I. Content and purpose of the reform

On April 24, 2025, the President of the Republic submitted to the Senate a bill proposing a decree to amend, supplement, and repeal various provisions of the Federal Law on Economic Competition (hereinafter, the “Initiative”).

The Initiative stems from the constitutional amendment to Article 28, which dissolved both the Federal Economic Competition Commission (Cofece) and the Federal Telecommunications Institute (IFT), The amendment establishes that the authority responsible for ensuring competition and free market access across all sectors must possess legal personality, its assets, and technical and operational independence. It also mandates the institutional separation between the investigative and deciding authority.

Although the Initiative entails a significant institutional transformation, it preserves the core principles of the Federal Law on Economic Competition Law (hereinafter, the “LFCE”), which have been developed over more than three decades of administrative and juridical practice. Furthermore, it introduces changes aimed at strengthening economic competition in the country, while expressly excluding strategic areas and the activities of State Public Companies from the scope of the LFCE.

II. New authority

The Initiative establishes the National Antitrust Commission (hereinafter, the “Commission”), which will replace both Cofece and the IFT.

The Commission will operate as a decentralized public agency of the Federal Public Administration, under the Ministry of Economy. Its governing body will be the Plenum, composed of five commissioners, including a President. The commissioners will be appointed by the Federal Executive and ratified by the Senate. Among the commissioners, the President will be directly appointed by the Federal Executive.

The Plenum will be responsible for resolving matters related to economic competition and free market access in all sectors. It will also be empowered to issue Regulatory Provisions, its Organic Statute, guidelines, technical criteria, and orienting guides for the proper application of the LFCE.

However, the Initiative confers certain powers typically reserved for autonomous constitutional bodies, raising concerns about potential inconsistencies with the Commission´s legal status as a decentralized agency.

1. The Initiative empowers the Commission to issue “Regulatory Provisions”, defined as general rules necessary for the fulfillment of its functions. Nevertheless, such powers do not algin with the nature of a decentralized public agency. According to Article 89, Section I, of the Mexican Constitution, the issuance of general regulatory provisions that are binding on private parties is a prerogative exclusive of the Federal Executive.
2. As a decentralized body within the Federal Public Administration, the appointment of commissioners should fall exclusively within the powers of the President of the Republic, without the intervention of the Senate. However, the initiative requires that such appointments must be ratified by the Senate, which appears inconsistent with Commission´s formal legal nature.

In addition, the Initiative proposes that the Commission publish each commissioner´s position in citizen language. While this measure aims to enhance transparency, it could undermine the internal dynamics of collegiate deliberation, limiting flexibility in discussions. Moreover, given that many matters involve confidential information, the publication of such positions would not necessarily strengthen transparency.

On the other hand, the provisions that previously empowered the Commission to issue opinions on the anti-competitive effects of legislative initiatives, drafts regulations and decrees, as well as laws, regulations, agreements, circulars and general administrative acts are repealed. Henceforth, the Commission may only issue opinions at the request of the Federal Executive, and solely about draft laws, provisions, rules and general administrative acts.

The powers of the antitrust authority to file or communicate to the Legal Counsel of the Federal Executive Branch possible constitutional controversies and actions of unconstitutionality are also eliminated.

The Initiative grants several powers to the Investigative Authority, consistent with the functions it currently exercises under the LFCE. The appointment of its head will require the favorable vote of the president of the Commission.

III. Subjects and areas excluded from the application of the LFCE

The article to be amended provides that economic agents exclusively performing functions in strategic areas will not be considered monopolies for purposes of the LFCE. However, such law will remain applicable to acts that fall outside those strategic areas.

The initiative excludes from the scope of the LFCE those economic agents responsible for functions and activities that are exclusive carried out by the State in the strategic areas defined by the Constitution, as well as the activities performed by the State Public Companies and those that are expressly designated by laws enacted by the Congress.

The proposed reform, by excluding State Public Companies from the application of the LFCE in the activities they perform, could, in certain cases, create imbalances in competition between private economic agents and State Public Companies in non-strategic areas, which could affect competitive conditions in certain sectors.

IV. Incorporation of Criteria and Procedures from Secondary Legislation

The Initiative incorporates elements from the Regulatory Provisions of the LFCE by integrating the analytical criteria for determining substantial market power and the procedure for verify compliance with the obligation not to carry out concentrations that exceed the monetary thresholds established in the LFCE.

In addition, the Initiative adopts -with certain modifications- the procedure outlined in the Regulatory Provisions of the Federal Antitrust Commission, for the qualification of information derived from the legal advice provided by the economic agents, to exclude from the procedure, the communications between client and attorney”. However, this protection should be expanded, as the authority ought to act ex officio to exclude attorney-client- communications, thereby ensuring effective confidentiality in this area.

V. Anti-competitive conduct

The initiative establishes that the exchange of information whose purpose or effect is to fix prices, restrict supply, divide markets, or manipulate bids will be considered an absolute monopolistic practice. This amendment corrects the wording of the current Article 53, section V of the LFCE, which requires a prior agreement for the exchange of information.

Furthermore, the initiative stipulates, within the context of a collusive agreement, that not only current competitors will be considered, but also potential competitors.

Concerning relative monopolistic practices, the scope of anti-competitive object or effect of unlawful conduct is expanded to include cases where the ability of other economic agents to compete in the markets is unduly restricted.

Regarding concentrations, the Initiative incorporates a criterion to consider an unlawful concentration when it substantially affects the competition conditions or free market access in the relevant market or related markets.

Additionally, the period to investigate potentially unlawful concentrations that do not require prior notification is extended from 1 to 3 years.

VI. Investigation Stage

In the case of complaints, the Ministry of Economy may file a complaint without the need to comply with the formal requirements. This complaint will serve as the basis for the Investigative Authority to obtain, within 30 days, additional information that will allow it to determine whether there is sufficient ground to initiate an ex officio investigation.

The investigation periods are reduced from 4 to 3. Additionally, once the investigation is concluded, the deadline for submitting the investigative opinion to the Plenum is reduced from 60 to 30 days.

The Investigating Authority is empowered to carry out inspection procedures, conduct surveys or collect data through any available means. Although the scope and the parties to undergo inspections procedures, surveys, or collect data are not specified, the explanatory memorandum of the law states that the Commission must analyze the perspective and needs of consumers.

Regarding criminal complaints, the Initiative establishes that it will be presumed that the Investigating Authority knows of the probable conduct in violation of the LFCE and of the persons who probably committed them, with the investigative opinion of probable responsibility. The Regulatory Provisions will regulate the filing of complaints before the Attorney General’s Office.

The Initiative also establishes that, within 10 days following the date on which the Investigative Authority submits the opinion of probable responsibility, the Plenary will order the initiation of the proceedings, which will be conducted in the form of a trial, with the summons to the probable responsible party. If the Investigative Authority decides to close the case, the Plenary will have 10 days to decree such closure.

With the removal of the provision stating that if the Plenum disagree with closing the case, it could order the summons, we believe that the Plenum should not intervene in these decisions. Instead, the opinion of probable responsibility could be submitted directly to the body in charge of the like-trial procedure for the summons and, in the event of closure, the Investigative Authority should issue the agreement to close the case.

 

VII. Like-Trial Procedure

The Initiative establishes that the Investigative Authority has the discretionary power to present its position regarding the arguments and evidence submitted by the summoned party. Additionally, evidence may be dismissed if the probable responsible party fails to indicate the specific fact it seeks to prove through the evidence offered.

Once the evidence stage is concluded, the parties will be summoned to an oral hearing before the Plenum, during which they may make any statements they deem appropriate and allegations.

The term for the Plenum to issue a resolution is reduced from 40 to 30 days.

VIII. Concentrations

With respect to mergers, the thresholds established in Article 86 of the LFCE that determine whether a transaction must be previously notified for authorization are reduced. The thresholds decrease from 18 million to 16 million; from 8.4 million to 7 million and from 48 million to 40 million, all based on the daily value of the Unit of Measure and Update (UMA).

Additionally, the deadline for the Commission to issue its resolution is reduced from 60 to 30 days. If a merger resulting from a succession of acts is challenged, the authority is empowered to order the restitution of the situation to the state it was in before the succession occurred.

Legal acts or acquisition of shares, social parts or participation units, trusts are no longer exempt from pre-notification in the following cases: (i) when they take place abroad and are related to non-resident companies for tax purposes in Mexico, of foreign companies, provided that such companies do not acquire control of Mexican companies or accumulate in Mexican territory, shares, social parts, units of participation or participation in trusts or assets in general additional to those that, directly or indirectly, they owned before the transaction and (ii) when they are carried out by one or more investment funds with exclusively speculative purposes and without investments in companies or assets in the same relevant market of the concentrated economic agent.

Finally, the reform establishes the right of the economic agent to withdraw from the merger notification process or to waive the resolution issued in that process, which must be expressly ratified by the economic agent.

IX. Procedure to determine essential facilities or barriers to competition

The proposal reduces the timeframe for the Investigative Authority to issue its preliminary opinion from 60 to 40 days. If the preliminary opinion proposes closing the case, the Plenum will have 15 days to issue the closing resolution.

Once the proceeding has been substantiated, the deadline for the Plenary to issue a resolution is also reduced from 60 to 40 days. Additionally, the Comision is granted to issue a warning to applicants when their request does not meet the requirements set out in the Regulations of the LFCE.

If the request is submitted by the Ministry of Economy, the Investigative Authority will have 30 days to gather the necessary information and determine whether to initiate an ex officio investigation.

X. Exemption and fine reduction procedures

Concerning the benefits of exemption and reduction of fines in cases involving relative monopolistic practices or unlawful concentrations, the Initiative establishes two timeframes for requesting such benefits:

1. i) During the investigation stage. The benefit may be requested before the investigation period is extended for a second time. In this scenario, the proceeding may be concluded without attributing liability to the economic agent.
2. ii) During the trial-like procedure. The request may be submitted before the case file is completed. If granted, the fine may be reduced by up to 50%. In this case, the economic agent must acknowledge the monopolistic practice or unlawful concentration as stated in the statement of probable responsibility.

The Plenum may modify the terms and conditions proposed by the economic agent to ensure the restauration of competition and free market access.

Regarding the immunity program for absolute monopolistic practices, the Initiative outlines two distinct moments for applying for this benefit.

1. i) Before the initiation of an investigation. If the application is submitted at this stage, a minimum fine will be imposed on the economic agent. Subsequent applications may be eligible for fine reductions of up to 50%, 30% or 20%, depending on the order of submission.
2. ii) After the investigation has been initiated. The first applicant may receive a reduction of up to 50% of the fine, while subsequent applicants may obtain reductions of up to 30% and 20%. Applications for immunity may only be submitted before the publication of the agreement authorizing a second extension of the investigation period.

The initiative provides that the benefit may be revoked if the economic agent: i) fails to fully and continuously cooperate during the investigation and the trial-like proceedings; ii) does not terminate its participation in the collusive agreement, unless the Investigating Authority temporarily requests otherwise; and iii) fails to retain the submitted information for 5 years.

However, the revocation of the benefit does not prevent the authority from using the information and evidence provided by the economic agent.

In all cases, in addition to the reduction of the fine, economic agents that are granted immunity will not be disqualified, nor will they be included in the collective actions that the Commission may initiate to claim damages.

XI. Notices from the Federal Executive

The Federal Executive, through the Ministry of Economy, may notify the Commission on relevant matters regarding free market access and economic competition. In response, the Plenary will have a period of 10 days to issue an opinion on the matter raised.

If the opinion relates to a previously notified concentration, the Plenum may not extend the deadline to issue its resolution.

This provision should specify the scope of action for both the applicant and the Commission, as the power being regulated remains unclear.

XII. Enforcement measures and sanctions

The Initiative introduces new or modified measures and sanctions:

1. i) The fine for non-compliance with the Commission’s orders is increased from 3,000 times the general daily minimum wage in force for Mexico City (SMGV) to 8,000 times the UMA and may be imposed for each day the non-compliance persist.
2. ii) A fine of up to 30,000 times the UMA is established for failing to appear at a hearing without justified cause, or for failing to respond -or respond evasively- to questions asked during a hearing.

iii) A fine of up to 200,000 times the UMA is established for impeding or obstructing a verification visit.

1. iv) A fine of up to 10,000 times the UMA is established for failing to comply with a disqualification order relating to holding certain positions within a company. This fine may also be applied for each day of non-compliance.

Overall, the initiative proposes a substantial increase in the amount of economic sanctions.

CONCEPT	CURRENT FINES	INICIATIVE FINES
Absolute monopolistic practices	Up to 10% of the economic agent´s income.	Up to 20% of the economic agent´s income.
Relative monopolistic practices or unlawful concentration	Up to 8% of the economic agent´s income.	Up to 15% of the economic agent´s income.
Failing to notify a merger when legally required.   The initiative changes the wording to establish the sanction for having carried out a merger that exceeds the monetary thresholds, without having previously obtained the corresponding authorization.	From 5,000 times the SMGV to 5% of the economic agent´s income.	From 100,000 times the UMA to 10% of the economic agent´s income.   From 200,000 times the UMA to 15% of the economic agent´s income, when a concentration -challenged by the Commission- has been carried out, in addition to ordering the divestiture.
Failing to comply with the conditions specified in a concentration resolution.	Up to 10% of the economic agent´s income.	Up to 15% of the economic agent´s income.
Participating in monopolistic practices or unlawful concentration, on behalf or on account and order of undertakings.	Up to 200,000 times the SMGV.	Up to 350,000 times the UMA.
Contributing, facilitating or instigating the execution of monopolistic practices.	Up to 180,000 times the SMGV.	Up to 300,000 times the UMA.
Failing to comply with a resolution from the reduction of sanctions program for relative monopolistic practices or unlawful concentration.	Up to 8% of the economic agent´s income.	Up to 15% of the economic agent´s income.
Notary public or attesting official participating in a merger without prior authorization by the Commission.	Up to 180,000 times the SMGV.	Up to 200,000 times the UMA.
Failing to comply with the regulation related to an essential facility or for failing to eliminate the barrier to competition. The Initiative states that this sanction also will apply for failing to comply with an order of divestiture.	Up to 10% of the economic agent´s income.	Up to 15% of the economic agent´s income.

 

A new fine is established amounting to 200,000 times the UMA and up to 15% of the economic agent’s income for carrying out a concentration that has been challenged by the Commission.

The figure of an advisor is included among the individuals who may also be sanctioned with disqualification for participating in monopolistic practices or unlawful concentrations, when representing on behalf of or on account and order of legal entities.

A fine of up to 10% of the economic agent´s income may be imposed for failing to comply with an order to correct or eliminate the monopolistic practice or unlawful concentration, or for non-compliance with a divestiture order resulting from an unlawful concentration. This sanction also applies when the Commission orders the divestiture of a merger that, having exceeded the monetary thresholds, was not authorized or was objected to by the Commission.

In the event of non-compliance with an order to divest assets or corporate shares issued within a procedure relating to the absence of effective competition, a fine of up to15% of the economic agent’s income may be imposed.

Additionally, a new sanction consisting of temporary disqualification is introduced for economic agents that collude in public procurement procedures, prohibiting them from participating in such procedures for a period ranging from 6 months to 5 years.

In cases of recidivism and for asset divestment, it is established that the resolutions must become final at the administrative level. Likewise, regarding damages, the Initiative provides that individual and collective actions for compensation may be filed once the Commission has issued its resolution. The limitation period will begin to run from the date of such resolution.

However, considering that administrative resolutions may be subject to modification or revocation by the Judiciary, the limitations period should commence only once the resolution of the Commission has becomes final (res judicata).

The initiative also mandates the issuance of Regulatory Provisions by the Commission to define, in a clear, transparent, and predictable manner, the methodology and criteria for imposing fines.

The Initiative provides that compliance programs implemented by economic agents, to prevent and detect violations of the LFCE, may be certified by the Commission. This certification may be considered a mitigating factor when a sanction is imposed for anti-competitive conduct.

XIII. Telecommunications and Broadcasting

Finally, the initiative incorporates the regulation and the concept of preponderance in the telecommunications and broadcasting sectors. The definition of preponderance adopted corresponds, in essence, to that outlined in the transitory articles of the 2013 constitutional reform. Both the procedure for the declaration of preponderance and the procedure for issuing a favorable opinion on cross-ownership are, in substance, those established in the Federal Telecommunications and Broadcasting Law.

If a licensee fails to comply with the measures imposed by the Commission, the Commission may establish limits on the concentration of frequency bands, as well as on the granting of new concessions and on cross-ownership. If these limits prove insufficient to correct competition problems, the Commission shall inform the Digital Transformation and Telecommunications Agency, so that it may order the appropriate measures in accordance with the applicable legal framework.

Among the powers, the Commission is authorized to issue opinions on the impact on economic competition of the specific measures imposed by the Digital Transformation and Telecommunications Agency on preponderant economic agents or those with substantial power in the telecommunications and broadcasting sectors.