THE FEDERAL ECONOMIC COMPETITION LAW’S
REGULATORY PROVISIONS GRANT LEGAL CERTAINTY TO
FIRMS

On November 10th COFECE published the Federal Economic Competition Law’s
Regulatory Provisions necessary for the fulfillment of its duties in Mexico’s
Federal Official Gazette.

These provisions develop, complement and detail the Law’s scope of
application.
Mexico City on November 10th 2014. – The Federal Economic Competition Law’s (FECL)
Regulatory Provisions grant firms legal certainty regarding the Federal Economic
Competition Commission’s (COFECE) performance.
The provisions, which were published on November 10th in Mexico’s Federal Official
Gazette, develop, complement and detail the FECL’s scope of application, and the
procedures which guide COFECE’s enforcement thereof.
Among these regulatory provisions enacted within the FECL’s framework are the
following:

The power to initiate investigations based on indications of Absolute
Monopolistic Practices and, therefore, an objective cause.
These indications implement the objective cause standard provided by article
72 of the FECL and gather situations whereby it is worthy to investigate the
existence of anticompetitive practices such as:
o Invitations and/or recommendations to coordinate among competitors,
o A substantial price difference by two or more competitors in
comparison to international prices,
o Instructions and/or recommendations adopted by business
organizations for coordination, and
o The establishment of the same maximum and minimum prices by
competitors.

The power to undertake enforcement actions to: 1) eliminate barriers to
competition and market access, and 2) determine the existence and
regulation to essential inputs.
During investigations undertaken to determine essential inputs and barriers to
competition, firms involved may propose appropriate and economically
feasible measures to address competition issues identified by COFECE. In
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all cases COFECE shall verify that the proposed measures will generate
efficiency gains in the corresponding markets.
Through this analysis COFECE can draw from prevalent judicial criteria and
international best practices regarding consideration and examination of
measures imposed by authorities.

A specific procedure implementing article 94 of the FECL which COFECE
must abide by when exerting its power to order divestiture of assets or
structural divestment (only when other corrective actions are insufficient
for solving the competition problem).
These provisions also include firms’ procedural rights under these
enforcement measures and the possibility for proposing corrective actions
prior to the corresponding resolution which must be considered by COFECE’s
Board of Commissioners.

Strict evidentiary standards which implement section X of article 127 of
the FECL regarding the penalization of executives who partake in
anticompetitive practices on behalf of companies as well as the imposition
of a fine equivalent to approximately 1 million US dollars.
The text was approved by COFECE’s Board of Commissioners and was previously
submitted to a public consultation process through which observations were brought
forth by business associations, national and international professional organizations,
academic institutions, law firms and private citizens, jointly contributing to enriching
approximately 50% of the articles. This transparency exercise implied an important
degree of legal scrutiny on behalf of Mexican society which examined important aspects
of Mexican competition legal framework and reflect COFECE’s unwavering commitment
to legality.
Furthermore, the regulatory provisions have specific sections regarding opinions or
resolutions for the awarding of licenses, concessions, permits and similar acts, as well as
fine reductions, incidental pleas, formal opinion requests, formal opinion issuing,
opinions concerning competition advocacy, drafting of market studies and resolutions
concerning injunctive relief.
By ensuring legal certainty and procedural implementation of the FECL, these
procedures will allow firms to comprehensively understand their rights, “the how, when
and why”.
The Regulatory Provisions are incorporated into the new legal framework pursuant to the
2013 Constitutional Reform and the FECL which entered into force on July 6th 2014.
The Federal Economic Competition Commission is entrusted with safeguarding competition and free market access.
Through these, it contributes to consumer welfare and the efficient working functioning of the markets. Through its work
it seeks better conditions for consumers, greater output and better services and a “level playing field” for companies.
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