MEXICO Law and Practice Contributed by: Luis Álvarez Cervantes, Adolfo Athié Cervantes, Alejandro Barrera, Jesús Colunga, Eduardo Kleinberg, Juan José López de Silanes, Carlos Martínez-Betanzos and Amílcar Peredo, Basham, Ringe y Correa S.C.
ticipating in public procurement processes for up to five years. Leniency Programme Mexico’s leniency programme allows any participant to voluntarily disclose its involvement in an absolute monopolistic practice in exchange for significant ben - efits, including reduced fines, immunity from criminal prosecution, protection against disqualification sanc - tions, and exemption from collective legal actions brought by the CNA. Applicants must cease participa - tion immediately and fully assist the CNA throughout the case. The first applicant providing sufficient evidence before the investigation formally begins may receive the minimum fine (as low as USD19), while subsequent applicants filing before the third extension can obtain reductions of 50%, 30% or 20%, depending on their order. All successful applicants are granted full immu - nity from criminal prosecution, disqualification sanc -
A company is deemed to have substantial mar - ket power when it can unilaterally influence market conditions in a relevant market, by setting prices or restricting supply, without facing effective competitive constraints. Relevant Market Defining the relevant market requires considering both product and geographic dimensions. The product market covers goods or services that consumers see as interchangeable based on features, price and use, while the geographic market identifies the area where these substitutes are offered under comparable price and access conditions. Types of Conduct Deemed as Abuse of Dominance Restricted practices include exclusive dealing or dis - tribution arrangements, resale price maintenance, tying, exclusive supply obligations, refusals to deal, collective boycotts, predatory pricing, loyalty rebates, cross-subsidisation, unjustified price discrimination, denial of access to essential inputs, margin squeezes, and raising rivals’ costs or foreclosing competition. Sanctions The CNA may impose fines of up to 10% of the eco - nomic agent’s revenues, as well as any measures necessary to eliminate or remedy the anti-competitive conduct. Remedies When a company with substantial market power engages in unilateral conduct that violates antitrust laws, the CNA can impose behavioural or structural remedies to restore competition and prevent future infringements. The LFCE also allows companies under investigation for abuse of dominance to offer voluntary remedies, known as Commitments, to address the concerns identified by the Investigative Authority. Commitments are designed to cease or correct the conduct and can significantly reduce fines. They may be submit - ted during the investigation phase, where viable com - mitments can lead to a full fine reduction and even closure of the case without liability, or during the trial- like stage, where acknowledging the infringement may result in up to a 50% fine reduction.
tions and collective civil actions. Jurisdiction and Effects Doctrine
Although not frequently invoked, the CNA may apply an effects-based standard, asserting jurisdiction over cartel conduct regardless of where it occurs. Practices carried out within or outside Mexico can fall under its authority when they produce, or can produce, actual
or potential effects in Mexican markets. 6.4 Abuse of Dominant Position
The LFCE prohibits abuses of dominance, also known as relative monopolistic practices. These provisions apply to unilateral behaviour by one or more eco - nomic agents with substantial market power that has the object or effect of unduly displacing competitors, impeding their access to the market, establishing exclusive advantages or unduly restricting the ability
of other economic agents to compete. Determining Dominance in Mexico
Holding a dominant position is not in itself illegal. It is the abuse of that dominant position that is prohib - ited. The CNA determines whether a company holds a dominant position – referred to as substantial market power – through a structured, case-specific analysis.
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