An initiative to reform the Federal Economic Competition Law is published. The President of the Republic submitted to the Congress of the Union an initiative to reform the Federal Economic Competition Law (LFCE) which will be analyzed in the coming days and introduces significant changes in the institutional structure and administrative procedures.
An initiative to reform the Federal Economic Competition Law is published. The President of the Republic submitted to the Congress of the Union an initiative to reform the Federal Economic Competition Law (LFCE) which will be analyzed in the coming days and introduces significant changes in the institutional structure and administrative procedures.
It is important to highlight that this initiative is independent of the proposal presented in February of this year by Deputy Alfonso Ramírez Cuéllar, which seeks to establish a new law in the field of economic competition.
In the institutional sphere, this new reform establishes that the Federal Economic Competition Commission (COFECE) will cease to be an autonomous constitutional body to become part of the Executive Branch under the name of the National Antitrust Commission (CNA). Likewise, the number of commissioners that will form the new Plenary is reduced from seven to five, which must be integrated no later than June 30, 2025.
It is expected that this loss of constitutional autonomy will not alter the effective application of the competition regime, as it would not be the first time that the Mexican competition authority operates under the dependency of the Executive Branch. However, there is a risk that decisions may be made with a more political than technical approach.
It is important to note that the powers in economic competition currently attributed to the Federal Telecommunications Institute (IFT) will be transferred to the CNA, thus establishing a single economic competition authority in the country.
In terms of concentrations, the thresholds for mandatory notification are lowered, with the aim of expanding the number of operations subject to scrutiny by the CNA.
In terms of sanctions, the initiative contemplates a significant tightening of the fine regime (which can be imposed as coercive measures or as a sanction) through the considerable increase of applicable amounts and the introduction of new sanctionable assumptions. Simultaneously, it seeks to promote the filing of criminal complaints and collective actions.
In procedural matters, the reform introduces important changes that include temporary restrictions for submitting requests to the immunity program in cases of collusion and offering commitments to terminate procedures related to relative monopolistic practices early. As a notable novelty, a certification system for LFCE compliance programs will be implemented, which may be considered as mitigating factors. Additionally, the deadlines for various procedures are reduced, especially for the resolution of concentrations, which will go from 100 to 50 days, including the extension.
The reform will come into force the day after its publication in the Official Gazette of the Federation. During the transition period, that is, while the new Plenary of the CNA is integrated, COFECE and IFT will maintain their functions according to the previous legal framework.
Ongoing procedures will continue their processing under the regulations in force at the time of their initiation, with the exception that deadlines in investigation procedures related to monopolistic practices, illicit concentrations, competition barriers, essential inputs, and market conditions will be temporarily suspended until the new Plenary of the CNA is integrated. The procedures for analyzing concentrations will not be suspended.
