Antitrust Law in Mexico
Introduction
Mexican antitrust law is primarily governed by the Federal Economic Competition Law (Ley Federal de Competencia Económica, LFCE), enacted in 1992 and substantially reformed in 2014. The law is designed to promote economic competition, prevent monopolistic practices, and protect consumer welfare. The Federal Economic Competition Commission (Comisión Federal de Competencia Económica, COFECE) is the autonomous constitutional body responsible for enforcing competition law across most sectors, while the Federal Telecommunications Institute (IFT) has concurrent jurisdiction over telecommunications and broadcasting.
Constitutional Framework
Since the 2013 constitutional reform, COFECE and IFT are autonomous constitutional bodies with technical and operational independence. Article 28 of the Constitution prohibits monopolies, monopolistic practices, state monopolies (except for strategic areas), and tax exemptions designed to protect specific enterprises. The constitutional reform strengthened COFECE’s powers, including the authority to order the divestiture of assets to address competition concerns.
Prohibited Practices
The LFCE distinguishes between absolute and relative monopolistic practices. Absolute monopolistic practices are per se illegal and include price fixing, output restrictions, market allocation, bid rigging, and information exchange among competitors. Relative monopolistic practices are subject to a rule of reason analysis and include predatory pricing, exclusive dealing, tying, refusal to deal, and loyalty discounts. Both types may result in significant fines, remedial orders, and criminal liability for individuals involved in cartel activity.
Merger Control
The LFCE requires mandatory pre-merger notification for transactions exceeding specified monetary thresholds. COFECE reviews mergers to assess whether they may substantially lessen competition in relevant markets. The review process has three phases: an initial investigation (15 business days), an extended investigation (additional 60 business days) if competition concerns arise, and a further extended phase (additional 45 business days) for complex cases. COFECE may approve, conditionally approve, or block proposed transactions.
Enforcement and Sanctions
COFECE may impose fines of up to 10% of a firm’s annual revenues for competition law violations, and up to 180,000 times the minimum wage for individuals. The commission conducts dawn raids, issues subpoenas, and operates a leniency program that grants immunity to the first cartel participant to confess and cooperate. Criminal sanctions apply to persons who enter into cartel agreements, with penalties including imprisonment.
Conclusion
Mexican antitrust law has evolved into a robust enforcement regime, particularly following the 2014 LFCE reforms and the constitutional recognition of COFECE as an autonomous body. The combination of administrative and criminal enforcement, a mature leniency program, and rigorous merger control makes Mexico one of the leading competition law jurisdictions in Latin America.