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Mexico

Last Verified on Friday 3rd March 2017

    Applicable legislation and the competent authorities

    • Mexico

      As a result of the recent amendments to article 28 of the Mexican Constitution (published 11 June 2013), the competition legislation has been completely overhauled. Two new autonomous constitutional enforcement agencies have been created:

      • the Telecommunications Federal Institute (IFETEL), in charge of regulating, promoting and supervising the telecommunications, radio and TV industries, and to act as a competition enforcer in these sectors; and
      • the Federal Economic Competition Commission (FCEC), the competition enforcement agency for any other sector or industry.

      These new authorities took office on 10 September 2013, after the Senate's ratification of the new commissioners.

      As a result, a new Federal Law of Economic Competition (FLEC) has been enacted (in force as of 7 July 2014), as well as a new Telecommunications and Radio and TV Federal Law. However, legislation on merger control has been in effect since 1993.

      In addition to the FLEC, the following statutes and regulations are applicable with respect to merger control:

      • article 28 of the Mexican Constitution;
      • Telecommunications and Radio and TV Federal Law (Telecom Law);
      • General Regulations to the FLEC issued by the FCEC (the Interim Regulations by the FCEC) (still under discussion);
      • General Regulations issued by the IFETEL for the telecommunications, radio and TV sectors (the IFETEL Regulations);
      • Organic Statute of the Federal Economic Competition Commission;
      • Organic Statute of the Federal Telecommunications Institute; 
      • Federal Civil Proceedings Code; and
      • the Guidelines issued by COFECE for the notification of concentrations (Guidelines) (with certain new features in a draft amendment, pending final approval).

      Last verified on Friday 3rd March 2017

    • Mexico

      Specific sectors, such as financial institutions, and insurance, do require authorisation from other regulatory authorities. From a competition standpoint, the IFETEL is now in charge of approving mergers in the telecom, radio and TV sectors, and the new FCEC reviews mergers in any other industry. In addition, for certain sectors or specific circumstances, authorisation from the foreign investment authorities may also be required.

      Last verified on Friday 3rd March 2017

    • Mexico

      Yes, Mexico has become a suspensory jurisdiction as a result of the new FLEC. As a result, transactions reaching statutory thresholds must be authorised and the parties are forbidden to close the transaction pending clearance (exceptions to notify a concentration are explained in question 9).

      Last verified on Friday 3rd March 2017

    • Mexico

      Yes, a transaction may be investigated and challenged after it has been approved only:

      • when the approval was obtained based on false information; or
      • when approval was subject to conditions to be complied after closing, and those conditions are not complied with in terms of the corresponding resolution.

      To our knowledge, the competition enforcers have not yet challenged any transactions for which express approval has been granted.

      Last verified on Friday 3rd March 2017

    • Mexico

      As a result of the reform to article 28 of the Mexican Constitution, the IFETEL is in charge of reviewing mergers in the telecom, radio and TV sectors, while the new FCEC is the authority in charge of competition merger enforcement in any other industry. The decision is made by the plenum of the relevant enforcer, each composed of seven commissioners. With respect to merger filings, the analysis is made by the Concentrations General Direction, which is supervised by the technical secretary in the case the FCEC and by the Concentration and Competition Conditions Direction in the case of the IFETEL. These directions issue internal reports for the commissioners of the relevant enforcer to review, analyse and discuss, upon adopting a final decision.

      In the case of investigations, the Markets Investigation Direction of the FCEC, which is supervised by the Investigative Authority, accrues out the investigation process, which is further resolved by the commissioners.

      Last verified on Friday 3rd March 2017

  • Time frames

    • Mexico

      No transactions have been prohibited lately; however, several transactions have been subject to remedies, including the following:

      • the FCEC conditioned the concentration between Aeromexico and Delta owing to certain competition concerns about the current competitive pressure Delta exercises over Aeromexico and the oversaturation in the local airports. In this regard, the Mexican competition enforcer, aligned with US authorities, subjected its clearance to the obligation of both airlines giving give up certain slots at local airport and at NY JFK airport and eliminate the duplication of designations on cross-border routes between (CNT-134-2015 and IEBC-001-2015).
      • The FCEC rejected Ienova and Pemex's newest intent of concentration, as the parties pretended to modify remedies imposed in prior approvals. Back in 2001 and 2005, the former competition commission authorised certain transactions regarding the acquisition of equity interests in gas pipeline projects whereby Pemex was determined to sell its participation through tender procedures if any third parties were interested in their acquisition. In the newest notification, the parties claimed that, given changes in market conditions, Pemex no longer had an obligation to sell its equity interest through tender procedures and could sell through private purchase to Ienova. The FCEC blocked the transaction claiming that there were no merits to sustain the non-compliance of the remedies imposed (CNT-085-2015). However, a new attempt was filed in 2016 (under docket CNT-093-2016) where, apparently, the FCEC might have approved the transaction finally (the public version of the resolution is still not available to confirm the final terms).
      • Alsea’s acquisition of Vips restaurants from Walmart, where the transaction was subject to eliminating exclusivity provisions and forced contracting provisions in shopping malls (file: CNT-095-2013). Late in 2015, the FCEC sanctioned Alsea as a result of failing to demonstrate that it had complied with the remedies and imposed a fine of approximately US$2 million. 
      • Soriana’s acquisition of supermarket chain Comercial Mexicana, which was subject to a divestment programme and not acquiring new stores in specific geographic areas (file: CNT-021-2015).

      Last verified on Friday 3rd March 2017

    • Mexico

      This is very case-specific, but it ranges from three to eight months for very complex matters. In addition, time frames for international transactions which are also subject to review by other competition enforces, tend to be consistent with clearance from relevant jurisdictions (especially when dealing with authorities like the DOJ, FTC or the European Commission).

      Last verified on Friday 3rd March 2017

  • Notifiable transactions: thresholds

    • Mexico

      Concentration reaching the statutory thresholds must be notified. The FLEC defines concentrations very broadly including any merger, acquisition of control or any other act whereby corporations, associations, shares, equity parts, trusts or assets in general are joined by and among competitors, suppliers, clients or any other economic agents. Therefore, this definition includes joint ventures and acquisition of non-controlling interests, or similar commercial arrangements. Acquisition of non-controlling shareholder may be exempted from filing obligations.

      As for the licensing of intellectual property rights, if a strict interpretation of the definition of concentration is made, the licensing of a patent, for instance, may also be considered as a concentration. Patent licensing involves the granting of the right for a licensee to use or exploit the patent for a specific period of time in a particular territory. Personal rights under Mexican law (such as a patent licence) are considered moveable goods (assets, if defined from an economic standpoint). As mentioned before, the authorities consider as a concentration, among others, the acquisition of control (without making reference as to whether this control is temporary) of assets. Notwithstanding the foregoing, we have no knowledge of any filing made to the competition authorities of a licensing agreement. Similarly, if one makes a strict interpretation of the definition of a concentration, a long-term supply agreement may be considered as one if, as a result thereof, one of the parties acquires control of the other. However, it would not be easy to make such an argument, and as far as we know, no filing has been made of a supply agreement as a concentration. This needs to be reviewed on a case-by-case basis.

      The FLEC includes the following exceptions to the filing obligations:

      • corporate reorganisations, where the economic agents belong to the same controlled economic group and no third party participates in the concentrations;
      • in the event the holder of shares or equity units or equity parts increases its relative participation in the capital stock of a company controlled by such holder since incorporation or since approved by the competition authority;
      • when creating administration or guarantee trusts or any other where the contribution of assets or shares has no purpose or consequence of transferring such assets or shares to a different company. However, the execution of a guarantee trust must be notified if the filing thresholds are met;
      • acts on shares performed abroad, related with non-residents in Mexico for tax purposes, as long as the companies involved do not acquire the control of Mexican companies, nor accumulate in Mexico shares, equity or assets in general, in addition to those already possessed, directly or indirectly, before the transaction;
      • when the acquirer is a variable income investment firm and the trans­action has as its purpose the acquisition of shares or other instruments with resources from the placement with the public of shares representing the capital stock of the investment firm, except when, as a result of the operations of the investment firm, it may have a significant influence in the decisions of the concentrated economic agent;
      • in the acquisition of shares, equity or other documents representing (directly or indirectly) the capital stock of companies listed on a stock exchange in Mexico or abroad, when the acts or successive acts do not allow the purchaser to hold 10 per cent or more of such shares, equity or other instruments, and, in addition, the purchaser has no authority to:
        • appoint or revoke members of the board of directors, or managers of the issuer;
        • impose, directly or indirectly, decisions in stockholders meetings or similar bodies;
        • maintain the holding of rights allowing it to, directly or indirectly, exercise the vote of 10 per cent or more of the company in question; or
        • instruct or influence, directly or indirectly, the management, operation, strategy or the main policies of a company, whether through ownership, through contract or in any other manner; and
      • when the acquisition of shares or equity or participation in trusts is performed by one or more investment funds with speculative purposes only, and have no other investments in companies or assets that participate or are employed in the same relevant market of the concentrated agent.

      The regulatory provisions issued by the FCEC include details as to how some of these exceptions should be considered.

      In addition, the transitory articles of the Telecomm Law provide that as long as there is a preponderant agent in the telecomm and radio/TV sectors with the purpose of fostering competition and developing long-term viable competitors, then concentrations with the following characteristics shall not require the prior authorisation of IFETEL:

      • they generate a sectorial reduction of the Dominance index, provided the HHI does not increase by more than 200 points;
      • it results in an economic agent having a sectorial market shares lower than 20 per cent;
      • a preponderant economic agent in the sector does not participate in the concentration; and
      • its effect is not to reduce, diminish or impede free competition in the corresponding sector.

      To this end, a notice must be filed within 10 business days following closing for the analysis by IFETEL.

      IFETEL has declared one preponderant agent in the telecommunications sector, and one preponderant agent in the radio/TV sector.

      Last verified on Friday 3rd March 2017

    • Mexico

      Change of control is considered a concentration. However, knowing that the definition of concentration is so broad and includes any acquisition of assets or shares even when not granting control, the enforcers have not reviewed a concentration solely as a result of a change of control. Notwithstanding the foregoing, the former competition authority and the Supreme Court of Justice of the Nation have discussed the notion of control upon analysing the term “economic agent” and “economic group of companies” for purposes of competition law, considering both legal and de facto control. In this regard, the Supreme Court made reference to different circumstances to define whether or not a person has a decisive influence. This may be the case if a person acquires the majority of the shares of a company, or if it has the authority to manage a company or to appoint the majority of the members of the board, among others. This may serve as a guideline for future merger cases. The filing exceptions may also provide some guidelines as to when the authority would consider that control does not exist. In addition, it is expected for the new regulatory provisions to provide additional details on what control means in the context of a concentration.

      Last verified on Friday 3rd March 2017

    • Mexico

      The FLEC provides that there are certain concentrations that are subject to prior authorisation before the regulators (depending on the particular sector), prior to their closing. These concentrations include those falling under any of the following thresholds:

      • those transactions involving an act or a series of acts, regardless of the place of execution, amounting in Mexico the equivalent of 18 million times the Units of Measure or more;
      • transactions involving an act or a series of acts with an accumulation of at least 35 per cent of the assets or capital stock of an economic agent, whose assets in Mexico or annual sales originated in Mexico involve more than the equivalent to 18 million times the Units of Measure; or
      • transactions involving an act or series of acts with an accumulation in Mexico of assets or capital stock higher than 8.4 million times the minimum general wage in force for the Federal District, and the transaction involves the participation of two or more economic agents with assets in Mexico or annual sales originated in Mexico, jointly or separately, of 48 million times the Units of Measure.

      The first two thresholds are referred to the target’s assets located in Mexico, target’s companies with direct operation in Mexico (mainly Mexican subsidiaries or branches) or target’s sales originated in Mexico. The third threshold considers a combination of sales or assets of the parties in Mexico, and an additional accumulation of assets or capital stock in Mexico of the target company only. There is no filing obligation if the target or seller company has no presence (assets or sales or both) in (or into) Mexico. However, there is no de minimis doctrine. If any of the thresholds is met, then the transaction must be filed, even if one of the parties has insignificant presence or sales in (or into) the country. Economic groups are indeed considered for purposes of the threshold. As mentioned for the response to question 10, the concept of economic group has been analysed for competition law purposes, considering both legal and de facto control of companies, and the common goal and direction of each of them.

      Last verified on Friday 3rd March 2017

    • Mexico

      If a transaction between foreign companies involves the indirect acquisition of Mexican subsidiaries or assets located in Mexico, the transaction must be notified, provided any of the referred statutory thresholds is met. An indirect acquisition is deemed to exist if, for instance, a company abroad is acquired and the acquired company has subsidiaries in Mexico.

      Last verified on Friday 3rd March 2017

  • Notification procedure, timing and penalties for non-compliance

    • Mexico

      The general rule is that a joint filing is required. In fact, the FLEC provides that all economic agents directly participating in the transaction shall make the filing. However, the FLEC will allow for the acquirer to make the filing independently if it can demonstrate:

      • the other parties are unable to do so (legally or de facto), and this is proved to the enforcer; or
      • a simplified filing is made (see question 19).

      Last verified on Friday 3rd March 2017

    • Mexico

      Currently, there is no standard form. The length of the preparation of the filing depends on the complexity of the case. For simple filings with no obvious competition concerns, a filing may be prepared in as short a time as a week, as no significant economic analysis is required, although the law now requires the parties to provide market share data of target and competitors in all cases. Cases involving horizontal overlaps would need to include economic analysis in relation to market definition, market share data, and barriers to entry, among others. Preparation for very complex filings may take several weeks as it may require substantial market definition, barriers and market power analysis. The webpage of the FCEC includes a guide for concentration filings that describes general information and suggestions with respect to the process and data to be provided. The former competition commission had a similar guide.

      Also, in recent complex cases, the authority has requested internal information of the parties such as board presentations and market surveys, among others.

      Last verified on Friday 3rd March 2017

    • Mexico

      Filing must be made prior to closing or prior to acquiring control (including de facto control). For transactions carried out abroad, the filing must be made before the concentration has legal or material effects in Mexico. With respect to mergers, according to the FLEC, the filing must be made prior to executing the merger agreement. In practice, the enforcer has raised no concerns on filings made after the merger agreement is executed, provided closing is subject to clearance. When there is a succession of acts, the filing must be made prior to perfecting the last act triggering the threshold. In any event, the parties cannot complete or close the transaction until clearance is granted.

      Last verified on Friday 3rd March 2017

    • Mexico

      There is no pre-notification requirement. However, it is customary to discuss a filing with the staff of the regulators prior to making the formal filing, and to share with the regulators drafts of filings or at least specific information to receive preliminary feedback prior to making the filing.

      Last verified on Friday 3rd March 2017

    • Mexico

      Considering the broad definition of a concentration, acquisition of non-voting securities would require notification, if any of the referred statutory thresholds is met, provided that the acquisition does not fall in any of the filing exceptions explained on response to question 9. In the case of options, it may be seen in two different ways:

      • there would be no obligation to file until the option is exercised, as the option itself does not represent equity; or
      • the option, as a right to sell or buy equity, is itself an asset and, as such, when acquired, if the asset value of the thresholds is met, may be subject to filing

      This would need to be analysed on a case-by-case basis.

      Last verified on Friday 3rd March 2017

    • Mexico

      Formally speaking, the FLEC does not provide for an alternative. In practice, we have seen discussions in several cases to execute a hold separate agreement with respect to Mexico, where the parties would not give material effects to the international transaction in Mexico until the enforcer issues its resolution. However, in discussing this issue with the staff of the FCEC, they have confirmed that this is not an alternative that the FCEC wishes to pursue; and that if this is done, the FCEC may consider this approach a violation of the FLEC.

      As long as the transaction is not cleared and closed, the parties shall act independently, as competitors.

      Last verified on Friday 3rd March 2017

    • Mexico

      Normal process. The enforcer must issue its resolution within 60 business days counted from the date of receipt of the notification or the submission of the additional information requested by the enforcer. If the enforcer has not issued a resolution at the end of this term, it shall be understood that the enforcer has tacitly approved the proposed transaction (afirmativa ficta). The period mentioned above may be extended once in exceptional cases for another 40 business-days. In practice, the enforcer normally issues requests of information, which interrupts the 60-day term. Requests of information are made in two different stages:

      • within 10 business days from filing, the enforcer may issue a request of basic information, granting the parties another 10 business days to respond; and
      • within 15 business days following filing (if no basic information request has been made), or following the date the parties submit the basic information requested by the enforcer, the enforcer may request additional information.

      This second request of information normally involves data required for substantive analysis. The enforcer grants 15 business days to respond, although extensions to this term are common. In complex cases, the enforcer would normally extend the term to resolve for an additional 40-business-day period.

      The FLEC provides for a fast-track process if the parties prove to the enforcer that it is notorious that a concentration does not have as its purpose or its consequences to have the effect of diminishing, damaging or impeding competition. In these cases, the enforcer must resolve the filing within a term of 15 business days from the date the enforcer formally acknowledges receipt of the filing through a resolution (which must be made within five business days following the date of the filing). The following are the cases eligible for the fast-track process, provided the acquirer does not participate in any related market and it is not an actual or potential competitor of the target:

      • if the transaction implies the first participation of the purchaser in the relevant market. To this end, the structure of the relevant market should not be modified and should only involve the substitution of the economic agent;
      • if, before the transaction, the purchaser holds no control of the acquired agent, and with the transaction it increases its relative participation in such agent, without having additional power to influence the operation, management, strategy and main policies of the company, including the appointment of members of the board and managers; or
      • if the purchaser has the control of a company and increases in relative participation in the capital stock of such company.

      Contacts with the authority are common prior to actually making a notification and during the process. Contacts will depend on the confidentiality and complexity of the transaction, but the authority is open to these discussions. The FLEC allows for interviews with the commissioners. When an interview is requested, all commissioners must be invited thereto, and all scheduled interviews are listed and published on the FCEC's webpage.

      Last verified on Friday 3rd March 2017

    • Mexico

      Resolutions clearing a transaction are valid for six months. Therefore, closing must be made within that six-month term. This term can be extended once, when justified to the authority. In addition, once the transaction closes, the parties must file the documents evidencing closing within 30 business days. If clearance is subject to conditions, the parties must evidence completion of the conditions within the specific terms provided under the resolution. In some cases, conditions are a requirement for closing. Failing to comply conditions may result in fines or actual revocation of the corresponding authorisation.

      Last verified on Friday 3rd March 2017

    • Mexico

      Yes. This is very common and useful, as it provides the interpretation that the FCEC and IFETEL normally follows. The General Concentrations Direction and Technical Secretary, in the case of the FCEC and the General Concentrations and Competition Conditions Direction for the IFETEL, are open to discuss notification requirements informally. However, it is important to note that the enforcers are not bound by the informal consultations.

      Last verified on Friday 3rd March 2017

    • Mexico

      Failing to file a transaction reaching the thresholds may result in significant fines for the parties. In addition, if during the investigation process it is determined that the transaction is an illegal concentration, additional fines may be imposed, as well as conditions (eg, undoing of specific legal acts) or the order to divest or unwind the corresponding concentration. Penalties may be imposed to both parties under the transaction, as well as to those individuals ordering or executing the transaction.

      The parties are bound to act independently as long as clearance and closing does not occur. Exchange of sensitive information among the parties, which may lead to anti-competitive conduct is also prohibited and would be investigated as a cartel violation.

      Last verified on Friday 3rd March 2017

  • The review process, confidentiality and the role or influence of third parties

    • Mexico

      There are two processes under which the enforcer may investigate concentrations: the filing process; and the investigation of concentrations that have the purpose or effect of reducing, damaging or impeding competition. During the filing process, the enforcer may request additional information. (See question 19 for details on these requests and the effects on timing to resolve.) Information requests are normally made to the parties, but in complex cases, third parties such as competitors, suppliers or clients may be requested to produce information that the enforcer deems required to complete its analysis. In addition to the filing process, the enforcer may investigate concentrations that have the purpose or effect of reducing, damaging or impeding competition. These investigations may be initiated:

      • within one year from closing, if the transaction was not subject to filing;
      • within 10 years, if the transaction was subject to filing, but the parties failed to make the filing; or
      • within 10 years if clearance was obtained through false information, or if the parties fail to comply with conditions imposed by the enforcer.

      During this investigation process, the enforcer may, through the Investigative Authority, request information to the parties or third parties, and request interviews with key officers. In addition, the enforcer may perform surprise (unannounced) verification visits (dawn raids).

      In recent cases, information has been requested to competitors to assess and confirm the size of markets subject to review, general market conditions (including potential barriers to entry), the effects of a particular transaction to the competition process, and market share data. This information plays a heavy role on the authority’s assessment of a transaction.

      Last verified on Friday 3rd March 2017

    • Mexico

      The FLEC allows the parties to classify information as confidential. The information is considered as confidential if by being disclosed it may harm the competitive position of the party providing it, or if the information involves disclosure of personal data which requires consent or risks the safety of the person involved, or if disclosure is legally prohibited. To this end, the information is classified as confidential when the party providing it expressly requests this classification, proves that the information is of a confidential nature and provides a summary of the information. If the confidential information cannot be summarised, the party in question is required to explain why a summary cannot be provided.

      Last verified on Friday 3rd March 2017

    • Mexico

      The notification itself is not publicised. However, whenever there is an interim resolution (eg, a request of information) during the process, the file number and the name of the parties are listed in the website of the enforcer. Once the filing process has concluded, third parties may have access to the file, except for confidential information and only if they submit a formal request through a regulated mechanism. In addition, a public version of the final resolution is published. In some cases, the authority has issued press releases on the general aspects of a resolution.

      Last verified on Friday 3rd March 2017

    • Mexico

      The former and current competition authorities have executed cooperation agreements with authorities in other jurisdictions, including the US, Europe, South Korea, Canada and others. The authority must seek waiver from the parties to disclose confidential information to foreign authorities, although the exchange remains confidential. However, in complex multi-jurisdiction transaction, the competition authority in Mexico has been in close contact with foreign authorities, especially with the European Commission, the Federal Trade Commission and the US Department of Justice, Antitrust Division..

      Last verified on Friday 3rd March 2017

    • Mexico

      The enforcer commences the analysis with the information included in the filing. With this initial analysis, the enforcer determines whether additional information from the parties is required. At the same time, the enforcer may request information from third parties, including competitors, clients, trade associations, suppliers and authorities within the country that may have any knowledge of the market or the parties. Informal requests are also common, so that the enforcer can confirm information provided by the parties or have a better grasp of the market dynamics. There is an extensive informal ex-change of information with merger control authorities abroad, mainly with authorities in the US and the European Union.

      Last verified on Friday 3rd March 2017

    • Mexico

      During the filing process, third parties are not allowed to participate. The economic agents may assist the enforcer by submitting data and documents that they consider relevant to the case. In addition, the claimant does not have access to the file. Notwithstanding the foregoing, at least in a couple of cases (Televisa/Radio Acir and Ferromex/Ferrosur), third parties have been able to intervene in the process as a result of constitutional control proceedings (amparo) before federal courts, claiming that the articles that based the dismissals were unconstitutional as they violated fundamental due process rights. On the other hand, third parties may file claims requesting the enforcer to investigate alleged illegal concentrations, only if these have not (or are not) the subject matter of a filing.

      Last verified on Friday 3rd March 2017

    • Mexico

      Both the commissioners and the staff of the enforcers would normally share their concerns during the review process. The process under the new FLEC requires that the regulator communicates to the parties the concerns they might have on the specific transaction. This communication must be made at least 10 business days prior to the date on which the matter is to be listed for discussion by the commissioners, to allow the parties to propose remedies. The proposal of remedies interrupts the 60-day term for the authorities to resolve.

      Last verified on Friday 3rd March 2017

  • Substantive analysis and remedies

    • Mexico

      The authority focuses on different aspects (both unilateral and coordinated effects). First, on the combined market shares of the parties and whether the acquirer, as a result of the transaction, may result in market power or increase such power with which it may diminish or damage the competition process. Second, the authority would analyse whether the transaction may have an exclusionary purpose or effect, establish barriers to entry, impede access to related markets or to essential facilities. To this end, the enforcer analyses both the relevant and related markets. Third, the enforcer would look into whether the transaction may have as its purpose or effect to substantially facilitate the commission of a monopolistic practice (whether horizontal cartels, or vertical restraints). If the parties submit an analysis of efficiencies, this shall also be considered by the enforcer.

      Last verified on Friday 3rd March 2017

    • Mexico

      A transaction with no horizontal or vertical overlaps should be cleared without any questioning by the authority (except, maybe, with respect to limitations to non-compete provisions). In addition, transactions where combined market shares are lower than 30 per cent would normally not raise concerns, but must be analysed on a case-by-case basis.

      The FLEC includes the notion of collective dominance, so this factor is also applied in the analysis of concentrations.

      Last verified on Friday 3rd March 2017

    • Mexico

      Economic efficiencies are an integral part of the analysis. However, the parties have the burden to prove efficiencies. If the parties do not argue efficiencies during the process, the authority will not include them as part of the analysis. The analysis is based only on competition issues, so no transaction is rejected on the grounds of job protection, national security or other national interests. National interests are considered by foreign investment authorities when authorisations are required because a de-Mexicanisation of a company exceeding certain asset values.

      In an authorisation of a joint venture between Mexichem and government-owned Pemex Exploración y Producción, the former competition authority performed a thorough analysis of the efficiencies resulting from the transaction, and the effect in such efficiencies if the transaction failed to occur.

      Last verified on Friday 3rd March 2017

    • Mexico

      Remedies can be negotiated during the process prior to the enforcer issuing a resolution. The process under the new FLEC requires that the regulator communicates to the parties any concerns they might have on the specific transaction. This communication must be made at least 10 business days prior to the date the matter is to be listed for discussion by the commissioners, to allow the parties to propose remedies. The proposal of remedies interrupts the 60-day term for the authorities to resolve.

      The enforcer prefers to impose structural remedies rather than behavioural. Structural remedies are easy to enforce as the enforcer requires the parties to file a divestment programme and report on com-pliance. Considering this, behavioural remedies are less common, but in some instances have been imposed. Enforcement of behavioural remedies has included the appointment and report of independent auditors, strict policies as to the exchange of information between officers or directors, or the filing by the parties of documents evidencing compliance.

      Last verified on Friday 3rd March 2017

    • Mexico

      Remedies are commonly negotiated with the authority. The enforcer would normally advise the parties on concerns related with the transaction, and the parties would address those concerns by either clarifying information, or proposing remedies. Third parties, on the other hand, are not allowed to challenge remedies, as they are not part of the filing process. Please refer to questions 30 and 31 for a discussion on third-party rights.

      Last verified on Friday 3rd March 2017

  • Judicial review

    • Mexico

      Resolutions of the competition enforcers may only be challenged through an amparo proceeding before federal courts. As part of the recent constitutional reforms, specialised competition tribunals have been created that will hear and resolve of any challenges to resolutions issued by the FCEC and the IFETEL. The amparo proceedings are to be resolved by specialised district judges, the resolutions of which would be resolved by specialised circuit courts. If constitutionality issues are to be resolved, the Supreme Court may be competent. The term for a final and definitive decision varies from case to case, but it may it will take several months or years to be resolved.

      Last verified on Friday 3rd March 2017

    • Mexico

      There have been very few merger cases judicially reviewed. Probably the most relevant recent cases include:

      • the proposed acquisition by Gruma of Agroinsa involving different flour markets for tortilla production. The former competition authority objected the transaction, but notified the resolution one day after the term to resolve had elapsed. The Supreme Court determined that the authority failed to notify the resolution in time, and thus the transaction was deemed as tacitly approved without any conditions;
      • the Ferromex/Ferrosur merger, involving railroad transportation; and
      • the resolution involving the Televisa/Iusacell transaction, as the court determined that the former competition authority failed to properly base an extension to a request of information, and thus resulted on the authority not rendering its resolution within the statutory time frame, which implied an unconditional tacit approval.

      Last verified on Friday 3rd March 2017

    • Mexico

      The federal courts only have jurisdiction to hear cases based on constitutional challenges filed against the rulings issued by the enforcer. The current process allows the federal courts to only examine the specific claims by petitioners concerning violations to the Constitutional Bill of Rights, mainly related to due process and proper interpretation of the law. It is not uncommon for federal courts to try and find for petitioners on procedural grounds to remand for the enforcer to replace parts of the original investigation or proceedings. However, federal courts have also had to analyse the full merits of a complaint and thus analysed and ruled upon the fundamental status and constitutional consistency of the FLEC, in some cases deciding that either the authority violated due process principles or that the FLEC had provisions that are incompatible with the Constitution and were thus removed from possible legal application.

      Last verified on Friday 3rd March 2017

  • Case law

    • Mexico

      The resolutions increasingly use economic analysis. As transactions increase their complexity, analysis is becoming much more thorough and sophisticated, and in complex cases, information is being requested by competitors, clients and suppliers. For this reason, competition practitioners usually involve teams of legal and economic advisers working in tandem. In addition, analysis of vertical effects of concentrations is increasingly becoming more important in the merger review process. In addition, the authority focusing its attention to justification of non-compete provisions, and restricting possibilities of interlocking directors. Finally, the separation of competition enforcement in two different authorities will certainly show the trend for sophistication by the authorities in competition cases in general.

      Last verified on Friday 3rd March 2017

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