By Ivan Carballo
A new Federal Competition Act has been approved by the Mexican Congress on April 30. The now extinguished Federal Competition Commision was replaced by the Federal Economic Competition Commission (“COFECE”), an agency vested with constitutional autonomy, which has jurisdiction over competition-related matters. In regards to Anticompetitive behaviour, the Act mantains the fundamental principles of anticompetitive behaviour, differentating between absolute and relative practices, introducing the idea that the latter are only illegal as long as a so-called ‘market power’ exists.
Moreover, the Act keeps the fundamental concepts in connection to relative monopolistic practices, including the possibilty to determine joint dominance. However, the Act provides that a conduct may be deemed illegal even if the parties involved -at least one of them- enjoys market power in a related market and not the market in which such conduct has the anticompetitive effect, as well as it introduces other two anticompetitive practices, namely, the restriction of, or discrimination in, the access to an essential facility and predatory costs in the offer of an essential facility to competitors in the market.
The Act grants COFECE the power to invistigate markets to determine the existance of essential facilities or barriers to competition. In case the report concludes that an essential facility or barrier to competition does exist, a new stage will be open where the affected players may provide evidence to COFECE. should COFECE conclude that a given facility is either controlled or held by a single player or a limited number of, not replicable and essential for the provision of goods and services in one or more markets, COFECE may determine rules of access to such essential facility, price or rate regulation applicable, technical and quality conditions under which it must be provided.
Regarding to public procurement, a provision introduced states that even if contracts are to be awarded directy, COFECE shall be in charge of clearing the award of a contract, concession or permit to a private party, so contractors must obtain clearance from such entity before the corresponding contract/concession/permit is awarded.
This is just a brief extract of the content of the new Act, should you require further information on the impact of this new Act, please do not hesitate to contact us at any time.
