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Mexico: COFECE investigates possible monopolistic practices between competitors in the industrial gases market

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In brief

On 5 January 2022, the Investigating Authority of the Federal Economic Competition Commission (COFECE) published notice of an investigation, file IO-001-2021, for the alleged anti-competitive conduct of horizontal monopolistic practices in the market for integration, installation, maintenance and commercialization of equipment, accessories and spare parts for the use of industrial gases in Mexico.

This market is related to the infrastructure necessary to use industrial gases, which are used in different sectors, such as the energy, health, food, and chemical industries, as well as the construction and production of electronics, among others.

If the existence of a horizontal monopolistic practice is proven, economic agents could be fined up to 10% of their annual revenue. Those who have participated or contributed to this illegal conduct could be criminally prosecuted, and may be subject to 10 years in prison.

Recommended actions

  • In this type of proceedings, it is normal for the antitrust authority to request information and documents from the companies offering products and services related to the market under investigation. In the event the antitrust authority sends a request for information, it is essential to respond to such request; otherwise, the defaulting company will be subject to a fine.
  • The Mexican antitrust authority is empowered to conduct dawn raids (on-site unannounced visits at the company’s offices, through which they may request information and/or photocopy documents related to the market under investigation). In these cases, it is recommended to contact the company’s legal counsel and seek immediate advice from an antitrust and competition lawyer. Obstruction or failure to comply with a dawn raid may result in fines and/or criminal penalties.
  • In some cases, the antitrust authority considers it pertinent to summon individuals who are presumed to have knowledge of the market under investigation, e.g., technical personnel or managers of companies that offer products and services related to the market under investigation. In case an employee is summoned by the COFECE, it is recommended to consult with an attorney who specializes in competition matters.

In more detail

  • The investigation should not be understood as a judgement, but as an action by the authority to verify compliance with the Federal Mexican Antitrust Law.
  • Horizontal monopolistic practices are anti-competitive agreements, contracts or arrangements between competing economic agents, whose object or effect is the manipulation of prices, restriction or limitation of supply or demand, division or segmentation of markets, agreement or coordination of bids in auctions, as well as the exchange of information between competitors to carry out any of the aforementioned conducts.
  • This antitrust investigation was initiated on 25 June 2021, and it could take up to 120 business days, with the possibility of being extended four times for an additional period of 120 business days each.

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Author

Raymundo Enriquez is currently the managing partner of the Mexico offices and the lead partner of Baker McKenzie's Antitrust Practice Group in Mexico City. He was a member of the Firm’s Executive Committee and a previous chairman of the Latin America Regional Council where he also served as the Latin America chair of the Global Diversity and Regional Pro Bono Committees. Mr. Enriquez is recognized as a leading lawyer for competition / antitrust and for business by Chambers Latin America. He served as a board member for several Mexico companies. In addition, he was a visiting lecturer at the Mexican Bar Association and a part-time tax and foreign trade law professor at Universidad Iberoamericana, where he obtained his JD from the university’s School of Law.

Author

Luis Amado is a partner in the Antitrust & Competition Practice Group of the Firm's Mexico City office. He has more than 10 years of experience in his field and has conducted several antitrust and competition seminars for the telecommunications, automotive, electronics, medical, mining, metal, home appliance and white goods industries. Luis was part of the Firm’s EU Competition & Trade Practice Group in London, where he advised on antitrust matters. He was appointed Latin America's representative in the Firm committee responsible for abuse of dominance matters. He has also been a guest professor at Universidad Iberoamericana and IPADE, giving lectures on antitrust and competition.

Author

Alina de la Luz is an associate in the Firm's Antitrust Practice Group in Mexico. Prior to joining the Antitrust Practice Group at the Firm, she was part of the Mexican competition authority (Federal Economic Competition Commission), as part of the investigating authority. With more than 8 years of experience in economic competition, mainly in abuse of dominance and analysis of competition conditions, she has conducted investigations in several markets: financial, energy, ports, digital, telecommunications, and transportation, among others. Likewise, she was head of the economic competition subject at UNAM and has taught about competition in several forums.

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