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Mexico: COFECE probes the maritime transportation market in the State of Quintana Roo for possible absolute monopolistic practices

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In brief

On 13 July 2021, the Federal Economic Competition Commission (COFECE) published in the Federal Official Gazette1 the notice regarding the initiation of an investigation due to possible absolute monopolistic practices allegedly carried out in the market for maritime transportation services in the state of Quintana Roo.

Absolute 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. These practices can also be referred to as horizontal or cartel practices.

Cartel practices are considered null and void and, consequently, shall not produce any legal effect. If the existence of an absolute monopolistic practice is proven, the responsible economic agents may be fined up to 10% of their annual income (in Mexico). Those who have participated or contributed to a cartel practice may be imprisoned for up to ten years under Mexican criminal law.

Recommended actions

  • During this investigation process, COFECE may request information and documents from companies that offer products and services related to the market under investigation. In the event a company receives a request for information from COFECE, a response to such request is required, otherwise, the company that fails to comply with the request may be subject to a fine.
  • COFECE has the authority to conduct dawn raids (unannounced on-site visits to a company’s offices, through which it may request information and/or copy documents related to the market under investigation). In these cases, it is recommended to contact the company’s legal department and seek immediate advice from a lawyer specialized in antitrust matters. Obstruction or failure to comply with orders during a dawn raid may result in fines and/or criminal penalties.
  • In some cases, COFECE considers it necessary to summon certain individuals if it presumes that such individuals may have knowledge of the market under investigation. These individuals may include any technical or managerial personnel of companies offering products and services related to the market. In the event COFECE summons any of your employees, it is recommended to consult with an antitrust attorney.

In more detail

  • The investigation should not be understood as a judgment, but as an action by the authority to verify compliance with the Federal Mexican Antitrust Law.

The term for this investigation is up to 120 business days, starting 10 December 2021 – the date of the initiation of the investigation, and can be extended up to four times.

1 DOF 13 July 2022, File No. IO-004-2021, Spanish

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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

Natalie Flores is currently the regional knowledge attorney for North America and Latin America in the Global Antitrust & Competition Group in the Firm's Mexico City Office. She has over ten years of experience as an attorney, and manages and executes regional and global legal content projects, training and client initiatives for the Competition Group within the context of the Firm's knowledge strategy across the region. Natalie oversees all regional knowledge for the antitrust and competition group for the Americas, including develop thought leadership, client training, and publications, amongst other antitrust initiatives for the region, and advises a diverse range of industry clients in multijurisdictional competition matters. She has experience in competition litigation, specifically class action. She is an active member of the Firm's various industry groups, with a focus in the Energy, Mining & Infrastructure group of Baker McKenzie. Natalie is on the Board for Mujeres en Energías Renovables (Women in Renewable Energy) en México (MERM), an association dedicated to promoting the development of women in renewable energy, and concentrates on advocating for renewables and the empowerment of women in the sector.

Author

Tania De la Luz-Sesmas is an Associate in Baker McKenzie, Mexico City office.

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