In detail
Key changes include stronger investigative powers, lower merger control thresholds, higher fines for violations of the MCL, new technological tools, criminal sanctions, and international cooperation mechanisms.
New reforms to be implemented
Creation of the NAC. COFECE will be replaced by the NAC, a decentralized public agency under the Ministry of Economy, with its own legal character and assets. NAC will have a Plenum composed of five commissioners, who will be appointed in stages by the Federal Executive and ratified by the Senate. The Commission will have technical and operational independence in its decision-making process. NAC will take office as of the first business day following the date on which the NAC's Plenum is integrated.
Suspended terms. As of the effective date of the New Amendments, the terms of all investigative processes currently being conducted by COFECE's Investigating Authority have been suspended until the NAC takes office.
Strengthening of powers and procedures. NAC will have enhanced investigative tools, such as dawn raids surveys, and international cooperation. The Investigative Authority´s capabilities are strengthened.
Extension of the statute of limitations for investigating concentrations. Article 65 of the MCL has been amended to extend the statute of limitations for investigating non-reportable transactions from one year to three years as of the date of closing.
Class actions Antitrust. Class actions may be brought once the administrative decision by the NAC is final.
Technological and transparency reforms. Electronic proceedings are regulated in further detail, stenographic versions of the meetings of NAC Plenum must be published.
Reforms in telecommunications and broadcasting. NAC will issue opinions on asymmetric regulation and the existence of preponderance on the telecoms markets.
Certification of Antitrust Compliance Programs. The NAC will certify companies' antitrust compliance programs. This certification will be valid for three years. When imposing penalties, the NAC may consider the fact that the company has a certified compliance program as a mitigating factor.
The leniency benefits for cartel practices are restricted: (i) minimum fine only if it is the first undertaking applies for leniency before the corresponding investigation begins, and (ii) reduction of 50, 30, or 20 percent of the fine if requested after the investigation has begun (provided it is done before NAC extends for the third time the initial investigation period).
Reduction of the merger control thresholds
Lower Merger Control Thresholds. The threshold amounts established in sections I, II, and III of Article 86 of the MCL are lowered, resulting in more transactions requiring prior authorization, in accordance with the following:
| Threshold |
Approved Bill |
| First |
If the transaction exceeds the amount of approx. USD 95 million in Mexico. |
| Second |
If the transaction implies an accumulation of 30% or more of the assets or shares of a company, whose total assets or sales in Mexico total more than approx. USD 95 million. |
Third:
First test |
If the transaction implies an accumulation of assets or capital stock in Mexico in excess of approx. USD 44 million, AND |
Third:
Second test |
Such transaction is carried out between two or more companies whose corporate groups own assets (located in Mexico) or have annual volume of sales in Mexico, in excess of approx. USD 238 million. |
Additionally, the deadlines within the merger control analysis procedures are reduced, as the statutory period to analyze and rule on a reported transaction has been lowered from 60 to 30 working days (as of the date of filing, or as of the date on which the applicants fully address any request for information issued by the NAC).
Increase in fine amounts
| Type of violation |
Amount of the fine |
| Cartel practices |
Fine up to 15% of the responsible entity's/individual's annual income in Mexico (plus civil and criminal liability).
Please note that in bid rigging cases NAC will also be able to disqualify the responsible entity's/individual's from participating in public bid processes for up to five years.
|
| Abuse of dominance practices |
Fine up to 10% of the responsible entity's/individual's annual income in Mexico (plus civil and criminal liability).
|
| Unlawful merger |
Fine up to 10% of the responsible entity's/individual's annual income in Mexico (plus civil liability).
|
| Late filing of a reportable transaction |
Fine up to 15% of the responsible entity's/individual's annual income in Mexico (plus civil liability). |
| Obstruction of a dawn raid |
Fine up to approx. USD 1.2 million (plus criminal liability).
|
