Antitrust and economic competition law initiative
I. BILL
Deputy Alfonso Ramírez Cuéllar introduced the initiative for the Federal Antitrust and Economic Competition Law (“LFACE”), which was subsequently published in the Parliamentary Gazette on February 18, 2025. If enacted, this legislation would repeal the existing Federal Economic Competition Law (“LFCE”) and establish the National Agency for Competition and Economic Welfare (the "Agency") as the new competition authority, replacing the Federal Economic Competition Commission (“Cofece”).
In broad terms, the LFACE preserves the LFCE's fundamental principles, which have been consolidated through over thirty years of administrative and judicial practice.
A significant aspect of the proposed law is the creation of a Plenum comprising five commissioners and an Antitrust Prosecutor. These bodies would assume the same responsibilities currently held by Cofece's Plenum and the Investigative Authority. Furthermore, the organizational and occupational structure of Cofece would serve as the foundation for the new Agency’s operations.
Regarding telecommunications and broadcasting, the Agency would also assume the regulatory functions previously carried out by the Federal Telecommunications Institute, to regulate the preponderant economic agents in these sectors.
Another notable provision is the continuity of regulations concerning pre-merger notification, the prohibition of absolute and relative monopolistic practices, the regulation of essential inputs, and barriers to competition. These regulations remain largely unchanged from those established under the LFCE.
A key innovation of the LFACE is the introduction of the concept of "neutrality to competition," which aims to prevent economic agents with public participation from distorting market competition.
While the initiative adheres to the foundational principles of the LFCE, it incorporates structural and operational modifications designed to enhance economic competition within the country.
II. MONOPOLISTIC PRACTICES
Absolute monopolistic practices, including price-fixing, restrictions on supply or purchase, market division, and bid-rigging, will also be named "collusive agreements". The initiative explicitly states that such agreements may occur between both current and potential competitors. Under the existing LFCE framework, potential competitors were only considered in cases of the market division; however, LFACE expands this scope to include all forms of collusive agreements.
Relative monopolistic practices will also be called abuse of dominant position and remain a focal point of the legislation. Additionally, LFACE introduces a new form of anti-competitive conduct: the direct or indirect imposition of purchase or sale prices or other unfair transaction conditions.
III. CONCENTRATIONS
In matters of concentration, the LFACE sets lower monetary thresholds for pre-merger notification compared to the LFCE. Moreover, any collaboration agreement exceeding certain monetary thresholds must also be notified to the Agency in advance.
The new law further stipulates that non-compete clauses in pre-merger notifications must be justified. This requirement extends not only to the economic agents involved but also when employees and professional service providers. Such clauses must be restricted in terms of duration, scope, and the subjects to whom they apply.
Additionally, the initiative details procedures for addressing concentrations that should have been legally notified, following the guidelines outlined in the Regulatory Provisions of the LFCE.
The period for investigating illicit concentrations that do not exceed the monetary thresholds for prior notification is extended to three years.
IV. PROCEDURES
The LFACE establishes shorter investigation periods, enhancing procedural efficiency. A significant procedural change is the introduction of a "citizen complaint," which does not need to meet the formal requirements applicable to traditional complaints.
In on-site inspections, the person who opposes the entry of the Agency's officials or who obstructs or impedes the inspection, may be subject to immediate administrative arrest for up to 36 hours.
A new mechanism is also introduced to protect information derived from legal counsel provided to economic agents. This procedural safeguard aims to ensure the confidentiality of such information, preventing its inclusion in the Agency’s files.
Furthermore, the new legislation regulates the procedures related to incidental matters and official communications required for investigative proceedings, in alignment with the provisions of the LFCE’s Regulatory Provisions.
V. SANCTIONS
The penalties established under the LFACE are notably more severe than those currently stipulated by the LFCE. Among other sanctions, we point out the following:
For absolute monopolistic practices or collusive agreements, the fine will amount to 20% of the total income of the economic interest group to which the offending economic agent belongs.
For relative monopolistic practices, abuse of dominant position, or unlawful concentrations, the penalty will be 10% of the total income of the relevant economic interest group to which the offending economic agent belongs.
In contrast, the LFCE currently imposes penalties of 10% and 8%, respectively, based on the income of the specific economic agent engaged in anti-competitive conduct.
VI. ONGOING PROCEEDINGS
The transitory provisions of the LFACE specify that ongoing proceedings initiated before the entry into force of the law will continue to be governed by the legal antitrust framework in effect at the time of their commencement.
