MEXICO Law and Practice Contributed by: Christian Lippert, Carlos Chávez, Juan Carlos Burgos and Édgar Martín, Galicia Abogados
Under the FCA, the CNA must issue a decision within 30 business days (extendable in complex cases for an additional 20 business days) after staff confirm that all information requests have been satisfied. Because the CNA controls the date on which the clock actually starts ticking, the maximum statutory timeframe has limited value. It should be noted, however, that if the CNA fails to enter a decision within such timeframe, it is constructively deemed that it does not object to the notified transaction. In practice, filings with no overlaps and that do not raise competition concerns are usually cleared within eight to 12 weeks after an application is submitted; filings with moderate overlaps or non-critical concerns are usually cleared within four to six months; and fil - ings where significant overlaps or competition con - cerns exist can take anywhere between six and 12 months (and even more in cases where remedies are offered) before a decision is rendered. 3.8 Pre-Notification Discussions With Authorities The parties are free to engage in discussions with the agencies but, other than giving guidance on specific questions, staff will likely only engage in substantive discussions until after a filing is made. Accordingly, courtesy meetings are customary but not pre-notifi - cation discussions. 3.9 Requests for Information During the Review Process RFIs have steadily grown in length and complexity in Mexico over the past few years. Parties to a filing in Mexico almost always (north of 90% of the time) receive an RFI. Most filings will only require standard information (organisational documents, financial information) and a customary back and forth with staff to answer ques - tions and provide clarification on the information sub - mitted with the application. On average, however, a quarter of all applicants will receive a second RFI, the scope and length of which are usually broader and longer than the first one.
Because the FCA features a maximum timeframe within which the competition authority must render a decision in merger control cases, which only starts after a filing has been perfected (ie, all RFIs have been satisfied and the agency has granted formal accept - ance of the filing), responding to RFIs usually takes quite some time as formal requests are customarily followed by informal requests (which staff view as clarifications of submitted information). This exercise usually forces the applicants to ask for extensions to allow staff to continue their review and avoid the risk Under the FCA, a short-form filing (which could reduce the maximum decision time to 15 business days after the CNA accepts it) is available to the extent that it can be established that it is evident that the relevant trans- action will not have an anti-competitive effect in the relevant market. Historically, however, the agencies have applied this threshold strictly. Thus, a short-form filing is generally only available when (i) the notified transaction does not result in overlapping (note that potential competitors may also be considered to over - lap with the target) or (ii) the transaction’s only effect is to increase the ownership interest of a person who already owns a controlling interest in the target entity. To the extent that this cannot be established, a long- form notice is required. of having the filing dismissed. 3.10 Accelerated Procedure Because there is a high risk that the CNA takes the position that the parties cannot meet the aforemen - tioned standard and requires that a long-form filing be made, this abbreviated procedure has little practical use.
4. Substance of the Review 4.1 Substantive Test
The substantive test applied by the CNA to determine whether a transaction should be approved or not is whether the resulting agent will have the ability to increase prices without being countered by competi - tors, whether because the transaction confers market power to the resulting agent (or increases the power it already had), because barriers to competition are cre - ated or strengthened by the transaction, or because
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