August 2022
Frontpage
Concentrations
Cofece sanctioned different economic agents for not notifying a concentration.
In three separate files, the Commission imposed total fines of 6.1 million Mexican pesos;
1 million 884 thousand 966 and985 thousand 820 Mexican pesos.
Defense before the judicial power
Recommended Reading
FRONTPAGE
Cofece notifies an economic agent of a statement of probable responsibility for possible relative monopolistic practices in the market of LP Gas
Cofece notifies an economic agent of a statement of probable responsibility for possible relative monopolistic practices in the market of LP Gas
The Federal Economic Competition Commission (Cofece or Commission) notified an economic agent for its probable responsibility in the conduction of relative monopolistic practices (price discrimination) in the market of import, commercialization, transport, storage, distribution and sale to the public of liquefied petroleum gas (LP Gas) in the national territory, goods and services related to them (file number DE-044-2018 and its accumulated DE-039- 2018).
In this regard, the Investigative Authority indicated in its statement of probable responsibility that it had knowledge of the possible existence of a practice prohibited by the Federal Economic Competition Law (LFCE, per its initials in Spanish) in its Article 56, section X, that implies establishing different prices or sale or purchase conditions for different sellers or buyers in equivalent conditions.
With the notification of this statement of probable responsibility, the trial-like procedure initiates in charge of the Technical Secretariat of this Commission, in which the probable responsible will be able to manifest what is within its right and offer evidence related to the alleged accusations made against it. Once these manifestations are made, the evidence has been processed and the corresponding arguments have been presented, the Board of Commissioners of COFECE will resolve in accordance with the law.
CONCENTRATIONS
Cofece imposes fines for a total of 6.1 million Mexican pesos to three economic agents for not notifying a concentration
The Federal Economic Competition Commission sanctioned a total of 6 million 114 thousand 941 Mexican pesos to three economic agents because they omitted to notify a concentration in terms of the Federal Economic Competition Law (LFCE or Law). The agents are: a financial institution, fiduciary of the irrevocable trust for the issuance, management and payment, number F/422 (F/422); Concesionaria de Proyectos de Infraestructura, S.A. de C.V. (CPI), y Marhnos Turismo, S.A. de C.V. (Marhnos).
The sanctioned economic agents conducted an agreement in 2016 by which F/422 acquired a percentage of the trust rights held by Marhnos and CPI within the Trust F/676. The amount of the operation of this concentration exceeded the thresholds established in Article 86, section II of the LFCE. Therefore, the agents were obliged to notify the operation, prior to its realization, which they omitted.
Failure to do so prevented the Commission from analyzing, in a timely and preventive manner, the risk that the concentration could generate in matters of competition and free market access. Consequently, file number VCN-004-2022 was opened and the verification procedure was initiated.
Once the matter has been resolved and the parties have been notified, the sanctioned economic agents have the right to appear before the Judicial Power of the Federation to review the legality of the actions of Cofece.
The Federal Economic Competition Commission sanctioned a total of 6 million 114 thousand 941 Mexican pesos to three economic agents because they omitted to notify a concentration in terms of the Federal Economic Competition Law (LFCE or Law). The agents are: a financial institution, fiduciary of the irrevocable trust for the issuance, management and payment, number F/422 (F/422); Concesionaria de Proyectos de Infraestructura, S.A. de C.V. (CPI), y Marhnos Turismo, S.A. de C.V. (Marhnos).
The sanctioned economic agents conducted an agreement in 2016 by which F/422 acquired a percentage of the trust rights held by Marhnos and CPI within the Trust F/676. The amount of the operation of this concentration exceeded the thresholds established in Article 86, section II of the LFCE. Therefore, the agents were obliged to notify the operation, prior to its realization, which they omitted.
Failure to do so prevented the Commission from analyzing, in a timely and preventive manner, the risk that the concentration could generate in matters of competition and free market access. Consequently, file number VCN-004-2022 was opened and the verification procedure was initiated.
Once the matter has been resolved and the parties have been notified, the sanctioned economic agents have the right to appear before the Judicial Power of the Federation to review the legality of the actions of Cofece.
Cofece sanctions five economic agents for a total 1 million 884 thousand 966 Mexican pesos. The fine is for not notifying a concentration
Banco Invex, S.A., Institución de Banca Múltiple, INVEX Grupo Financiero ―exclusively in its capacity as trustee of the Irrevocable Trust for the Issuance of Certificados Bursátiles Fiduciarios de Desarrollo No. 2695 (2695)―; Banco Invex, S.A., Institución de Banca Múltiple, INVEX Grupo Financiero ―exclusively in its capacity as trustee of the Irrevocable Trust of Administration number F/3436 (3436)―; Neology Inc. (Neology EUA); Neology, S. de R.L. de C.V. (Neology mx), and a natural person were sanctioned for a total of 1 million 884 thousand 966 Mexican pesos, for omitting the notification of a concentration in terms of the Federal Economic Competition Law
The imposed sanctions are due to the fact that, at the time, the involved economic agents requested the authorization of a concentration, consisting of the acquisition or subscription by Fideicomisos Inversionistas 2695 and 3436, of a portion of the social capital of Neology mx, property of Neology EUA, in partnership with Controles Electromecánicos, S.A. de C.V; however, after the operation, the investment trusts were associated to a natural person and Neology EUA; that is, in a different manner from what had been proposed in the notified operation and how it was authorized by the Board of Commissioners of Cofece.
Once the matter has been resolved and the parties have been notified, the sanctioned economic agents have the right to appear before the Judicial Power of the Federation to review the legality of the actions of Cofece.
Banco Invex, S.A., Institución de Banca Múltiple, INVEX Grupo Financiero ―exclusively in its capacity as trustee of the Irrevocable Trust for the Issuance of Certificados Bursátiles Fiduciarios de Desarrollo No. 2695 (2695)―; Banco Invex, S.A., Institución de Banca Múltiple, INVEX Grupo Financiero ―exclusively in its capacity as trustee of the Irrevocable Trust of Administration number F/3436 (3436)―; Neology Inc. (Neology EUA); Neology, S. de R.L. de C.V. (Neology mx), and a natural person were sanctioned for a total of 1 million 884 thousand 966 Mexican pesos, for omitting the notification of a concentration in terms of the Federal Economic Competition Law
The imposed sanctions are due to the fact that, at the time, the involved economic agents requested the authorization of a concentration, consisting of the acquisition or subscription by Fideicomisos Inversionistas 2695 and 3436, of a portion of the social capital of Neology mx, property of Neology EUA, in partnership with Controles Electromecánicos, S.A. de C.V; however, after the operation, the investment trusts were associated to a natural person and Neology EUA; that is, in a different manner from what had been proposed in the notified operation and how it was authorized by the Board of Commissioners of Cofece.
Once the matter has been resolved and the parties have been notified, the sanctioned economic agents have the right to appear before the Judicial Power of the Federation to review the legality of the actions of Cofece.
Cofece sanctions an economic agent for not notifying a concentration
The Federal Economic Competition Commission (Cofece or Commission) sanctioned Invesco Asset Management Limited (Invesco) for a total of 985 thousand 820 Mexican pesos for omitting the notification of a concentration in terms of the Federal Economic Competition law (LFCE or Law).
The imposed fine is based on the fact that, at the time, Invesco along with other economic agents, notified the restructuring of Codere, S.A., and as a result, Invesco acquired stock through two investments trusts not reported in the notified transaction or in the information provided to the Board of Commissioners of Cofece to obtain the authorization to the operation.
This change generated that it was a different operation that required to be notified again prior to its execution, because the concentration exceeded the thresholds established in Article 86, Section III of the Federal Economic Competition Law (LFCE, per its initials in Spanish), and by not doing so, Cofece was prevented from analyzing in a timely and preventive manner the impact, as well as the risk that it could generate in competition and free market access.
The Commission notified Invesco, as part of its resolution regarding the file (VCN-003-2022), that all acts carried out in contravention of Article 86 of the LFCE will not generate legal effects; therefore the acts related to said concentration cannot be registered in the corporate books, formalized in a public instrument, nor be inscribed in the Public Commerce Registry until, if appropriate, the favorable authorization from Cofece is obtained.
In this regard, the economic agent was informed that, upon payment of rights, and accompanying its letter with the corresponding information and documentation (Article 89 of the LFCE), the Board of Commissioners can analyze and resolve regarding its participation in said transaction.
Once the matter has been resolved and the parties have been notified, the sanctioned economic agents have the right to appear before the Judicial Power of the Federation to review the legality of the actions of Cofece.
The public version of the resolution may be consulted in the opinions and resolutions portal of Cofece's website within the legal term established in Article 47 of the Regulatory Provisions of the Federal Economic Competition Law.
The Federal Economic Competition Commission (Cofece or Commission) sanctioned Invesco Asset Management Limited (Invesco) for a total of 985 thousand 820 Mexican pesos for omitting the notification of a concentration in terms of the Federal Economic Competition law (LFCE or Law).
The imposed fine is based on the fact that, at the time, Invesco along with other economic agents, notified the restructuring of Codere, S.A., and as a result, Invesco acquired stock through two investments trusts not reported in the notified transaction or in the information provided to the Board of Commissioners of Cofece to obtain the authorization to the operation.
This change generated that it was a different operation that required to be notified again prior to its execution, because the concentration exceeded the thresholds established in Article 86, Section III of the Federal Economic Competition Law (LFCE, per its initials in Spanish), and by not doing so, Cofece was prevented from analyzing in a timely and preventive manner the impact, as well as the risk that it could generate in competition and free market access.
The Commission notified Invesco, as part of its resolution regarding the file (VCN-003-2022), that all acts carried out in contravention of Article 86 of the LFCE will not generate legal effects; therefore the acts related to said concentration cannot be registered in the corporate books, formalized in a public instrument, nor be inscribed in the Public Commerce Registry until, if appropriate, the favorable authorization from Cofece is obtained.
In this regard, the economic agent was informed that, upon payment of rights, and accompanying its letter with the corresponding information and documentation (Article 89 of the LFCE), the Board of Commissioners can analyze and resolve regarding its participation in said transaction.
Once the matter has been resolved and the parties have been notified, the sanctioned economic agents have the right to appear before the Judicial Power of the Federation to review the legality of the actions of Cofece.
The public version of the resolution may be consulted in the opinions and resolutions portal of Cofece's website within the legal term established in Article 47 of the Regulatory Provisions of the Federal Economic Competition Law.
DEFENSE BEFORE THE JUDICIAL POWER
The fine imposed by Cofece for absolute monopolistic practices in the market of commercialization of gasolines in service stations of Baja California is confirmed.
The Second Specialized District Court denied the amparo requested by a natural person and Grupo Empresarial Cachanilla, S.A. de C.V., who did not challenge the decision through an appeal for review, and therefore the sanctions imposed by the Board of the Federal Economic Competition Commission (Cofece) for absolute monopolistic practices in the market for the commercialization of gasoline in service stations in the state of Baja California remain confirmed.
The resolution was issued by the Board of Commissioners of Cofece in August 2020, where it was proved that different economic agents and natural persons who acted on their behalf committed the sanctioned absolute monopolistic practices. Said anticompetitive practices consisted in agreements to maintain gasoline prices at the maximum price established by the Ministry of Finance and Public Credit, without applying a fiscal stimulus applicable in 2017, as well as the coordinated non-implementation of discounts to such price.
The Second Specialized District Court denied the amparo requested by a natural person and Grupo Empresarial Cachanilla, S.A. de C.V., who did not challenge the decision through an appeal for review, and therefore the sanctions imposed by the Board of the Federal Economic Competition Commission (Cofece) for absolute monopolistic practices in the market for the commercialization of gasoline in service stations in the state of Baja California remain confirmed.
The resolution was issued by the Board of Commissioners of Cofece in August 2020, where it was proved that different economic agents and natural persons who acted on their behalf committed the sanctioned absolute monopolistic practices. Said anticompetitive practices consisted in agreements to maintain gasoline prices at the maximum price established by the Ministry of Finance and Public Credit, without applying a fiscal stimulus applicable in 2017, as well as the coordinated non-implementation of discounts to such price.
RECOMMENDED READING
Accountability Agenda
Since its creation, the Federal Economic Competition Commission has worked to consolidate itself as a benchmark institution in terms of transparency and accountability. As part of this effort, the 2022-2025 Accountability Agenda is published, which presents the reports that Cofece will publish, as well as the dates on which they will be issued.
The documents referred to in this Agenda will be published in our portal and, if applicable, in the National Transparency Platform
BY THE NUMBERS
BY THE NUMBERS
In August, the Commission handled 111 matters, of which 58 correspond to concentrations, 32 to procedures for monopolistic practices and concentrations, 5 special procedures and 16 opinions on tenders, concessions or permits.
Complaints, investigations and trial-like procedures
- Follow-up was made to 8 complaints for anticompetitive conducts, 5 remain under analysis.
- One investigation for monopolistic practices was initiated and another one was concluded, therefore, at the end of the quarter, 19 investigations are ongoing.
- One trial-like procedure was initiated, therefore at the end of the period 5 are still being processed.
- 4 procedures for barriers to competition were analyzed; they are still being processed.
- One procedure to resolve on competition conditions is still being processed.
Concentrations
- 58 concentrations were reviewed, of which 15 were authorized1.
- The amount of the authorized operations is of $51,315.7 million Mexican pesos.
Opinions
- During the period, 6 ex officio regulatory analyses were carried out.
Amparo trials
- During August, the Judicial Power resolved 7 amparo trials: 1 was granted; 1 was denied and 5 were dismissed. At the end of the period, 420 trials are still in trial, of which 327 correspond to economic competition matters.
ACUERDO mediante el cual la Comisión Federal de Competencia Económica da a conocer el calendario anual de labores para el año dos mil veintitrés y principios de dos mil veinticuatro.
