Cartels 2024

Last Updated June 11, 2024


Law and Practice


Nader Hayaux & Goebel is a market leader in competition, anti-corruption, M&A, banking and finance, fintech, securities and capital markets, structured finance, telecommunications, tax, insurance and reinsurance, project finance, real estate, energy and infrastructure, restructuring and insolvency and government procurement. The firm consists of 18 partners and more than 35 associates and represents one of the largest groups of corporate finance experts in the Mexican market, working together for more than 30 years. It is the only Mexican law firm with an office in London, and it has a strong focus on developing and pursuing business opportunities in Mexico, the UK and other European countries and enjoys excellent working relationships with law firms in all major cities internationally.

The Mexican legal framework for competition is comprised of the following main instruments:

  • the Federal Mexican Constitution (the foundation of the competition legal framework and the enforcement agencies);
  • the Federal Economic Competition Law;
  • the Regulations to the Federal Economic Competition Law;
  • the Regulatory Provisions for the Immunity and Sanction Reduction Programme provided for in Article 103 of the Federal Economic Competition Law; and
  • the Regulatory Provisions for the Qualification of Information Derived from Legal Counsel Provided to Economic Agents.

There are two autonomous government agencies with federal jurisdiction to enforce the competition legal framework. These entities are:

  • the Federal Economic Competition Commission (the “Commission”); and
  • the Federal Telecommunications Institute (the “Institute”, together with the Commission of Agencies).

The Institute oversees enforcing the law in the telecommunications and broadcasting sectors, while the Commission is responsible for enforcing the law in any other sector or market in Mexico.

The procedure is administrative and can only be implemented or carried out by such Agencies. It is impossible to exercise civil actions to enforce competition law, except for claiming damages and lost profits.

Specialised courts in competition, telecommunications and broadcasting exist as part of the competition system. These courts are the judicial authority in charge of any challenges filed by parties affected by the resolutions of the enforcement Agencies. Appeals against the decisions issued by specialised lower courts can be filed with specialised courts of appeal.

In 2020, the specialised courts in competition ruled that the Commission has jurisdiction over the markets for online search services, social networking and cloud computing services and that the Institute has competence over the mobile operating systems market.

The maximum administrative fine that the enforcement Agencies for cartel conduct can impose is up to 10% of the enterprise′s annual income. The Agencies can obtain the tax information from the corresponding authorities to determine the amount of the fine to be imposed. In case of recidivism, penalties can be doubled.

The Commission and the Institute are the only agencies allowed to file criminal complaints with the Office of the Attorney General. Criminal liability exists for cartel-like conduct and is punishable by imprisonment of five to ten years, regardless of the corresponding economic sanction imposed by the Agencies.

Once the Agencies’ decisions become final, the affected entities or individuals can claim damages and lost profits with the specialised courts on competition, telecommunications and broadcasting. 

Private entities and individuals have no legal right to claim damages or lost profits without first having the final resolution from the Commission or the Institute.

There is no private right of action for challenging cartel conduct. As mentioned in 1.2 Public Enforcement Agencies and Scope of Liabilities, Penalties and Awards, only the Commission or the Institute (either ex officio or by means of a complaint filed by any third party) can challenge cartel conduct.

There are five types of cartel conduct (also known as absolute monopolistic practices) specifically defined and catalogued by the Federal Economic Competition Law. Absolute monopolistic practices are considered illegal per se and consist of contracts, agreements, arrangements or combinations among competitors with the following purposes or effects:

  • price fixing – to fix, raise, co-ordinate or manipulate the sale or purchase price of goods or services supplied or demanded in the market;
  • output restriction – to establish an obligation not to produce, process, distribute, market (or acquire only a restricted or limited amount of) goods, or the provision or transaction of a limited or restricted number, volume or frequency of services;
  • market allocation – to divide, distribute, allocate or impose portions or segments of a current or potential market of goods and services by a determined or determinable group of customers, suppliers, timespans or spaces;
  • bid rigging – to establish, arrange or co-ordinate bids or abstentions from tenders, contests, auctions or purchase calls; and
  • exchange of information – to exchange information for the purposes referred to in the preceding paragraphs.

Cartels or absolute monopolistic practices are considered serious violations of the law; consequently, they are null and void and do not give rise to legal effects.

The statute of limitations is ten years, beginning on the date the prohibited conduct ends.

Mexican competition law can only be enforced within Mexico; however, the Commission has specifically entered into co-operative agreements with foreign agencies, namely those of the EU and the US. Thus, if the conduct occurs entirely in a foreign jurisdiction, the conduct cannot be enforced by the Agencies unless it occurs within the country. However, regarding investigations in which the possible cartel participated in multiple jurisdictions (including Mexico), the Agencies have the authority to participate in international cartel investigations and co-operate with other countries to tackle international cartel conduct.

Mexico has entered into different free trade agreements containing competition provisions that should be implemented; for instance, the revised United States–Mexico–Canada Agreement. Refer to 1.6 Extent of Jurisdiction and 3.5 Co-operation With Foreign Enforcement Agencies.

Although it is not a regulatory change, the Commission has recently announced its intention to increase the number of criminal cases by filing complaints with the Attorney General. This marks a significant development, especially considering that cartel cases traditionally have not resulted in criminal proceedings. See 2. Procedural Framework for Cartel Enforcement – Initial Steps.

The Agencies are required to have an objective cause to start an investigation. An objective cause is any indication of the existence of cartel conduct. According to the principles of the Mexican legal system, the investigative authority should clearly and duly justify its allegations.

Furthermore, the Regulations to the Federal Economic Competition Law list certain conducts that could drive an investigation either ex officio or prompted by a complaint filed by a third party. These conducts include:

  • the invitation (or recommendation) to other entities or individuals to co-ordinate practice offers and conditions of production, marketing or distribution of goods and services or to exchange information with such purpose or effect;
  • the fixing of the sale price offered by two or more competitors in Mexico considerably above or below the international reference price;
  • instructions or recommendations adopted by business associations, business chambers or similar organisations to perform any of the conduct described above; and
  • two or more competitors establishing maximum or minimum prices or adhering to prices issued by business associations or commercial chambers.

Different ways to initiate an investigation:

  • complaint filed by any entity or individual (even if the complainant is not the affected party);
  • a requirement by the executive branch, the Ministry of the Economy or the Consumer Protection Agency;
  • ex officio; and
  • investigations deriving from information obtained from leniency applicants.

Once the Commission or the Institute (through its investigative units) decides to start an investigation, it is required to publish a so-called “Initial Ruling in the Federal Official Gazette” – noting the beginning of a cartel investigation proceeding, the relevant market and the type of alleged conduct on which the investigation will be carried out.

After the publication of the Initial Ruling, the investigative process provides the corresponding enforcement Agency with a timeframe that runs from 30 to 120 business days (with the possibility to extend the investigative stage up to four times for 120 business days each time). The investigation process is confidential without the possibility of identifying the target entities or individuals.

Once the corresponding Agencies’ investigative unit considers that it has sufficient grounds, it submits the case to the Board of Commissioners to determine whether the alleged responsible participants are formally served with a document called the Statement of Probable Liability or the case is to be closed if the corresponding Agencies’ investigative unit gathered insufficient evidence. After serving the alleged responsible entities or individuals with the Statement of Probable Liability, a trial-like administrative proceeding starts. The parties to the trial are the investigative unit, the plaintiff, and the defendants. The defendants have 45 business days to answer every allegation and provide as much evidence as possible. Other steps are followed during the trial-like procedure, and upon completion, the Board of Commissioners should issue the resolution.

Dawn raids are possible and common during cartel investigations and, in some cases, are performed before the Initial Ruling mentioned in 2.1 Initial Investigatory Steps. The investigative unit carries out dawn raids.

A firm or individual facing a dawn raid must allow the visit to occur without obstructions and provide all necessary support to the visiting officials. If the firm or individual rejects or obstructs the visit in any manner, then the officials may use security forces to access the firm’s facilities, and the officials will include the fact in the corresponding minutes, and the alleged fact will be true.

It is possible for the visited firm or individual to include comments or arguments in the minutes and attach evidence or supporting documents to their arguments. The visited entities will be entitled to appoint two witnesses who will sign the dawn raid’s minutes.

Restrictions on Dawn Raids

The scope of the dawn raids is broad. The officials are authorised to access facilities, means of transportation, computers, electronic devices, storage devices, files, or any other elements that might contain evidence. The officials may also take pictures or record videos and copy any documentation, by any means, documents, books, files, or information generated by any technology (including computers and emails) or material support, provided that they are related to the investigation. Seizure of the relevant documents is not allowed. Furthermore, the Commission or the Institute cannot access information protected by the attorney-client privilege, as explained in detail under 2.7 Attorney-Client Privilege.

Procedure of Dawn Raids

The procedure of dawn raids is quite formal and must follow specific rules, as follows:

  • the investigative authority will issue an order containing the purpose, scope and term of the visit as well as the name and address of the visited economic agents;
  • the visited economic agent is warned that in the event of access denial, hindering the visit or refusing to provide the documents or information requested, the enforcement measures (such as penalties) shall be imposed;
  • the visits are carried out to obtain information and documents related to the investigation;
  • the visits cannot exceed two months (with the possibility of extending them for two additional months);
  • the visits can be performed on business days and during business hours, provided that the investigative authority may allow an inspection to be initiated on non-business days and during non-business hours or for an inspection to be continued into non-business days and hours;
  • the visited entity’s officers, representatives or employees must allow the on-site inspection, providing access to the facilities and information as mentioned above;
  • the visiting officers may request explanations regarding the facts, information or documents related to the purpose of the visit from the economic agent’s officers, representatives or personnel, whose answers will be recorded and included in the visit’s minutes;
  • the visits can be conducted simultaneously in two or more places at a time; and
  • the visiting officials will draft minutes in the presence of two witnesses, and a detailed description of the facts or omissions noted during the visit will normally be included.

The firms or individuals visited in a dawn raid are warned of certain measures, such as the imposition of fines. However, if spoliation of information occurs, the enforcement Agencies’ allegations may be considered proven, and criminal liability may be imposed.

The visited economic agent has the right to counsel; nevertheless, the visit can start without the presence of counsel. The counsel is authorised to speak or provide comments that will also be recorded in the minutes. Like any other officer or representative of the visited entity, the counsel will also be subject to the warnings made by the visiting officials.

The Requirement to Obtain Separate Counsel

Because competition law is a specialised legal framework, the economic agents typically engage separate counsels to address the investigations. For certain investigations, it is important to have an economist if some of the arguments used by the defendant rely on economic analysis. It is essential to note that engaging a separate counsel is not obligated.

Initial Steps Taken by Defence Counsel

The procedure to determine a violation of the Mexican competition law is divided into two stages. The first stage comprises the investigation procedure, and the second stage involves a trial-like administrative process as described in 2.1 Initial Investigatory Steps. The Commission or the Institute carries out both steps; however, the first stage is carried out by the investigative authority, which is an independent entity within the Agencies. The investigation procedure is confidential, so it is impossible to know if the economic agent is considered the target of an investigation or only a third party to the process.

Therefore, the defence counsel’s initial steps are to work with the economic agent to (internally) determine if responsibility exists. Even though the investigations are confidential, and it is not possible to determine who is under investigation, a visit or a request for information can provide sufficient background to carry out an assessment to prepare all the arguments and supporting evidence if a Statement of Probable Liability is to be served on the economic agents.

Evidence and testimony are obtained from diverse sources such as:

  • dawn raids;
  • official requests to any firm or individuals (including authorities);
  • information gathered from complaints filed before the enforcement Agencies;
  • intelligence investigations performed by the Commission or the Institute;
  • appearances of any individual related in any way to the purpose of the investigation;
  • anonymous complaints filed on the Commission’s website;
  • public sources of information;
  • economic analysis of market studies;
  • co-operation with other authorities;
  • information gathered in other procedures carried out with enforcement agencies; and
  • information obtained from leniency applicants.

Procedure for Obtaining Other Types of Information

The Agencies, and specifically the Commission, have an intelligence unit in charge of gathering information from different sources (such as surveys, internal analysis and public sources, among others). The enforcement Agencies can also request information from other governmental agencies or foreign competition authorities.

The companies or individuals can be obligated to produce documents or evidence if formally required to do so. The Mexican competition law does not have an extraterritorial effect; however, in some instances, companies or individuals located in Mexico must produce documents related to activities or facts of an international nature.

The attorney-client privilege only applies to the external counsel of the economic agents and communications among the target entity; the external counsel communications cannot be used as evidence during the process. For instance, if during a dawn raid, the enforcement agency officials find communications between the external counsel and their client, that information cannot be included (or even considered) to pursue the agencies′ allegations against the target firm or an individual. Recent judicial criteria have confirmed the attorney-client privilege in competition matters.

In addition, the Commission has published rules applicable to attorney-client privilege, establishing what type of information can be considered an attorney-client privilege and the procedure to request the Commission to treat the information gathered as such.

The rules on attorney-client privilege provide that the Commission will not use or grant evidential value to the communications if the economic agent proves that the communications with the external counsel had the purpose of seeking legal advice. The procedure to request that the information be treated as attorney-client privilege is the following.

  • During a dawn raid, the visited economic agent can request the visiting officials to classify certain documents or information as attorney-client privilege. The visiting officials must detail the request of the visited economic agent in the draft minutes.
  • Once the authority concludes the dawn raid, the visited economic agent has 20 business days to submit a formal request to the Commission. Even if the economic agent failed to file the request during the dawn raid, it has the right to submit the request once the dawn raid has finished.
  • The information subject to the privilege must be described, eg, if the information is digital, the exact location, name and type of document (agreement, letter, email, and memorandum), the author’s name and date.
  • A detailed description of the legal advice and the reasons for the information being considered attorney-client privilege must be provided.
  • Proof that the external counsel is legally authorised to practice law must also be included.
  • If the investigated entity operates outside of the Mexican borders, correspondence with external lawyers of that country is treated under the same principles.

Please note that for the Commission, documents may be privileged irrespective of whether they are labelled “Privileged and Confidential” (or some variant). Therefore, the labels of documents are indicative, not determinative.

Other Relevant Privileges

Formal rules in the Mexican Federal Constitution protect all entities and individuals. Some relevant privileges granted to individuals are the following:

  • due process; and
  • the presumption of innocence for defendants.

The due process privilege states that individuals should not be disturbed in their goods, domicile, papers or possessions without a written order from a competent authority, which should be duly supported.

Conversely, the presumption of innocence for defendants provides that if the Commission or the Institute do not gather enough evidence to accuse the defendants of cartel behaviour, the defendants should be considered innocent, and the investigation should be closed.

In general terms, both the entities and individuals co-operate with enforcement agencies. However, the consequences of non-cooperation with the Commission or the Institute may give rise to fines imposed on the economic agents that fail to co-operate. For instance, a fine of approximately USD18,000 can be imposed for each day of non-compliance with an order or requirement from the enforcement agencies.

In addition, non-cooperation can be considered an omission that affects the exercise of the Commission’s authorities, a criterion that is taken into account in the competition law when estimating the applicable fine.

The information obtained by the enforcement Agencies can be considered public, confidential or reserved as set out below:

  • information deemed public can be accessed by everybody or even published on the authority’s webpage;
  • reserved information can be accessed by economic agents who are part of the trial-like procedure; and
  • information deemed confidential can only be accessed by the economic agent who provided the information.

In order to classify information as confidential, an economic agent must show and justify that the information is, in fact, confidential in nature and file a summary thereof. Besides not being available from public information sources, the following are included as bases for confidential classification:

  • information that, were it to be disclosed, would cause damage or lost profits;
  • information that contains personal data that requires consent for disclosure;
  • information that would put security at risk; or
  • information which disclosure is prohibited by any legal provision.

Legal and factual arguments are raised at two different stages of the process. During the investigation stage, arguments can be raised through the responses and evidence provided to the official requests issued by the investigative authorities of the Agencies, regardless of the fact that it is not possible to know if the economic agent is a target or not at this stage.

The second stage of the process ‒ the trial-like procedure ‒ is the appropriate procedural moment to raise all arguments, file evidence, provide economic analysis and include arguments to persuade the enforcement agencies that the economic agent is not responsible for the execution of a cartel.

A leniency programme exists in Mexican competition law and is available for any economic agent that has participated in cartel conduct (either directly or indirectly). The general rules applicable to the leniency programme are the following:

  • the applicant should provide enough evidence to allow the enforcement agency to presume a cartel;
  • the applicant should fully and continuously co-operate throughout the investigation stage and, if required, during the trial-like procedure; and
  • the applicant must cease their participation in the cartel.

If said requests are fulfilled, the Agency will impose a minimum fine. The first applicant to the leniency programme will receive a total reduction of the fine. Further applicants who are not the first to provide evidence can also request such benefit, but they will only receive a reduction of 50%, 30% or 20% of the maximum permitted fine (depending on the chronological order in which requirements are submitted and on the supporting evidence provided).

The Commission published Guidelines on the Leniency and Fines Reduction Programme that details the steps an applicant should follow to apply for leniency, what an applicant should understand as full and continuous co-operation, and the procedure to revoke the benefit granted.

No information is available in this jurisdiction concerning amnesty.

The enforcement agencies may demand information from company employees of all levels of seniority. The requests for information can be through:

  • official requests; and
  • a requirement to appear in the enforcement Agencies’ offices, where officials perform interviews with company employees or managers.

Former employees or managers can also be required to provide information or appear for interviews or hearings.

The enforcement agencies can acquire the information directly from the target company or others (including governmental entities). To acquire the information desired, the Agencies typically issue official requests that should be fully answered within ten business days (a term that can be extended for another ten business days). The Agencies are authorised to issue as many official requests as they deem proper. Typically, the official requests contain a significant amount of information to be addressed, filed or produced. If official requests are not fully addressed, the governmental agencies can either reiterate their request or impose a fine for every day of non-compliance.

The enforcement agencies do not typically seek information from companies or individuals outside Mexico. However, there are legal instruments that allow enforcement agencies to obtain information located abroad.

There is inter-agency co-operation and co-ordination available at four different levels:

  • with public authorities;
  • with academic institutions;
  • with international institutions; and
  • with the social and the private sector.

Within the public authorities’ co-operation, the Commission has co-operation agreements with the Mexican Central Bank (Banxico), the Tax Administration Service (SAT), the Ministry of Economy (SE), the Ministry of Finance and Public Credit (SHCP), the Energy Regulatory Commission (CRE), and the Consumer Protection Agency (PROFECO), the Science and Technology Council (Conacyt), among others.

With academic institutions, there are agreements between the Commission and Instituto Panamericano de Alta Dirección de Empresa (IPADE) and Centro de Investigación y Docencia Económicas (CIDE). Regarding co-operation agreements with international institutions, the Commission has such agreement with the Inter-American Development Bank (BID), and finally, with the social and the private sector, the Commission has a co-operation agreement with the Consejo Coordinador Empresarial (CCE).

These interagency co-operation instruments are relevant since several cases have started by means of co-operation or information provided by other government agencies. In addition, the Mexican competition law provides that the SE and the PROFECO can file complaints for cartel behaviour. If the enforcement agencies learn that cartel conduct may result in damages or lost profits to consumers, the CPA should be informed so it can start an investigation accordingly.

The Commission is quite active in its relationship with foreign enforcement agencies. For instance, it is committed to adopting the best international practices through participation with international organisations such as the OECD, the International Competition Network, and the United Nations Conference on Trade and Development.

Some international treaties and instruments require the Commission to comply with co-operation mechanisms with other agencies. In addition, it has entered into co-operative agreements with other agencies, such as the one executed with the European Commission for increased co-operation on competition matters and in merger control cases. The co-operation agreement with the European Commission includes the possibility for either agency to remit a case to the other when potential law violations exist. It also provides for training and the exchange of officials between both authorities. For instance, in the past, US and British authorities have participated with the Commission to train their officials. For more information, see 1.6 Extent of Jurisdiction.

Criminal cartel cases can be filed with the Attorney General′s Office by the Agencies without necessarily having a final resolution. Therefore, enforcement agencies can file criminal claims once the investigative authority issues the Statement of Probable Liability. Third parties or other agencies cannot bring criminal cases for cartel conduct; however, to date, it is not common for a cartel investigation to give rise to criminal procedures.

Once the Attorney General′s Office is aware of the complaint, it will apply the criminal law rules to determine whether or not a crime has been committed. These rules and principles are quite different from the administrative procedure carried out by the Agencies. If the Attorney General’s investigation results in an alleged cartel crime, it will then file the case with a criminal court for the fining process. The defendant has the right to due process and to know the basis and rationale for the accusation.

As mentioned in 1.2 Public Enforcement Agencies and Scope of Liabilities, Penalties and Awards, the procedure to enforce competition laws in Mexico is administrative, and no civil actions to enforce such laws can be brought (other than damages or loss of profits civil procedures). Regarding the right of third parties to file complaints in order for the Agencies to start a cartel investigation, the third party may submit a plaintiff before such authorities through a written document containing:

  • the specifics of the alleged responsible entity or individual;
  • a description of the facts considered illegal, the market structure, and the goods and services involved;
  • how the conduct affects the market;
  • a list of documents and supporting evidence which may include minutes, chats, communications, videos, emails, audio recordings, statistics, market surveys; and
  • any other evidence or information that might help enforcement agencies to prove the case.

The complaints are filed with either the Commission or the Institute, and the investigation and analysis of the claim are carried out by the independent investigative authority of the applicable Agency, which will eventually do one of the following:

  • issue an official communication marking the beginning of the investigation, previously described as the Initial Ruling;
  • issue an official request to the claimant to petition fulfilment of the requirements of a complaint; or
  • issue an official communication refusing the complaint, either due to the lack of the necessary requirements or because the behaviour cannot be considered cartel conduct.

Defendants do not have access to the information in possession of the investigative authority while the confidential investigation is in process. Once the Statement of Probable Liability is served on the defendant, it is possible to know the specifics of the conduct attributed to the defendant.

Cartel conduct always implies that at least two involved parties are considered competitors. Therefore, the enforcement is typically brought against multiple parties within the same case. The identity of the parties involved in the conduct will be disclosed once the investigation stage is complete and the alleged responsible parties are served with the Statement of Probable Liability.

Depending on the type of procedure (ex officio or following a complaint), the burden of proof to initiate the cartel investigation is on the plaintiff or applicable Agency. Upon the completion of the investigation, should the investigative authority gather enough evidence (ie, from the plaintiff, information gathered during dawn raids, previous investigations, and information provided by the target entities and other parties), it will have the burden of proof by means of the Statement of Probable Liability.

The enforcement proceedings carried out by the Commission or the Institute are of an administrative nature. The finders of facts are both the plaintiff and the enforcement Agency. The Agencies enforce the law for those facts. In criminal cases, the finder of fact is the enforcement agency which files the complaint with the Attorney General. The Attorney General’s Office investigates the criminal case, and the criminal courts apply the criminal law to those facts.

Evidence obtained in one proceeding can be used in another proceeding if it relates to the facts and the target company. Information provided by applicants for the leniency programme is only used in the proceeding for which the information is provided.

According to the legal principles applicable in Mexico, the evidence should comply with constitutional standards, allowing the defendant access to due process. Therefore, the enforcement Agencies should produce and support their allegations with the highest standard of legal and economic analysis. If the Commission or the Institute fines the defendant, it could still challenge the decision by means of an amparo indirecto (constitutional injunction) proceeding before specialised courts on competition, telecommunications and broadcasting. Such courts will analyse whether the procedure performed by the enforcement Agencies followed minimum legal standards and principles; if it did not, the resolution could be amended or revoked. For more information, see 1.2 Public Enforcement Agencies and Scope of Liabilities, Penalties and Awards and 4.8 Available Forms of Judicial Review or Appeal.

Experts are, in some cases, fundamental to a proper defence. Economists, as independent experts, produce an important part of the arguments and evidence presented to the Agencies. Furthermore, if a communication or document is not written in Spanish, translation experts must translate it into Spanish or translate the appearance of a given person who does not speak Spanish and who is necessary for the cartel procedure.

Likewise, in the case of the amparo indirecto, other kinds of independent experts may be necessary depending on the market of the cartel investigation. The need for these experts depends greatly on the type of evidence that is part of the cartel procedure.

The attorney-client privilege is recognised, and documents protected under this principle cannot be used as evidence. See 2.7 Attorney-Client Privilege.

Sanctions are imposed directly by the Commission or the Institute, depending on the case. However, if the cartel investigation has led to a criminal complaint, these complaints are resolved by criminal courts, which are entitled to impose prison sanctions.

Sanctions are imposed directly by the Commission or the Institute, depending on the case. However, if the cartel investigation has led to a criminal complaint, these complaints are resolved by criminal courts, which are entitled to impose prison sanctions.

Other than the leniency programme mentioned in 2.11 Leniency and/or Immunity Regime, there are no plea bargaining or settlement procedures for cartel conduct.

No collateral effects (other than criminal complaints or civil cases to claim losses and damages) exist in Mexico. The Commission has been actively pursuing a fight against corruption agenda. As part of this agenda, there are initiatives to create collateral effects: for instance, the first case of debarment in public procurement processes or public bids of entities or individuals sanctioned for cartel conducts has been implemented, and other cases are expected to come to reality in the near future.

Criminal proceedings can only be started by means of a formal complaint brought by the Commission or the Institute. Criminal law is quite formalistic, and specific rules apply. Currently, only a few cases have been brought before the Attorney General. If, under criminal rules, the cartel conduct described in the Federal Criminal Code is carried out, then a specific unit of the Attorney General’s Office would require a criminal judge to start the fining process, provided that the corresponding judge will determine the applicable sanction.

The cartel investigations performed by the enforcement Agencies are administrative. The Mexican competition law allows companies and individuals to be fined after an adversarial proceeding in the form of a judicial trial. The enforcement Agencies are the only entities authorised to apply sanctions (other than criminal charges and resolutions determining damages and loss of profits). In the event of civil actions to claim damages and loss of profits, the specialised courts on competition, telecommunications and broadcasting will determine the corresponding amount to be paid, if applicable.

Sanctions are of an economic nature; however, the enforcement Agencies can order the correction or suppression of certain types of conduct in the future.

The Commission specifically encourages economic agents to implement competition compliance programmes as a preventative measure to avoid violations of the Mexican competition law. Nevertheless, no specific rules or benefits are included in the competition law.

Sanctions imposed by the enforcement agencies are for the benefit of the government and are not intended to provide consumer redress or any benefit to other affected parties.

A judicial review is the only procedure available to challenge the enforcement Agencies’ resolutions. The judicial challenge (known as indirect amparo) should be filed with the specialised courts on competition, telecommunications and broadcasting. Appeals against the decisions of a lower court are lodged with specialised courts or appeal courts on competition, telecommunications and broadcasting. No other remedies are available to challenge either inner process resolutions or acts or final resolutions other than the above-mentioned indirect amparo (constitutional injunction).

No private right of action exists for cartel conduct in Mexico. However, once the final resolution from either the Commission or the Institute is issued, any affected third party can file civil actions to claim damages and loss of profits, which will be brought before the specialised courts on competition, telecommunications and broadcasting.

Class actions for competition cases are allowed in Mexico when led by the enforcement Agencies; however, competition class actions are not common in Mexico.

No private right of action exists for cartel conduct in Mexico. Nevertheless, civil actions exist for damages and loss of profits.

Evidence obtained from government investigations is admissible and, in some cases, can be considered an indication of cartel conduct.

Because there is no private civil litigation to enforce competition law related to cartel conduct, there is no describable frequency of claims. Also, it is not common in Mexico to file civil actions to claim damages or loss of profits.

The compensation for successful attorneys is agreed upon between clients and their counsel on a case-by-case basis. The resolutions issued by the enforcement agencies do not compensate for legal representatives’ compensation.

The resolutions issued by the Commission or the Institute do not mandate that unsuccessful claimants be obligated to pay defence costs for counsel. Nevertheless, in a procedure to claim damages and loss of profits, and depending on the case, costs can be included as part of those damages.

According to the strategic plans of the Commission and the Institute, some markets or sectors will be given specific attention and may be the subject of future cartel investigations. On the Commission’s side, they published their 2022‒2025 strategic plan, and its priority sectors include food and beverage, transportation and logistics, financial, construction and real estate, energy, health, public procurement and digital markets. The Institute’s strategic plan for 2019‒2023 includes the digital ecosystem and new technologies as priorities.

According to the strategic plans of the Commission and the Institute, there are markets or sectors that will be given specific attention and may be the subject of future cartel investigations. On the Commission’s side, they published their 2022‒2025 strategic plan, and its priority sectors include food and beverage, transportation and logistics, financial, construction and real estate, energy, health, public procurement and digital markets. For the Institute, their strategic plan for 2019‒2023 includes as priority sectors the digital ecosystem and new technologies.

The Commission has published the following guidelines (which are non-binding); however, important criteria and interpretations are included therein:

  • Guidelines on information exchange between economic agents;
  • Guidelines on initiating an investigation regarding anti-competitive practices;
  • Guidelines on investigations regarding absolute monopolistic practices; and
  • Guidelines on the Leniency and Fines Reduction Programme.
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Cartel Enforcement

In Mexico, antitrust law and its regulations prohibit agreements between competitors with the purpose or effect to fix prices, co-ordinate output or production levels, allocate markets or engage in bid rigging. The exchange of competitively sensitive information between competing economic agents with the intent or effect to achieve any of the aforementioned conducts is also considered an absolute monopolistic practice (ie, a violation per se).

The body of laws that regulates cartels are the Mexican Federal Economic Competition Act (FCA) and the regulations thereto. The FCA has been in force since its publication in 2003, although it was significantly overhauled in 2014. Under the FCA, a cartel is an absolute infringement of competition law and punishable per se, which means that cartels are illegal regardless of the effect they may have. Accordingly, neither economic justifications nor efficiencies are admissible as a defence against liability.

There are two government agencies mandated with cartel enforcement under the FCA: (i) the Federal Competition Commission (“COFECE” or the “Commission”), and (ii) the Federal Telecommunications Institute (the “Institute” or the IFT and, together with COFECE, hereinafter referred to as the “Mexican competition regulators”). Cartel enforcement in the telecommunications and broadcasting sectors was delegated to the Institute, while the Commission is responsible for enforcing competition laws in all other industries and markets in the country. Final decisions of the Mexican competition regulators are subject to judicial review (juicio de amparo indirecto) before federal courts specialised on competition, telecommunications and broadcast.

Between January 2023 and April 2024 the Mexican competition regulators initiated two cartel investigations. COFECE initiated a cartel investigation in the Mexican market of cargo transportation (autotransporte de carga), and IFT in the market of public procurement of fixed telecommunications services (procedimientos de contratación pública de servicios de telecomunicaciones fijos). Typically, between two and seven investigations are opened every year.

Particularly in the case of COFECE, the key sectors and markets that are being and will probably continue to be under intense scrutiny are food and beverage, transportation and logistics, healthcare, financial services, real estate, energy and digital markets.

Finally, according to several public statements made by COFECE’s officials so far in 2024, the agency is about to initiate a “new phase” in Mexico’s competition policy, with the principal purpose, aligned with other jurisdictions, of not only protecting free markets but to deliver tangible benefits to the population. Below the authors describe certain actions that believe are signals of this new enforcement policy.

Criminal Cartel Prosecution – Strengthening Sanctions

Since the FCA came into force, price-fixing and similar agreements are considered criminal violations subject to criminal punishment and liability. Criminal prosecution, however, had only been used in a couple cases but recently (2024) COFECE filed a criminal complaint before the Attorney General′s Office charging certain economic agents with having engaged in collusive practices to manipulate the price of coatings used in the construction industry and signaled that an increased use of its authority to press criminal charges should be expected. Criminal sanctions for cartel conducts are imprisonment of five to ten years whereas administrative liability in the context of the COFECE proceedings can result in fines of up to 10% of the taxable revenue of the relevant economic agents and a prohibition to engage in commerce for a certain period, among others. It is to be noted that, so far, IFT have not filed criminal complaints against economic agents engaged in cartel conduct.

According to a COFECE statement, should the cartel be confirmed (the case before COFECE is still pending; the charged parties have received letters of objections and can now respond to the same and offer evidence), the collusive behaviour in the construction industry would violate the basic human right to decent housing, thus affecting the living conditions of the population, especially those of the most vulnerable groups.

In an interesting turn of events, the Office of the Attorney General will now have to conduct a criminal investigation into the alleged cartel in parallel to the proceedings before COFECE, thus yielding important legal questions, such as a potential scenario of conflicting decisions (for instance, should COFECE disagree with the objections raised by its Investigative Authority or if the federal prosecutors decline to prosecute notwithstanding a COFECE decision imposing liability) or the need to establish actual harm. As explained above, under the FCA collusion is a violation per se and COFECE does not need to establish actual harm to impose liability (although harm must be weighed at the time of fixing the amount of the fine); from a criminal perspective, however, it is questionable that in the absence of harm, criminal punishment should be imposed.

As these matters are subject to judicial review, it is likely that federal courts will ultimately determine if administrative or criminal responsibility should be imposed.

Under the leniency programme, the Mexican competition regulators grant immunity from criminal prosecution to self-report a cartel. This incentivises each cartel participant to confess their participation before any other cartel members does. Therefore, as it is expected that criminal responsibility would be implemented in more cases by the Mexican competition regulators in the future, the leniency programme will probably be an even more used tool by economic agents.

Claims for Damages Currently Making Their Way Through Courts/Class Actions

Individuals or companies that have suffered damages or losses from cartel conduct are legally entitled to file civil claims for damages against the cartel participants. However, this action has been rarely used in Mexico. In the context of enhanced enforcement where the Commission is determined to strengthen its powers to impose more robust and severe consequences on companies or individuals conducting practices that harm or diminish competition, an increase in civil claims arising out of cartel conduct may be expected.

In addition to the foregoing, consumers of goods or services can bring class actions in furtherance of collective or individual claims which affect them as a class. Also, under the FCA and the Federal Code of Civil Procedure, COFECE has standing to bring class actions acting parens patriae on behalf of consumers harmed by anti-competitive behaviour. To date, COFECE has never used this authority although in recent public events, COFECE has stated that it will shortly file its inaugural class action. This is consistent with the renewed interest on enforcement from COFECE and its desire to show concrete benefits obtained from such enforcement. Time will say if filing class actions claiming damages from cartels becomes a trend or not.

The right to file a class action expires after three and a half years from the day the damage was caused.

Pursuing Individuals Involved in Cartels

Article 127, Section X, of the FCA provides that individuals who directly or indirectly (on behalf or in the name of a company) participate in a cartel may, in addition to facing considerable fines, disqualified to engage in commerce, act as director, manager, executive, agent or representative of corporations or other entities, for a period of up to five years.

In recent cartel cases, COFECE has disqualified several individuals who participated in absolute monopolistic practices, probably because COFECE believes that fines have not been a strong enough deterrent of collusion or perhaps because it believes that personal liability coupled with corporate liability may have a more effective deterring effect within the business community.

In practice, managing a disqualification sanction has proven to be extremely complicated. Notwithstanding that this particular sanction has been in the FCA since 2014, to date there is no regulation for its implementation. Among others, complications arise from the fact that Mexican labour legislation does not contemplate this kind of administrative sanctions as a ground for termination of the labour relationship for cause. Furthermore, the disqualification is imposed on the individual and not its employer, which in practice is not technically bound by the COFECE order. The reality is that that this kind of sanctions raise serious concerns with respect to their compatibility with the basic human and constitutional right to have an employment.

As with other COFECE decisions, the only means of defence available for individuals who are disqualified by COFECE, is to petition for judicial review of through an amparo indirecto writ, which, in principle, does not grant injunctive relief against the disqualification. In an interesting development, however, in August 2023 a federal court specialised in competition, telecommunications and broadcast, granted a temporary stay of the disqualification to an individual who petitioned against disqualification, pending the final resolution of the case (Case No amparo indirecto 237/2023).

It is worth noting that the case described in the immediately preceding paragraph is related to a cartel investigation conducted by COFECE under file number DE-032-2019, in the market of production, distribution and commercialisation of corn tortillas in the municipality of Huixtla, Chiapas. As a result of its investigation, COFECE imposed a financial penalty to a supermarket chain as well as disqualification to the manager of a store in said municipality from acting as a director, administrator, manager, officer, executive, agent, representative or attorney-in-fact of any of the agents involved in the practice, as well as of any other legal entity the commercial activity of which is the production and/or commercialisation of corn tortillas in Mexico, for a period of four months, on the grounds that such manager participated in the cartel on behalf of the sanctioned company.

This is relevant because COFECE senior officers have publicly referred to this case as a landmark precedent which underscores the importance of compliance within the corporations and how they can incur liability for actions of their employees if they have not been adequately trained. The necessary question, however, is if indeed the issue is corporate compliance, why should the manager of a supermarket in a small town be personally held liable and subject to disqualification. As noted above, the consequences of a disqualification can be significant and therefore there will likely be increasing questions around these penalties if COFECE resorts to them more frequently.

Non-poach and Non-compete Agreements

Non-competition agreements are, in principle, prohibited, an considered a violation per se. However, guidance and practice from the Mexican competition regulators has established that such kind of restrictive agreements are permissible in the context of mergers and acquisitions and joint ventures, provided that such restrictions comply with the criteria issued by the Mexican competition regulators. Along these lines, entering into non-compete agreements prior to the closing of a transaction like, for instance, at the time of executing an NDA or a LOI, could result in a violation of Mexican law as the Mexican competition regulators could interpret theses clauses as agreements between actual or potential competitors in which one or several of them assume the obligation not to compete (thus effectively colluding).

The criteria laid down by the Mexican competition regulators basically indicates that the scope of non-competition agreements should be narrowed to the products or services commercialised by the acquired business at the time of acquisition (unless it can be established that expansion plans covered additional products at the time of the filing) and to the geographic footprint of the acquired business at the time of acquisition. Additionally, such kind of agreements should have a term not to exceed three years after the closing of the transaction or the termination of the joint venture.

These criteria have thus far served as a safe harbour for parties to understand whether their non-compete agreements may represent a risk of harming competition, particularly if a transaction is not subject to a merger control filing. In other words, the parties to an M&A transaction or a joint venture can assume that if the conform to such criteria, the risk that such clauses could be deemed anti-competitive is low and should therefore be upheld and enforced by courts in the event of a controversy.

With respect to non-poach agreements, in 2021 the Commission found that the Mexican football league and seventeen professional teams created horizontal restraints – agreements among competitors – to set (i) a salary cap for female players and (ii) a non-poaching agreement for male players (known commonly as the gentlemen’s agreement). This case increased scrutiny and lead to a more active focus on non-poaching agreements, wage-fixing agreements, and even information exchanges among employers. Because of the global trend to look into these arrangements, especially in the US, it is expected that COFECE will maintain a heightened interest in this type of agreements.

In more recent developments, COFECE has taken the position that such arrangements are analysed under the same framework that COFECE applies to non-compete agreements (that is, no more than three years, clearly identified obligors and restricted business and territory not to exceed the narrower between Mexico and the demonstrable footprint of target, as described above).

The main problem of this approach though, is that, as noted above, an agreement not to compete in a certain territory or with respect to certain products or customers is, in principle, a violation per se, which is only permissible per COFECE criteria and guidance when negotiated in the context of an M&A transaction or a joint venture and for a short time after the closing of the former or the termination of the latter. As noted above, a non-compete as part of an NDA agreement, for instance, would raise significant concerns under Mexican law. Non poaches, however, are usually an essential requirement to allow for diligence or even discussions in certain M&A and joint venture transactions; they are usually tied to know-how, business and trade secrets and other plausible reasons under commercial and intellectual property laws. Thus, subjecting these agreements to the same standards of non-competes has created and will likely continue to create risks and result in the need for careful review by counsel.

Antitrust considerations aside, in jurisdictions like Mexico, which have labour laws that are very protective of employees, these restrictions must be considered carefully, as they are likely to be considered illegal or at least unenforceable under labour laws and, more importantly, inconsistent with the basic human and constitutional right to be employed, no matter the business or competitive reasons behind those restraints or agreements.

Dawn Raids

Dawn raids are common in Mexico as part of a cartel investigation. Under Section III of Article 12 of the FCA, Mexican competition regulators are entitled to, among others, request support from law enforcement in dawn raids only in cases where the visited individuals or companies are not co-operating and/or are obstructing the down-raid.

Usually, law enforcement is not needed in dawn raids. However, in recent cases, the Mexican competition regulators, particularly the Commission, have summoned the presence of the National Guard in their visits to economic agents. Needless to say, the effect of having military personnel in the premises of the economic agent is significant. Again, this may be aligned with the renewed approach to enforcement that COFECE is pursuing.

COFECE vs IFT: The Fight for the Digital Economy and Other Markets

As previously mentioned, IFT has jurisdiction as an antitrust enforcement only in the telecommunications and broadcasting sectors, whereas COFECE has jurisdiction over all other markets and industries. However, in certain complex cases, the frontier separating the Mexican competition regulators has not been easy to find since both Mexican competition regulators have affirmed their jurisdiction and demanded to hear the matter.

In particular, both agencies have signaled great interest in becoming the leading antitrust authority in the digital markets. Cases involving OTPs, platforms, social media, data centres, online advertising and even e-commerce, have seen enforcement efforts from both Mexican competition regulators. While these jurisdictional disputes have been more relevant in merger control cases than in cartel investigations. However, this issue could also become relevant for cartel enforcement and could complicate investigations and the imposition of liability.

As market probes, monopolisation and cartel investigations become more relevant in these sectors, these disputes will likely continue until such a point where courts have to intervene and set clear boundaries to the jurisdiction of the agencies, unless of course the Mexican competition regulators are able to collaboratively define such boundaries.

Final Note

The cases and trends discussed in this document provide some insights into how the Mexican competition regulators and courts have approached, and may continue to approach in the future, cartel cases. Based on the discussion, it is fair to say that Mexico, like many other jurisdictions around the globe, will see an increase in competition (including cartel) enforcement. Per the reasons articulated, it is also fair to assume that at least in the near future, there will be more uncertainty in terms of predicting potential investigations and the outcomes thereof.

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Nader Hayaux & Goebel is a market leader in competition, anti-corruption, M&A, banking and finance, fintech, securities and capital markets, structured finance, telecommunications, tax, insurance and reinsurance, project finance, real estate, energy and infrastructure, restructuring and insolvency and government procurement. The firm consists of 18 partners and more than 35 associates and represents one of the largest groups of corporate finance experts in the Mexican market, working together for more than 30 years. It is the only Mexican law firm with an office in London, and it has a strong focus on developing and pursuing business opportunities in Mexico, the UK and other European countries and enjoys excellent working relationships with law firms in all major cities internationally.

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Galicia Abogados is a front runner in the Mexican and Latin American legal markets, and has more than 29 years of experience. Galicia is a renowned law firm for its specialised knowledge in the sectors of finance, energy & infrastructure, private equity, regulated industries, real estate & hospitality, and life sciences. Sustainability is at the top of the firm’s agenda when it comes to advising clients. Diversity, equity and inclusion (DEI) and pro bono work are part of Galicia’s core values. The firm’s DEI-driven culture has positioned 45%+ of women in leading roles (partner, counsel, executive and management) over the last five years. Galicia is ranked as a top leading firm in Mexico by Chambers and Partners and has been awarded Mexican Law Firm of the Year in 2013, 2015 and 2019; Latin American Law Firm of the Year in 2017; the Client Service Award in 2021 and 2022; and Latin América Outstanding Contribution: Diversity & Inclusion Firm of the Year in 2022.

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