On March 27, 2020, the Federal Economic Competition Commission, Mexico’s antitrust regulatory agency, (“COFECE”, for its Spanish initials) issued a press release in relation to its stance in relation to the health emergency in Mexico.
Due to the ongoing spread of COVID-19 and the official acknowledgment that Phase Two has begun, COFECE has announced that it will implement the following measures aimed to assist supply chain continuity, and to prevent artificial supply restrictions and price gouging with the objective of mitigating inconveniences to companies, consumers and the market.
- It will not prosecute collaboration agreements among firms which, due to the health emergency, are necessary to maintain or increase supply, meet demand, protect supply chains, and avoid product scarcity or hoarding, with the understanding that such agreements are not intended to displace competitors.
- Notwithstanding that high profit margins or unilateral price increases are not in violation of antitrust law, COFECE will monitor the behavior of sensitive markets which display indiscriminate price increases to assess and, if appropriate, rule out the existence of barriers or arrangements between competitors which may affect said markets, in which cases an investigation will be initiated.
- It will prioritize review of merger filings intended to create synergies and increase production of items essential to deal with the ongoing health crisis.
Finally, COFECE warned that, given the current situation, any agreements between competitors which intend to or cause price manipulation, restrictions on supply of goods or services, market allocation, bid-rigging, and other similar practices are particularly serious and shall be prosecuted to the fullest extent of the law.
The Competition and Antitrust Law practice of the firm will continue to monitor and inform you of any new developments in this subject.
Mexico City, March 30, 2020.