November 2022
Frontpage
Anticompetitive conducts
Cofece initiates two investigations
Opinions
Recommended reading
FRONTPAGE
Cofece imposes fines for more than 2 thousand 400 million Mexican pesos to LP gas distributors for manipulating prices and sharing the market to the detriment of consumers
Cofece imposes fines for more than 2 thousand 400 million Mexican pesos to LP gas distributors for manipulating prices and sharing the market to the detriment of consumers
The Board of Commissioners of the Federal Economic Competition Commission (Cofece or Commission) fined a total of 2 thousand 414 million 51 thousand 954 Mexican pesos to 53 companies and 34 natural persons acting on their behalf, for colluding to fix, raise, arrange and manipulate the distribution price of liquified petroleum gas (LP Gas) through plants and sale at service stations, as well as dividing, distributing, assigning or imposing portions of the market, through clients in the national territory, in terms of sections I and III of article 53 of the Federal Economic Competition Law (LFCE).1
Once the trial-like procedure was concluded, the Board of Commissioners of Cofece determined that there were sufficient elements to prove the absolute monopolistic practices conducted by the imputed distributors – which are part of the Soni, Nieto, Tomza, Simsa, Global, Uribe and Metropolitano groups- in Mexico City and some municipalities of the State of Mexico, Culiacán, Colima and Tamaulipas (File DE-022-2017 and accumulated).
Through these conducts, the economic agents agreed to maintain its market shares and avoid competing with each other, which translated into a deterioration of the supply conditions of this important energy source, as well as in the charging of undue overprices.
As a result, the Board of Commissioners of Cofece determined that, from 2007 to 2019, the offenders caused an estimated harm that amounts to 13 thousand 392 million 458 thousand 798 Mexican pesos. Considering the magnitude of the damage, the intentional character of the conducts and the relevance of the affected market in the general welfare, the conducts were classified as highly serious, and the mentioned fines were imposed.
The Board of Commissioners also considered it appropriate to impose the sanction of disqualification to various individuals who participated in some of the agreements proved during the validity of the LFCE
Economic agents have the right to appeal this resolution through an indirect amparo trial before the Federal Judicial Power.
ANTICOMPETITIVE CONDUCTS
Various economic agents are notified of a statement of probable responsibility for possible collusion in the market of equipment for the utilization of industrial gases
Cofece notified a statement of probable responsibility to various economic agents and natural persons after finding evidence of probable collusion (absolute monopolistic practice) in the market for the integration, installation, maintenance and commercialization of equipment, accessories and spare parts for the utilization of industrial gases in the national territory. These gases are used in relevant sectors such as energy, health, food, chemical, construction and production of advanced electronics, to name a few.
The investigation of this matter, processed under file number IO-001-2021, concluded on August 22, 2022. In this regard, the Investigative Authority indicated in its statement of probable responsibility that it had knowledge of facts that possibly derived in the realization of absolute monopolistic practices provided for article 53, section II, of the Federal Economic Competition Law (LFCE).
This notification of a statement of probable responsibility initiates the trial-like procedure, conducted by the Commission’s Technical Secretariat, in which the probable responsible may argue in their favor, offer evidence related to the alleged accusations made against them and present arguments. Once said procedure has been processed, the Board of Commissioners of Cofece will resolve in accordance with the law.
Cofece notified a statement of probable responsibility to various economic agents and natural persons after finding evidence of probable collusion (absolute monopolistic practice) in the market for the integration, installation, maintenance and commercialization of equipment, accessories and spare parts for the utilization of industrial gases in the national territory. These gases are used in relevant sectors such as energy, health, food, chemical, construction and production of advanced electronics, to name a few.
The investigation of this matter, processed under file number IO-001-2021, concluded on August 22, 2022. In this regard, the Investigative Authority indicated in its statement of probable responsibility that it had knowledge of facts that possibly derived in the realization of absolute monopolistic practices provided for article 53, section II, of the Federal Economic Competition Law (LFCE).
This notification of a statement of probable responsibility initiates the trial-like procedure, conducted by the Commission’s Technical Secretariat, in which the probable responsible may argue in their favor, offer evidence related to the alleged accusations made against them and present arguments. Once said procedure has been processed, the Board of Commissioners of Cofece will resolve in accordance with the law.
The Board of Commissioners of Cofece closes procedure to determine the existence of relative monopolistic practices in the commercialization of hydrocarbons in the country
In May 2018, the Investigative Authority initiated an ex officio investigation under file IO-001-2018. However, the Board of Commissioners of the Cofece resolved to close the proceeding as it did not have elements to prove the responsibility of any economic agent for having incurred in a relative monopolistic practice in the relevant markets of commercialization of regular gasoline, Premium and diesel, with a national geographic dimension.
In May 2018, the Investigative Authority initiated an ex officio investigation under file IO-001-2018. However, the Board of Commissioners of the Cofece resolved to close the proceeding as it did not have elements to prove the responsibility of any economic agent for having incurred in a relative monopolistic practice in the relevant markets of commercialization of regular gasoline, Premium and diesel, with a national geographic dimension.
COFECE INITIATES TWO INVESTIGATIONS
In the maritime transport of passengers and roll-on/roll-off cargo in Baja California Sur, to determine whether there are effective competition conditions
The Investigative Authority of Cofece published in the Federal Official Gazette the initiation of an investigation in the passengers and roll-on/rolloff cargo maritime transport services, as well as in cabotage navigation with origin or destination in Baja California Sur, in order to determine the existence of effective competition conditions. This inquiry was initiated ex officio and is identified with file number DC-001-2022.
The procedure takes place when the laws or sectorial regulations expressly provide for Cofece to resolve on the existence of conditions of effective competition in a market. In the absence of such conditions, the corresponding authority may implement regulations to eliminate the effects caused by the lack of competition. In this case, it would be the Ministry of the Navy in accordance with Articles 130 and 140 of the Maritime Navigation and Commerce Law.
During this investigation, the Investigative Authority has the attribution to request information or documentation from sectoral regulators or to request it from economic agents participating in the market, as well as to make use of other investigative powers. Likewise, it is open to attend to and receive information from any person who collaborates with the investigation. Said information may be submitted by e-mail to aicomunicacion@cofece.mx or directly to the Commission's Filling Office, located at Avenida Revolución 725, 1st floor, colonia Santa María Nonoalco, Benito Juárez, Mexico City, postal code 03700.
The Investigative Authority of Cofece published in the Federal Official Gazette the initiation of an investigation in the passengers and roll-on/rolloff cargo maritime transport services, as well as in cabotage navigation with origin or destination in Baja California Sur, in order to determine the existence of effective competition conditions. This inquiry was initiated ex officio and is identified with file number DC-001-2022.
The procedure takes place when the laws or sectorial regulations expressly provide for Cofece to resolve on the existence of conditions of effective competition in a market. In the absence of such conditions, the corresponding authority may implement regulations to eliminate the effects caused by the lack of competition. In this case, it would be the Ministry of the Navy in accordance with Articles 130 and 140 of the Maritime Navigation and Commerce Law.
During this investigation, the Investigative Authority has the attribution to request information or documentation from sectoral regulators or to request it from economic agents participating in the market, as well as to make use of other investigative powers. Likewise, it is open to attend to and receive information from any person who collaborates with the investigation. Said information may be submitted by e-mail to aicomunicacion@cofece.mx or directly to the Commission's Filling Office, located at Avenida Revolución 725, 1st floor, colonia Santa María Nonoalco, Benito Juárez, Mexico City, postal code 03700.
In the markets of corn and corn flour about possible barriers to competition and essential inputs
The Investigative Authority of Cofece published in the Federal Official Gazette (DOF) the initiation of an investigation to identify and, if applicable, determine the probable existence of barriers to competition and essential inputs in the markets for the distribution and commercialization of corn, as well as for the production, distribution and commercialization of corn flour and related services in national territory
In the extract of the initiation agreement of the investigation with file number IEBC-004- 2022, the finding of elements that suggest the lack of conditions of effective competition in the indicated markets is indicated. However, the initiation of this investigation does not imply any prejudgment by the AI of Cofece.
Any person may contribute with this investigation by providing information through the email address aicomunicacion@cofece.mx or directly at the Commission’s Filing Office, located at Avenida Revolución número 725, piso 1, colonia Santa María Nonoalco, Benito Juárez, Mexico City, postal code 03700.
The Investigative Authority of Cofece published in the Federal Official Gazette (DOF) the initiation of an investigation to identify and, if applicable, determine the probable existence of barriers to competition and essential inputs in the markets for the distribution and commercialization of corn, as well as for the production, distribution and commercialization of corn flour and related services in national territory
In the extract of the initiation agreement of the investigation with file number IEBC-004- 2022, the finding of elements that suggest the lack of conditions of effective competition in the indicated markets is indicated. However, the initiation of this investigation does not imply any prejudgment by the AI of Cofece.
Any person may contribute with this investigation by providing information through the email address aicomunicacion@cofece.mx or directly at the Commission’s Filing Office, located at Avenida Revolución número 725, piso 1, colonia Santa María Nonoalco, Benito Juárez, Mexico City, postal code 03700.
OPINIONS
SHCP, Banxico and CNBV are recommended to establish measures to promote competition in the Financial Technology Institutions sector
Cofece issued an opinion on different regulations governing Financial Technology Institutions (Fintech), as it identified regulatory instruments that could limit the process of competition and free market access in this sector to the detriment of users and suppliers. Therefore, it recommended the Ministry of Finance and Public Credit (SHCP), the Bank of Mexico (Banxico), the National Banking and Securities Commission (CNBV) and other supervisory commissions2, to evaluate the regulation related to cloud storage, the role played by commission agents, and the protection of the savings of Fintech users.
In this regard, Cofece recommended: (i) reviewing the proportionality of having another storage mechanism when using a cloud as a primary provider and (ii) evaluating the regulatory distinction regarding the limits for the use of commission agents of IFPEs vis-àvis credit institutions.
The Commission also recommended that the SHCP, Banxico and CNBV evaluate regulatory alternatives to ensure the protection of users of Fintech funds, based on international best practices.
Additionally, to promote efficiency and competition in the activities in which Fintechs participate, the use of open banking should be encouraged. Therefore, it is recommended that the CNBV and other supervisory commissions issue regulations on open banking3, as well as clear guidelines on the use of customer information.
Moreover, Cofece recommends that the CNBV assesses the proportionality and distinction of the regulation with respect to the notice and authorization obligations that must be complied with by developers of read-only standardized application programming interfaces (APIs)4 from domestic and foreign providers.
Cofece issued an opinion on different regulations governing Financial Technology Institutions (Fintech), as it identified regulatory instruments that could limit the process of competition and free market access in this sector to the detriment of users and suppliers. Therefore, it recommended the Ministry of Finance and Public Credit (SHCP), the Bank of Mexico (Banxico), the National Banking and Securities Commission (CNBV) and other supervisory commissions2, to evaluate the regulation related to cloud storage, the role played by commission agents, and the protection of the savings of Fintech users.
In this regard, Cofece recommended: (i) reviewing the proportionality of having another storage mechanism when using a cloud as a primary provider and (ii) evaluating the regulatory distinction regarding the limits for the use of commission agents of IFPEs vis-àvis credit institutions.
The Commission also recommended that the SHCP, Banxico and CNBV evaluate regulatory alternatives to ensure the protection of users of Fintech funds, based on international best practices.
Additionally, to promote efficiency and competition in the activities in which Fintechs participate, the use of open banking should be encouraged. Therefore, it is recommended that the CNBV and other supervisory commissions issue regulations on open banking3, as well as clear guidelines on the use of customer information.
Moreover, Cofece recommends that the CNBV assesses the proportionality and distinction of the regulation with respect to the notice and authorization obligations that must be complied with by developers of read-only standardized application programming interfaces (APIs)4 from domestic and foreign providers.
RECOMMENDED READING
Las cosas que debes saber de competencia económica [Things you should know about economic competition]
With the aim of promoting the culture of economic competition in Mexico, Cofece published “Las cosas que debes saber de competencia económica” [“Things you should know about economic competition"] as a compendium for those interested in learning basic concepts about our field.
Con el objeto de promover la cultura de la competencia económica en México, la Cofece publicó “Las cosas que debes saber de competencia económica” a manera de compendio para quienes están interesados en conocer conceptos básicos sobre nuestra materia.
This first edition contains a didactic description of the terms most used by Cofece to fulfill its constitutional mandate to guarantee free competition and free market access, as well as to prevent, investigate and fight monopolies, monopolistic practices, concentrations and other restrictions to the efficient functioning of markets
BY THE NUMBERS
BY THE NUMBERS
In November, the Commission handled 103 matters, of which 46 correspond to concentrations, 31 to procedures for monopolistic practices and concentrations, 6 special procedures and 20 opinions on tenders, concessions or permits..
Complaints, investigations, and trial-like procedures
- Follow-up was made to 6 complaints for anticompetitive conducts; 2 were dismissed, 2 were considered as not presented and 2 remain under analysis.
- 1 investigation for monopolistic practices was initiated ex officio, therefore at the end of the period, there are 21 ongoing investigations.
- Follow-up was made to 4 trial-like procedures, 1 of which was initiated during the period. 1 procedure was concluded in the closure of the file and 3 are still ongoing.
- 1 procedure for barriers to competition was initiated, therefore at the end of November, 5 investigations are still ongoing.
- 1 investigation was initiated to determine whether there are effective competition conditions in the maritime transport of passengers and roll-on/roll-off cargo in Baja California Sur
Concentrations
- 46 concentrations were reviewed, of which 6 were authorized and 2 were closed; therefore, at the end of the period 38 concentrations remain under analysis.6
- The amount of the authorized operations is of $19,176.3 million Mexican pesos
Opinions
- During the period, 1 opinion on regulation for financial technology institutions was issued.
Amparo trials
- During November, the Judicial Power resolved 9 amparo trials: 2 were granted, 2 were denied and 5 were dismissed.7 At the end of the period, 433 trials are still in trial, of which 351 correspond to economic competition matters.
