standing can access the docket (though this does not include access to the third party's confidential information).
During its investigation, the FCC can request information or respond to filings from the participants in the proceedings. However, third parties (other than those with standing) do not have a right to be heard during proceedings.
Under the Competition Law, the FCC's proceedings are divided into two stages:
Investigation.
Adversarial proceedings.
The investigation commences when the FCC publishes an initial ruling in the Federal Official Gazette. The initial ruling must state the likely practices and relevant market subject to investigation.
The FCC then has between 30 and 120 business days to conduct its investigation which, in justifiable cases, can be extended by up to four times (480 business days).
During the investigation, any person can assist the FCC and provide evidence concerning the infringement and relevant market. The FCC can also:
Request information from any party.
Compel any individual to appear before the FCC to testify or answer interrogatories.
The Competition Law provides for a Mexican version of a dawn raid (that is, a surprise and compulsory inspection instead of documents and information) (§31 Competition Law). See Question 22.
On completing the investigation, the FCC will either issue a Statement or close the docket. The Statement contains:
The identification of the presumed wrongdoer.
The practices subject to investigation.
The arguments and specific reasoning and legal grounds.
All supporting evidence.
If the FCC considers the damage to competition to be potentially irreversible, it may order a stay on the execution of the monopolistic practices. The stay is a specific provisional or precautionary measure that can be ordered by the FCC after a Statement has been issued. It cannot be ordered during the investigation stage (§33, Competition Law).
The FCC must then:
Serve the Statement on each of its addressees personally.
Grant each of the Statement's addressees a non-extendable, statutory term of 30 business days to:
file a written detailed response;
provide evidence (such as documents and questionnaires from expert witnesses); and
object documents (that is, question the authenticity, scope or applicability of the documents served).
The FCC then has 20 business days to determine the admissibility and relevance of any evidence provided. Once the evidentiary stage ends, both parties have the opportunity to:
Have an oral hearing before the FCC.
File written closing arguments.
Finally, the FCC will grant an oral hearing for closing oral arguments. The FCC will issue its final decision within 40 business days. The parties can appeal (reconsideration motion) the FCC's decision within 30 business days of receiving their personal notification of the FCC's decision (see Question 10).
Except for the publication of the initial ruling that formally starts the investigation, all information must be kept confidential by the FCC during the investigation (§31-bis, Competition Law).
During the adversarial proceedings, only the parties with legal standing have access to the docket and therefore, to all information that ensures a proper defence (excluding the information that the parties have specifically classified as confidential information that the FCC has agreed is confidential information).
The Competition Law provides no automatic confidentiality provisions.
The parties must request that specific information be kept confidential. Therefore, the parties must provide both:
Sufficient grounds justifying confidentiality.
Depending on the nature of the information, a public summary of the information that can be used in place of disclosing the information in its entirety. A public summary must always be provided, except where the information is impossible to summarise (such as charts with numbers, amounts and so on).
The Mexican Congress recently strengthened the FCC's investigation powers by amending the Competition Law in 2011. With these new powers, the FCC can now:
Issue written requests for information.
Summon any person to appear before the FCC to testify and answer interrogatories.
Conduct dawn raids without further notice.
Order provisional measures.
Grant immunity or leniency (see Question 24).
The Competition Law provides both:
Special procedures to reduce fines and liability in vertical agreements (or even mergers).
An immunity/leniency procedure for horizontal agreements.
The procedure for vertical agreements provides that, before the FCC issues the final resolution, the company can file a writ with certain commitments to suspend, correct or stop the practices (§33 bis 2). The company must prove that the:
Commitments will protect competition in the relevant market.
Measure is appropriate to accomplish that objective.
After receiving and analysing the writ, the FCC will suspend the procedure and review its implications. The FCC then concludes the procedure by either:
Closing the file and not imposing liability on the wrongdoer.
Charging and imposing a fine of up to half of the sanction set out in the statute.
These measures are carried independently by the FCC and are separate from other claims for damages and lost profits that may also be filed by other parties.
The FCC's sanctions include the power to:
Order an illegal monopolistic practice to stop (stop order).
Impose conditions to correct an illegal monopolistic practice.
The FCC can impose the following maximum administrative fines on companies:
175,000 times the GMW (about US$760,239.70) in the case of perjury or false information delivered to the FCC.
10% of the annual tax income of the wrongdoer, in horizontal agreements, irrespective of any additional criminal liability.
8% of the annual tax income of the wrongdoer, for a relative monopolistic practice or vertical restraint.
For repeat offenders, the FCC can double the above fines. In addition, under the Federal Criminal Code any cartel behaviour or horizontal practices are sanctioned with a fine between 1,000 and 3,000 GMW (about US$13,650) and three to ten years' imprisonment.
Individuals are personally liable for their participation in a prohibited restricted agreement or practice and can face:
Criminal liability (in cases of intentional cartel behaviour).
Fines and damages. Failure to pay penalties gives rise to an administrative proceeding. The fines are currently:
200,000 times the GMW (about US$868,845.30) for individuals acting on their own or on behalf of a company;
180,000 times the GMW (about US$781,960.80) for individuals aiding, abetting, or participating in a monopolistic practice.
Companies participating in absolute monopolistic practices can secure an amnesty or leniency by confessing their participation in these practices and request a substantial reduction in the fine. The FCC will grant an amnesty status to the first applicant. Subsequent applicants will receive further reductions in fines. Amnesty applicants can receive a minimum fine (as little as one GMW (about US$4.3)).
To obtain immunity, the company must:
Submit a request for immunity before the conclusion of the investigation.
Provide evidence as to the existence of the cartel behaviour.
Fully and continuously co-operate with the FCC during and after the investigation.
Carry out the necessary actions to end the illegal practices.
Participants of a horizontal agreement who contribute and come forward with new information can receive a fine reduction of up to either 50%, 30% or 20% of the fine, depending on:
Who is first to volunteer the information.
The FCC's criteria (see below).
Whether the information is valuable (and not already provided by another applicant).
There is no marking or marker system in Mexico. This means that it is impossible to know with any certainty whether you are the first, second or third applicant to apply for leniency/immunity after filing an application. It could be the case that the FCC receives several applicants at the same time without any applicant knowing their position in the "queue".
In addition, not every party who applies first is entitled to a sanction reduction. The information provided must comply with both the FCC’s criteria and importance. However, this criteria is not public or formal.
The following contracts, agreements, arrangements (or combinations of any of these) between competitors are automatically void:
Price fixing (or exchanging information to that purpose or effect).
Restricting output.
Dividing markets.
Being involved in bid rigging.
Previously, parties were only entitled to claim damages and lost profits once the FCC resolution becomes res judicata (that is, declared conclusive by a competent court). However, following the 2011 amendments to the Competition Law, the rules have (arguably) been modified to allow parallel civil and administrative litigation.
The Mexican Congress recently enacted a special procedure to claim damages through class actions. As of 28 February 2012, parties must file an individual or class civil lawsuit to prove the existence of the damages or loss of profits. The parties must evidence individual harm (direct and immediate damage test).
A new chapter within the Federal Code of Civil Proceedings grants Federal Courts jurisdiction to hear cases concerning class actions.
The parties with standing to file a class action claim are:
The FCC.
The class representative (for at least 30 members).
Civil organisations.
The Attorney General.
See Question 10.
See Question 10.
The Competition Law prohibits the existence of monopolies and monopolistic practices. However, the Competition Law does not prohibit the holding of a monopoly position, but only the abuse of market power.
The Competition Law prohibits abuse of market power on collective dominance as a result of any of the acquisitions that constitute an absolute monopolistic practice (see Question 13).
Market power. To determine if a company has market power, the FCC considers the:
Company's market share and its ability to set prices or restrict output unilaterally.
Existence of barriers to entry.
Existence of competitors and their market power.
Access to the company's source of supply and that of its competitors.
Company's recent behaviour.
Positioning of the goods/services in the market.
Possibility of accessing imports and the associated costs.
Cost for consumers purchasing goods/services from other suppliers.
Collective dominance. This is a new concept introduced by the 2011 amendments to the Competition Law. Under these new rules, the FCC will consider a company's pattern of behaviour over a period of time, and if there are barriers for entering a specific market group (§13bis). It is likely that the new regulations and guidelines to the Competition Law will provide supplementary rules to assist in determining collective dominance.
See Question 13.
See Questions 15 and 16.
It is not necessary to notify the conduct in order to obtain clearance from the FCC. However, the FCC's legal opinion (consultation) can be useful to the company (see Question 17).
There are no specific differences (see Questions16, 18 to 21 and 23).
See Question 22.
See Question 24.
See Question 25.
See Question 25.
See Question 25.
Not applicable.
The FCC typically treats joint ventures as concentrations (see Questions 1 to 12).
However, in some cases the FCC will consider that joint venture concentrations are, in fact, monopolistic practices, as they can be used as vehicles for collusion.
The FCC has co-operation agreements with the competition authorities of:
The US.
Canada.
Chile.
South Korea.
These co-operation agreements:
Regulate the exchange of information between agencies to promote the correct application of competition laws.
Foster co-ordination between agencies to avoid jurisdictional conflicts.
Mexico has also executed free trade agreements with the US, Canada, EU, Iceland, Norway, Liechtenstein, Switzerland, Israel, Chile, Colombia, Venezuela, Uruguay, and Japan. These free trade agreements also contain rules for co-operation between competition agencies.
The Mexican Congress enacted three large amendments to the Competition Law in 2011:
May 2011: strengthening the FCC enforcement powers, increasing penalties and meeting international standards and best practices.
May 2011: criminalising cartel behaviour as a federal crime.
August 2011: introducing class actions (effective on or about, 28 February 2012).
There are also proposals to:
Create specialised competition courts within the federal judiciary.
Implement supplementary rules for the new challenge procedure, including Competition Law Regulations, internal regulations and guidelines (due in 2012) (see Question 10, Rights of appeal and procedure).
In addition, on 11 May 2011 the Federal Congress passed a substantial amendment which created the concept of a position of joint dominance/collective dominance (see §13 bis, Competition Law). The FCC is in the process of issuing a commission notice or guideline on this concept.
Head. Dr Eduardo Pérez Motta (Chairman)
Contact details. Av. Santa Fe #505, 24th floor
Col. Cruz Manca
Del. Cuajimalpa
C.P. 05349
México, D.F.
México
T +52 55 27 89 65 00
F +52 55 27 89 66 72
E eperez@cfc.gob.mx
W www.cfc.gob.mx
Outline structure. The FCC is an administrative body with five Commissioners. One Commissioner serves as Chairman, who has the casting vote on the decision. The Mexican President appoints all Commissioners, including the FCC's Chairman. The current Commissioners are the following:
The FCC deliberates in a collegiate manner and decides its cases by majority votes. The Chairman is also responsible for co-ordinating the FCC's activities and representing the FCC. Among other positions, the FCC's staff includes the:
Responsibilities. The FCC is responsible for protecting competition and free market access through the prevention, elimination and punishment of any kind of monopolistic practices, and other restrictions of the performance of an efficient market.
Procedure for obtaining documents. Parties with legal standing can request copies or documents from the FCC's files (within adversarial procedures) except for confidential information. Any party can have access to closed cases.
All public decisions, resolutions and authority notifications on concentrations, monopolistic practices, investigations, opinions, motions, and so on, are accessible using a search tool available on the FCC's website.
T +52 55 50 91 01 62
F +52 55 50 91 01 23
E ogr@bstl.com.mx
W www.bstl.com.mx
Qualified. Mexico, 1991; England and Wales 1997
Areas of practice. Competition/antitrust; litigation (mainly commercial and administrative); commercial arbitration; reorganisation and bankruptcy.
Recent transactions
T +52 55 50 91 01 66
F +52 55 50 91 01 23
E rpm@bstl.com.mx
W www.bstl.com.mx
Qualified. Mexico, 1993; England and Wales, 1997
Areas of practice. Competition antitrust law; corporate law; foreign investments; mergers and acquisitions, and mining.
Recent transactions
T +52 55 50 91 01 53
F +52 55 50 91 01 23
E cro@bstl.com.mx
W www.bstl.com.mx
Qualified. Mexico, 2004
Areas of practice. Competition/antitrust law; litigation (mainly commercial and administrative); administrative and constitutional law.
Recent transactions
T +52 55 50 91 01 53
F +52 55 50 91 01 23
E arc@bstl.com.mx
W www.bstl.com.mx
Qualified. Mexico, 2011
Areas of practice. Competition/antitrust law; litigation (mainly commercial and administrative); administrative and constitutional law.
Recent transactions
T +52 55 50 91 01 53
F +52 55 50 91 01 23
E jadr@bstl.com.mx
W www.bstl.com.mx
Qualified. Mexico, 2011
Areas of practice. Competition/antitrust law; litigation (mainly commercial and administrative); administrative and constitutional law.
Recent transactions
T +52 55 50 91 01 53
F +52 55 50 91 01 23
E schl@bstl.com.mx
W www.bstl.com.mx
Qualified. Mexico, 2010
Areas of practice. Competition/antitrust law; litigation (mainly commercial and administrative); administrative and constitutional law.
Recent transactions
