Introduction to the New Commission
The Mexican Chamber of Deputies has approved the creation of a new National Antimonopoly Commission (CNA), which will oversee market regulation following the dissolution of the Federal Competition Economic Commission (Cofece).
Background and Relevance
This development stems from an initiative by President Claudia Sheinbaum, aiming to align with the provisions of the United States-Mexico-Canada Agreement (T-MEC). The T-MEC mandates that Mexico must enforce economic competition policies and have responsible authorities for their implementation, a responsibility left vacant after the Cofece’s elimination.
CNA’s Mandate and Structure
The CNA will be a decentralized public body under the Ministry of Economy, with its own legal personality and assets, as well as operational autonomy. Comprising five commissioners, including a president, the CNA will ensure free competition and economic activity across all markets in Mexico.
The CNA will prevent, investigate, and combat monopolies, restrictive practices, mergers, and other market inefficiencies. It will also regulate national and regional frequency concentrations, cross-ownership of media outlets serving the same market, and control preponderant economic agents in broadcasting and telecommunications sectors.
Moreover, the CNA will determine conditions for effective competition in telecommunications and broadcasting, impose, modify, or extinguish asymmetric obligations on preponderant economic agents, and regulate the programming of restricted television services to ensure access to diverse and timely information.
Key Changes in the Reform
- Elimination of a paragraph in Article 6 that exempted state-owned enterprises from complying with the law in strategic areas.
- Reduction of maximum fines for absolute and relative monopolistic practices, though they remain higher than current penalties.
- Lowering of infringer income confiscation rates: from 20% to 15% for absolute monopolistic practices (current limit is 10%) and from 15% to 10% for relative monopolistic practices (current limit is 8%).
- Granting the CNA authority to determine preponderant economic agents in telecommunications and broadcasting markets, along with the implementation of asymmetric regulations.
Impact on Telecommunications and Broadcasting Sectors
The new CNA will significantly influence the telecommunications and broadcasting sectors by regulating frequency concentrations, cross-ownership of media outlets, and preponderant economic agents. This regulation aims to maintain fair competition and prevent market inefficiencies.
Furthermore, the CNA will oversee programming of restricted television services, ensuring diverse and timely information access through mandatory inclusion of news or public interest channels. At least three channels must feature predominantly national independent programmer content, majority-funded by Mexican sources.
Key Questions and Answers
- What is the purpose of the new National Antimonopoly Commission (CNA)? The CNA aims to ensure free competition and economic activity across all markets in Mexico, prevent monopolies, restrictive practices, and maintain efficient market functioning.
- What sectors will the CNA regulate? The CNA will oversee telecommunications, broadcasting, and related sectors, focusing on frequency concentrations, cross-ownership of media outlets, and preponderant economic agents.
- How will the CNA impact telecommunications and broadcasting sectors? The CNA will regulate these sectors to maintain fair competition, prevent market inefficiencies, and ensure diverse and timely information access through programming regulations.
- What are the key changes introduced by the reform? The reform eliminates state-owned enterprise exemptions, reduces maximum fines for monopolistic practices, lowers infringer income confiscation rates, and grants the CNA authority to determine preponderant economic agents and implement asymmetric regulations.
