Mexican competition regulator expected to step up enforcement

Both the acquirer and the seller in a deal have responsibility for obtaining approval from the competition authority

 

Lawyers predict that the evolution of the Mexican competition regulator into a ‘Super Agency’ means it will be embarking on an increasing amount of enforcement actions, particularly in the financial, agrifood, energy, transportation and healthcare sectors.
Gerardo Calderón, senior associate at Baker McKenzie in Mexico, argues that changes to the framework of the Mexican Federal Economic Competition Commission (which is known as COFECE in accordance with its Spanish acronym) has strengthened the regulator by conferring broad powers to investigate and sanction monopolies and monopolistic practices. Calderón expects a substantial increase in enforcement actions by COFECE, especially in the aforementioned sectors, in which the agency has said it will be focusing its efforts.
There have been major changes to antitrust legislation in the past decade in Mexico, each widening the scope and powers of COFECE. Meanwhile, the liberalisation of some industry sectors in Mexico and the increasing complexity of transactions mean pressure is mounting on the antitrust regulator to become more active and sophisticated, according to Hernán González, managing partner at the Mexico City office of Norton Rose Fulbright.

Alleged cartel    
There are signs that COFECE is indeed stepping up its activities, evidenced by a number of the regulators’ rulings during the last year, says Omar Guerrero, partner at Hogan Lovells. Guerrero cites examples such as the regulator investigating the Mexican treasury bonds market for alleged cartel behaviour, the issue of fines for taxi companies for alleged cartel behaviour at the International Airport in Mexico City, penalties issued for the Jalisco Agrarian Development Secretary for price fixing in the tortilla market, as well as conditional approval for a deal involving airlines Delta and Aeromexico.
COFECE is continuously issuing and revising guidelines and opinions that, while not necessarily mandatory, certainly show certain trends, González says. He adds that the regulator has initiated and conducted investigations related to mergers, cartel arrangements, price-fixing, and bid-rigging. González explains that antitrust approval in Mexico is the responsibility of both purchaser and seller and, as obtaining such approval may take anything from a few weeks to many months, he recommends that parties should begin work on the filing as soon as practicably possible, preferably in parallel to their commercial discussions. In addition, it is important to seek local legal advice prior to, and during, any discussions or negotiations with competitors or potential competitors to ensure no antitrust laws are inadvertently infringed, he adds.

Garcia-Sicilia

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