No. 02/2021
APRIL
COFECE publishes updated Merger Notification Guidelines.
On April 8, the Official Gazette of the Federation ("DOF") published an update to the Merger Notification Guidelines in order to provide greater certainty to economic agents regarding the analysis performed by the Federal Antitrust Commission ("COFECE" or "Commission") on mergers that are notified to it. Some of the new elements included in this update are: the treatment of collaboration agreements ("Mergers" or "Merger Agreement") ("Acuerdo de colaboración" or "Acuerdo de colaboración").Joint Ventures); those required to notify a concentration involving multiple purchasers; issues relating to companies in a precarious economic situation; and other considerations regarding the calculation of thresholds. Read more.
COFECE issues recommendation to the Legislature on the reform of the Hydrocarbons Law.
On April 12, COFECE sent to the Congress of the Union its opinion regarding the proposed reform to the Hydrocarbons Law, through which it states that, if this initiative is approved in the proposed terms, it will generate legal uncertainty for the economic agents participating in the hydrocarbons, petroleum and petrochemicals value chain, in addition to creating the ideal conditions for restricting the supply of products and services in this market. Among the potential negative effects generated to the value chains are: the disincentive to the entry of new competitors and the reduction of supply by modifying the permit regime; the reduction of competitors and supply by introducing as a requirement the prior verification of the required storage capacity; and the modification from affirmative to fictitious negative in the resolution of requests for the assignment of permits. Read more.
COFECE files constitutional controversy against the Decree that reforms several provisions of the Electricity Industry Law.
On April 22, 2009, COFECE filed a constitutional controversy against the Decree that reforms several provisions of the Electricity Industry Law (the "Decree") before the Supreme Court of Justice of Mexico, considering that the measures established in the Decree are contrary to the provisions of the Constitution and as a result of such measures, the conditions of competition necessary for a correct dynamics in the electricity market would be eliminated. Through this controversy, COFECE argued: (i) that the elimination of the criterion of economic dispatch of power plants unduly grants advantages to the Federal Electricity Commission ("CFE") and annuls the ability to compete of other economic agents in the generation link; (ii) violates the rule of open and non-discriminatory access to the distribution and transmission networks; (iii) allows the CFE to acquire energy through non-competitive methods; among others. Read more.
COFECE summonsed an economic agent for its probable responsibility for relative monopolistic practices in the access market for the provision of federal passenger transportation services at the Mexico City airport.
On April 27 COFECE summoned an economic agent to the proceeding in the form of a trial for allegedly engaging in a relative monopolistic practice known as refusal to deal, in the access market for the provision of federal passenger transportation services at the Mexico City airport and related services. Read more.
MAY
Instituto Federal de Telecomunicaciones denies extension of time for Disney to divest Fox Sports in Mexico.
On May 6, the Plenary of the Federal Telecommunications Institute ("IFT") denied the request made by The Walt Disney Company and First Century Fox, Inc. to extend the suspension period of the divestiture period for the sale of the Fox Sports Mexico business. The IFT's denial is justified by the fact that the circumstances due to the COVID-19 pandemic have evolved, the reactivation of economic activities and sporting events is ongoing, and therefore the suspension period ended on May 7. Read more.
COFECE initiates investigation for possible relative monopolistic practices in the generation, wholesale commercialization and supply of electricity.
On May 6, the notice of the initiation of an investigation derived from a complaint of possible monopolistic practices in the market for the generation, wholesale commercialization and supply of electric energy and associated products, as well as services and activities related to this market in Mexican territory was published in the DOF. The file under which this investigation is being carried out is an independent process from the constitutional controversy filed by COFECE against the Decree that reforms several provisions of the Electricity Industry Law. Read more.
COFECE summons economic agents for possible collusion in the signing of professional soccer players.
On May 6, the COFECE summoned several economic agents after finding sufficient evidence of possible collusion in the market for the signing of professional soccer players in Mexican territory. This investigation is particularly important because it sets a precedent for those anticompetitive conducts that generate negative effects on the mobility of workers and the determination of salaries in the aforementioned market. Thus, the procedure followed in the form of a trial began, through which the economic agents involved will be able to defend themselves against the accusations made by the COFECE Investigating Authority. Read more.
Domo and Gape denounce COFECE for favoring Grupo Modelo and Heineken.
On May 13, the companies Distribuidora Domo and Distribuidora Gape de Tamaulipas filed a complaint before the Attorney General's Office against the COFECE for alleged omissions, deficiencies and possible acts of corruption related to the decision of the Plenary of the COFECE to close the investigation file for relative monopolistic practices opened in 2010 related to discounts and incentives to customers in exchange for exclusivity in distribution, marketing and sale of beer in the country. Read more.
Federal judges grant suspension against the reform to the Hydrocarbons Law.
On May 17, the judges specialized in Economic Competition, Broadcasting and Telecommunications, granted the suspension with general effects with respect to article 57 and the fourth and sixth transitory articles of the Decree of Reform of the Hydrocarbons Law. Such suspensions were granted considering that the aforementioned articles could generate negative effects on competition and free concurrence in the hydrocarbons, oil and petrochemicals markets. Read more.
COFECE publishes document "Transition to Competitive Energy Markets: Clean Energy Certificates in the Mexican Electricity Industry".
On May 18, COFECE published the final version of the document ".Transition to Competitive Energy Markets: Clean Energy Certificates in the Mexican Electricity Industry"This document is the result of the comments generated in the consultation published last January. In this document, COFECE estimates that, despite having committed to a generation of 35% of clean energy by 2024 in the Paris Agreement, Mexico will only reach 29.8% of clean energy use. Read more.
Open consultation to the public on the preliminary document on the public freight rail transport service market.
On May 24, COFECE issued for public consultation the preliminary version of the document ".Study of competition in the public rail freight transportation service (Study)", in order to receive comments to enrich it, which expired on June 26th. The Study mainly highlights issues such as the effects derived from the privatization of the railroad sector; problems derived from the characteristics of this sector such as asymmetries in the access to the market; the fragmentation of the railroad transportation network; the lack of clear criteria to extend certain concessions; the absence of regulation for the access to the tracks in which the exclusivity of concessionaires expires and the lack of information to exercise an efficient regulatory task on the part of the Railroad Transportation Regulatory Agency. Read more.
COFECE initiates an investigation of effective competition conditions in the liquefied petroleum gas distribution market nationwide.
On May 31, the Investigating Authority of the COFECE initiated the special procedure to determine the existence of effective competition conditions in the market for the non-pipeline distribution of liquefied petroleum gas at a national level. This investigation initiated ex officio by the Commission could trigger a process of regulation of considerations, prices and tariffs in the liquefied petroleum gas distribution market by the Energy Regulatory Commission. Read more.
JUNE
COFECE sanctions Praxair for failing to comply with commitments in the industrial oxygen, nitrogen and argon markets.
On June 1, the Commission sanctioned Praxair Mexico for failing to comply with the commitments it had assumed in order to restore competitive conditions in the markets for oxygen, nitrogen and industrial liquid argon distributed and marketed in bulk. The total fine amounts to approximately 237 million 876 thousand pesos. Said commitments were acquired by Praxair when requesting the anticipated closing of the proceeding followed in the form of a trial to which it was subject from 2014 to 2018. Among the unfulfilled commitments are: (i) the omission to modify contracts with customers to include the commitments acquired; (ii) the submission of information related to lists of contracts and communications and (iii) the omission to include in stipulations in favor of third parties the conditions of automatic renewal without modification to the initial mandatory term of contracts. Read more.
New Advertising Law provides new powers for COFECE.
On June 3, the Law for Transparency, Prevention and Combating Unfair Practices in Advertising Contracting was published in the DOF, which has as its main objective the promotion of transparency in the advertising market. This new law contains specific obligations for agencies, media and other economic agents participating in the advertising market. According to the law, any complaint derived from these provisions must be substantiated and processed by the COFECE. Read more.
IFT approves the sale of Fox Sports Mexico to Grupo Lauman.
On June 8, the IFT authorized the purchase and sale of shares and notified concentration through which The Walt Disney Company and Twenty-First Century Fox transferred the Fox Sports business in Mexico to Grupo Lauman. The sale of Fox Sports derives from the conditions imposed by the IFT to Disney and Twenty-First Century Fox on March 11, 2019 in order to correct the risks in the market for the provision and licensing of audiovisual content, as well as from the refusal to extend the term requested to the IFT by Disney last May 6. Read more.
COFECE is the competent authority to analyze the markets for online search services, social networks and cloud computing.
On June 18, the First Collegiate Court in Administrative Matters specialized in Economic Competition, Broadcasting and Telecommunications recognized the Commission as the competent authority to hear the markets for online search services, social networks and cloud computing services. This determination derives from the request made in January by the Commission to the Judicial Power of the Federation ("PJF") to determine the competent authority to hear the markets that are part of the investigation initiated by the IFT in October 2020. Likewise, the PJF determined that the IFT is the competent authority to hear the mobile operating systems market. Read more.
COFECE is grateful for the work of Sergio López, head of the Investigating Authority.
On June 30, the Plenary of the Commission thanked and recognized the efforts and work of Sergio Lopez Rodriguez who served as the head of the Investigating Authority ("IA") for the past 4 years. Mr. Lopez previously held various positions at the Commission since joining in 2001. The IA of COFECE is the unit responsible for handling investigations of monopolistic practices and unlawful concentrations, as well as special procedures to determine essential inputs, barriers to competition or lack of market conditions. Bertha Leticia Vega Vázquez, who until then was the General Director of the Coordination Office of the same unit, was appointed as Interim Head of the IA. Read more.
Open public consultation on the preliminary draft of amendments to the Regulatory Provisions on the use of electronic media before COFECE.
On June 30 COFECE issued for public consultation the Preliminary Draft of amendments to the Regulatory Provisions on the use of electronic media before COFECE. The main purpose of the Preliminary Draft is to strengthen the current regulations regarding the use of electronic media before COFECE and takes into account the institutional experience acquired. The consultation will be open until July 19. Read more.
The lawyers of the Antitrust area of the Firm are at your disposal to answer any questions regarding the content of this document.
A T T E N T A M E N T,
Amilcar Peredo
Rodolfo Barreda
Fernanda Garza
León Jiménez
Carmina Paredes
