Introduction
Predicting the future is challenging, but I will attempt to outline how amendments to Mexico’s Federal Economic Competition Law are expected to increase the workload for officials in the new antimonopoly authority (CNA).
Key Amendments and Their Implications
1. More Concentration Reviews
While notification thresholds have only been reduced by approximately 11%, the number of concentrations to be reviewed is likely to grow at a higher percentage. This is because there will probably be more medium-sized transactions than large ones. It’s important to note that smaller mergers do not necessarily pose fewer competition risks. Even if the total amount sold in a specific market is not large, concentrations and monopolization phenomena can still occur among medium-sized enterprises.
2. Shorter Investigation Timeframes for Monopolistic Practices
The Investigative Authority must now conclude its investigations into monopolistic practices in less time. Although the volume of work should remain similar or comparable, as no greater number of parallel investigations is required, the reduction in investigation times will likely lead to an increase in cases and economic agents involved, at least in the medium term. Moreover, two sectors previously uninvestigable by COFECOM are now under the purview of CNA: telecommunications and radio broadcasting.
There are differing opinions regarding this time reduction. Some celebrate the decrease in legal deadlines, as they often resulted in lengthy investigations. Others argue that the authority will face even greater difficulties in gathering evidence, which was already a complex task for presenting solid cases.
As investigations unfold, they will shed light on the analysis of new concepts derived from law amendments. For instance, these include: i) information exchange among competitors leading to certain collusions, ii) the consideration of potential competitors in collusions, and iii) improper limitations on a company’s ability to compete in monopolistic practices.
3. Greater Focus on Compliance Program Certification
The new area, called the General Directorate of Compliance and Enforcement, part of the Technical Secretariat, will oversee the certification of compliance programs. If these programs are certified every three years, economic agents can use them as mitigating factors when the authority imposes a sanction. These programs are expected to be particularly valuable for companies with significant market presence in highly concentrated sectors or those frequently scrutinized by the authority for various reasons.
4. New Directorate for Special Proceedings
Another new area within the Technical Secretariat of the National Antimonopoly Commission is the General Directorate of Special Proceedings. This directorate will handle post-investigation stages in cases involving essential inputs and competition barriers, as well as telecommunications and radio broadcasting proceedings—new responsibilities for former COFECOM personnel now working at CNA.
Workforce and Resources
These tasks will be carried out by the same or similar personnel as before, including those from the Federal Telecommunications Institute who have joined CNA. The workload will also depend on the number of notified concentrations and a budget contingent upon the number of concentration notifications. The challenge seems formidable.
Key Questions and Answers
- Q: How will the amendments affect the CNA’s workload? A: The amendments are expected to increase the CNA’s workload through more concentration reviews, shorter investigation timeframes for monopolistic practices, a greater focus on compliance program certification, and new responsibilities in special proceedings.
- Q: What are the implications of reduced investigation timeframes for monopolistic practices? A: While some celebrate the decrease in legal deadlines, others express concern about the authority’s ability to gather evidence for solid cases. The reduction in investigation times is expected to lead to more cases and economic agents involved.
- Q: What role will compliance programs play in the CNA’s work? A: Compliance programs, if certified every three years, can serve as mitigating factors for economic agents when the CNA imposes sanctions. These programs are expected to be particularly valuable for companies in highly concentrated sectors or those frequently scrutinized by the authority.
- Q: What new responsibilities has the CNA taken on? A: The CNA now oversees special proceedings related to essential inputs, competition barriers, telecommunications, and radio broadcasting—areas previously managed by COFECOM.
