We would like to ensure that you are still receiving content that you find useful – please confirm that you would like to continue to receive ILO newsletters.
15 June 2006
On April 25 and 27 2006 - after months of lobbying by the Federal Competition Commission - the Mexican Congress approved the anticipated amendments to the Federal Law on Economic Competition. The amendments will become effective one business day after their publication in the Official Gazette. It is expected that this will occur within the next couple of weeks.
The most significant amendments concern monopolistic practices, merger control, the commissions administrative procedure and the leniency policy.
Joint responsibility is established between the economic agents carrying out the monopolistic practice and economic agents that adopted the decision to carry out such (eg, a parent company and its subsidiaries).
Certain relative monopolistic practices (ie, abuse of dominance) previously identified in the regulations are now incorporated in the law, eliminating the constitutional concerns previously raised. The 'new' relative monopolistic practices are:
The concept of efficiency gains is now incorporated in the law as mitigating abuse of dominance.
The filing thresholds are increased by between roughly 50% and 75%. Therefore, a concentration must be notified to the commission when the transaction(s):
A de facto waiting period of 10 business days was established, as the commission now has the authority to prevent the parties from closing a transaction until a resolution is issued. The parties will be in a position to close the transaction after such waiting period has elapsed, on the understanding that they assume the risk of closing the transaction prior to clearance.
The amendment incorporates the commission's ability to conduct inspection visits at the domicile of economic agents subject to an investigation in order to obtain information on the alleged prohibited conduct under review. Previous authorization from a competent court is required to carry out such. The commission is not authorized to seize documents, but only to obtain copies.
Fines are revised and substantially increased (by approximately 400%). New fines are also established for certain breaches (eg, for providing false information when notifying a concentration and for breaching a compromise undertaken before the commission). Under certain circumstances, the commission may force the sale of the assets of an economic agent that is implicated in a third monopolistic practice (on the understanding that the prior two instances should have been duly penalized by the commission).
Third parties affected by monopolistic practices will be entitled to file a civil lawsuit seeking indemnification without needing to be a party to the administrative procedure.
Certain procedural requirements previously established by the regulations to the law are now included in the amendment, eliminating the constitutional concerns that have been raised.
A five-year statute of limitations for the commission to investigate monopolistic practices or forbidden concentrations has been incorporated in the law.
The leniency policy recently approved by the commission is now incorporated in the law. Therefore, any economic agent that was or is participating in an absolute monopolistic practice (ie, a cartel) may approach the commission and request the benefit of a reduction in fine (a minimum fine should be imposed as a result of this policy). The requirements for benefiting from the policy are substantially similar to those established by such policies worldwide. The policy also provides for the possibility of reductions in fines (by between 30% and 50%) for those agents that are not first to request such.
For further information on this topic please contact Luis Gerardo García Santos Coy or José Ruíz López at Creel, Garcia Cuellar y Müggenburg SC by telephone (+52 55 1105 0600) or by fax (+52 55 1105 0690) or by email (email@example.com or firstname.lastname@example.org).
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
ILO is a premium online legal update service for major companies and law firms worldwide. In-house corporate counsel and other users of legal services, as well as law firm partners, qualify for a free subscription.
Luis Gerardo Garcia Santos Coy
José Ruiz López