Access Alert: Mexico Unveils Draft Competition Bill

Access Alert: Mexico Unveils Draft Competition Bill

On 18 February, the Deputy Majority Leader in the Chamber of Deputies, Alfonso Ramírez Cuellar (from the Morena party), introduced a draft bill to reform Mexico’s anti-monopoly and economic competition framework. The last reform of these laws took place over a decade ago.

Totalling 165 articles, the initiative aims to strengthen the regulation of strategic markets, including energy, telecommunications, health, transportation, and food. One of the bill’s distinctive features is the increase to penalties and fines.

Creating the New National Agency for Competition and Economic Wellbeing

The proposal centres on creating a unified competition authority to regulate all economic sectors. This new decentralised body will have technical and operational independence, integrating the functions of the soon-to-be-defunct Federal Economic Competition Commission (Cofece) and the Federal Telecommunications Institute (IFT). The organisational simplification reform, approved in December 2024, eliminated these autonomous bodies and proposed establishing a new economic competition authority.

Most of the draft bill’s legal language is taken from the existing law. Yet, some key changes and elements have an impact on the tech sector, including:

  • Organisational structure: Creates a completely new competition authority and reduces the number of commissioners from seven to five for a seven year term. Commissioners will be selected through a public call issued by the Executive Power and the relevant Ministry, assessed by a Technical Evaluation Committee of multi-stakeholder experts. The top five profiles will be submitted to the Executive Branch, who will select and appoint the Commissioner.
  • Investigations: Proposes measures to improve transparency and expedite decision-making processes, such as reducing investigation times into monopolistic practices or illegal concentrations. Currently, these can take up to 600 days, and the reform seeks to reduce them to 480 days, with extensions limited to 90 instead of 120 days.
  • Fines and penalties: Increases penalties for those hindering free competition, with fines up to 50,000 times the Unit of Measurement and Updating (UMA) for non-compliance and up to 250,000 times the UMA for obstructing investigations or providing false information. Fines can reach 20% of the offender’s income for absolute monopolistic practices and illegal concentrations. Additionally, administrative arrests of up to 36 hours are possible for those obstructing verification.
  • Telecommunications sector: The proposal establishes that the new authority will take control of competition in the Telecommunications and Broadcasting sectors. This includes determining and imposing asymmetric regulations on players in such sectors to promote free competition and remove competition barriers.

Amid controversy over the dissolution of autonomous bodies and potential United States-Mexico-Canada Agreement (USMCA) violations, the proposal emphasises that the bill aligns with USMCA commitments. USMCA Chapter 21 mandates equitable processes and adherence to legal procedures, while Chapter 18 ensures non-discrimination in the telecommunications sector.

What’s Next?

The initiative proposes a 60-day period from its enactment for the new law to come into effect. This includes establishing the new authority and appointing the new Commissioners, contrasting with the 180-day period stipulated in the organisational simplification constitutional reform.

However, the proposal will likely be refurbished into the Executive Power’s own draft bill expected to be introduced in the next few weeks, as already mentioned by the Legislator. The government’s new bill will seek to implement the constitutional reform approved in December 2024.

To learn how your organisation can navigate the implications of Mexico’s new competition framework, please contact Rodrigo Serrallonga at [email protected].

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