Competition lay and policy in mexico

Competition Law and Policy in Mexico
What is the institutional structure for competition law enforcement and advocacy in Mexico? What are the principal strengths and weaknesses of the Commission? How can the Commission alter its procedures and policies to increase its efficacy? How can Mexico change the laws affecting the Commission to enhance its efficacy? For further information For furtherreading Where to contact us?

Introduction
Mexico’s competition policy was introduced as part of a decadelong reform initiative, begun in the mid-1980s, to end central government control and protection of domestic economic activity and to develop instead a market-based economy. A key element in the government’s economic reform was the adoption, in 1993, of the Federal Law of Economic Competition(LFCE), and creation of the Federal Competition Commission (CFC) to enforce it. In 1998, as part of a larger study, the OECD assessed the status of Mexico’s competition policy. The 1998 Report concluded that the LFCE reflected a well-conceived synthesis of contemporary economic principles, and that the CFC possessed both strong enforcement powers and authority to determine whether the absence ofeffective competition in a market sector warranted regulatory intervention by the government. The report noted, however, that there was no clear base of support for competition policy, and that the vigour of the Competition Commission’s enforcement record to that point could be questioned. In 2004, the OECD updated the 1998 study (available at www.oecd.org/competition, see country review section).The current report concludes that the strengths identified in 1998 still pertain, and that doubts about the CFC’s willingness to engage powerful economic interests have largely dissipated. Further, the Commission has matured into a credible and well-respected agency that has compiled a remarkable record of achievement given the difficulties of its environment. The agency still confronts an arrayof challenges and opportunities for improvement. The degree of general support for competition policy remains an open question, and certain deficiencies in statutory authority and judicial review processes constrain the CFC’s ability to address anticompetitive conditions effectively and efficiently. The Commission has also suffered a decline in resources despite an increasing workload, and somefeatures of the CFC’s procedures and methods of interface with other government entities reduce its efficacy as a law enforcement agency and competition advocate. The 2004 Report recommends changes that the Commission can make to enhance its performance, and also suggests certain alterations in government authority and procedure that the Commission is urged to seek from other branches of government.■

© OECD 2004

Organisation for Economic Co-operation and Development

June 2004

POLICY BRIEF

Policy Brief

Competition Law and Policy in Mexico

What is the institutional structure for competition law enforcement and advocacy in Mexico?
The Competition Commission, which has sole responsibility for applying the LFCE, is an independent agency attached to the Economics Ministry forpurposes of budgetary administration. The Commission’s Chairman and four commissioners (constituting the agency’s Plenum) are appointed for staggered ten year terms by the President of Mexico, and are removable only for cause. The Plenum makes determinations by majority vote. CFC cases may be initiated either on complaint by an affected party or “ex officio” by the Commission itself. Thecompetition policy objectives set out explicitly in the LFCE are: “to protect the competitive process and free market access by preventing monopolies, monopolistic practices, and other restraints of the efficient functioning of markets for goods and services.” Commercial practices are classified as either absolute or relative. “Absolute” monopolistic practices are prohibited per se and agreements to...