Monthly Report - February 2022 – Comisión Federal de Competencia Económica

February 2022

BY THE NUMBERS

FRONTPAGE

Due to lack of Commissioners’ appointments, Cofece suspends the legal term to issue a resolution on barriers to competition in the card payments system

The Board of the Federal Economic Competition Commission (Cofece or Commission) suspended the legal term to determine if there are competition conditions in the card payments system, whose processing involves a clearinghouse (file number IEBC-005-2018). The foregoing is since the Federal Economic Competition Law (LFCE, per its initials in Spanish) establishes that the affirmative vote of at least five Commissioners is required to resolve procedures to determine the existence of barriers to competition and essential facilities. In contrast, its governing body currently has only four of the seven members that per constitutional mandate must integrate it.

The integration of the Board in accordance with the Constitution is an essential condition for the Commission to exercise all its powers. Therefore, Cofece urges the head of the Federal Executive and the Senate of the Republic to appoint those who will assume the vacancies of Commissioners, in order to resolve this and other relevant cases for the benefit of the efficiency of the markets and, above all, for the welfare of consumers.

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CONCENTRATIONS

Position concerning a concentration in the market of lithium

Concerning the authorized concentration between two foreign companies dedicated to the exploration and exploitation of lithium, Cofece clarified the following:

It corresponds to the Federal Executive, through the Ministry of Economy, to safeguard the compliance with the Mining Law and any aspect linked to the exploration, exploitation and profit of minerals in the national territory. This includes resolving on the granting, nullity or cancelation of concessions. Cofece does not have any attribution to issue determinations of this nature.
In terms of the Mining Law the concessions will be granted to societies constituted in accordance with the Mexican Laws, and the participation of foreign investors will be adjusted to the provisions of the law on the matter. For its part, the Foreign Investment Law allows the participation of foreign capital in mining, except in the case of radioactive minerals.
In the file CNT-097-2021, Cofece only resolved on the concentration application between the foreign companies Ganfeng International Trading (Ganfeng) and Bacanora Lithium (Bacanora). In virtue of the operation, Ganfeng indirectly acquired participation in the social capital of various Mexican subsidiaries, including some that have held mining concessions granted by the Federal Government for several years. The resolution of COFECE was not subject to any legal recourse.
It is worth mentioning that (i) the operation implied a change in the shares of the Mexican societies holders of the concessions, and (ii) other foreign investors who already participated in the Mexican concessionaire societies, a common situation in the Mexican mining sector.

In accordance with the Federal Economic Competition Law, the indicated operation had to be notified, and COFECE had the obligation to rule on the matter, solely within the scope of its powers, that is to say, for the effects of verifying any adverse impact on competition, which was discarded in this particular case. As the resolution itself indicates, it was issued without prejudice to any other authorization that may proceed in accordance with the law or the powers of other authorities. In this sense, it corresponds to the Executive to oversee and take any action it deems pertinent in accordance with the legal framework in force and its attributions in the mining sector

Concerning the authorized concentration between two foreign companies dedicated to the exploration and exploitation of lithium, Cofece clarified the following:

It corresponds to the Federal Executive, through the Ministry of Economy, to safeguard the compliance with the Mining Law and any aspect linked to the exploration, exploitation and profit of minerals in the national territory. This includes resolving on the granting, nullity or cancelation of concessions. Cofece does not have any attribution to issue determinations of this nature.
In terms of the Mining Law the concessions will be granted to societies constituted in accordance with the Mexican Laws, and the participation of foreign investors will be adjusted to the provisions of the law on the matter. For its part, the Foreign Investment Law allows the participation of foreign capital in mining, except in the case of radioactive minerals.
In the file CNT-097-2021, Cofece only resolved on the concentration application between the foreign companies Ganfeng International Trading (Ganfeng) and Bacanora Lithium (Bacanora). In virtue of the operation, Ganfeng indirectly acquired participation in the social capital of various Mexican subsidiaries, including some that have held mining concessions granted by the Federal Government for several years. The resolution of COFECE was not subject to any legal recourse.
It is worth mentioning that (i) the operation implied a change in the shares of the Mexican societies holders of the concessions, and (ii) other foreign investors who already participated in the Mexican concessionaire societies, a common situation in the Mexican mining sector.

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INSTITUTIONAL STRENGTHENING

EDGE recertification in gender equality

The Commission maintains the Move level of the international methodology EDGE, world leader in evaluation and certification standard for gender equality.

Since 2016, Cofece has implemented actions to achieve an inclusive work environment of growth and development so that staff have the same opportunities.

We will continue implementing actions to boost the development of all and to reduce the gender gap.

The Commission maintains the Move level of the international methodology EDGE, world leader in evaluation and certification standard for gender equality.

Since 2016, Cofece has implemented actions to achieve an inclusive work environment of growth and development so that staff have the same opportunities.

We will continue implementing actions to boost the development of all and to reduce the gender gap.

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BY THE NUMBERS

In February, the Commission handled 95 issues, of which 59 correspond to concentrations, 26 to procedures for monopolistic practices and prohibited concentrations, 3 are related to special procedures¹ and 7 are opinions on tender processes, concessions or permits.

Complaints, investigations and trial-like procedures

Follow-up was made to 3 complaints for anticompetitive conducts, these are still under analysis.
19 investigations of monopolistic practices were followed-up, all are ongoing.
Progress is being made in 4 trial-like procedures, that are still being processed.
2 procedures for barriers to competition are being analyzed.
1 case to declare competition conditions is still in process

Concentrations

59 concentrations were reviewed, of which 6 were authorized², 1 was closed after withdrawal, the remaining 52 are still under analysis.
The amount of the authorized operations is of 28 thousand 719 million Mexican pesos.

Opinions

Within the framework of the COFECE-Cofemer agreement, 1 opinion was issued on a regulation project contrary to competition

Amparo trials

There are 375 accumulated indirect amparo trials in process, of which 300 correspond to the matter of economic competition, 1 was granted, 1 was denied and 1 dismissed.