Mexico: COFECE investigates possible monopolistic practices between competitors in the industrial gases market

In brief

On 5 January 2022, the Investigating Authority of the Federal Economic Competition Commission (COFECE) published notice of an investigation, file IO-001-2021, for the alleged anti-competitive conduct of horizontal monopolistic practices in the market for integration, installation, maintenance and commercialization of equipment, accessories and spare parts for the use of industrial gases in Mexico.

This market is related to the infrastructure necessary to use industrial gases, which are used in different sectors, such as the energy, health, food, and chemical industries, as well as the construction and production of electronics, among others.

If the existence of a horizontal monopolistic practice is proven, economic agents could be fined up to 10% of their annual revenue. Those who have participated or contributed to this illegal conduct could be criminally prosecuted, and may be subject to 10 years in prison.


Contents

Recommended actions

  • In this type of proceedings, it is normal for the antitrust authority to request information and documents from the companies offering products and services related to the market under investigation. In the event the antitrust authority sends a request for information, it is essential to respond to such request; otherwise, the defaulting company will be subject to a fine.
  • The Mexican antitrust authority is empowered to conduct dawn raids (on-site unannounced visits at the company's offices, through which they may request information and/or photocopy documents related to the market under investigation). In these cases, it is recommended to contact the company's legal counsel and seek immediate advice from an antitrust and competition lawyer. Obstruction or failure to comply with a dawn raid may result in fines and/or criminal penalties.
  • In some cases, the antitrust authority considers it pertinent to summon individuals who are presumed to have knowledge of the market under investigation, e.g., technical personnel or managers of companies that offer products and services related to the market under investigation. In case an employee is summoned by the COFECE, it is recommended to consult with an attorney who specializes in competition matters.

In more detail

  • The investigation should not be understood as a judgement, but as an action by the authority to verify compliance with the Federal Mexican Antitrust Law.
  • Horizontal monopolistic practices are anti-competitive agreements, contracts or arrangements between competing economic agents, whose object or effect is the manipulation of prices, restriction or limitation of supply or demand, division or segmentation of markets, agreement or coordination of bids in auctions, as well as the exchange of information between competitors to carry out any of the aforementioned conducts.
  • This antitrust investigation was initiated on 25 June 2021, and it could take up to 120 business days, with the possibility of being extended four times for an additional period of 120 business days each.

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