MEXICO Law and Practice Contributed by: Christian Lippert, Carlos Chávez, Juan Carlos Burgos and Édgar Martín, Galicia Abogados
access to essential facilities is limited by the transac - tion. To assess the foregoing, the CNA defines one or more relevant markets pursuant to standard economic anal - ysis tools and weighs the potential anti-competitive and pro-competitive effects of the transaction in such markets. 4.2 Markets Affected by a Transaction After having defined the relevant markets and the par - ticipants therein and their respective market shares, the CNA assesses the concentration of each relevant market. As in other jurisdictions, the CNA looks at the Herfindahl–Hirschman Index (HHI) prior to the trans - action and after giving effect to the same. While HHI is one among several factors that the CNA considers when reviewing a transaction, under CNA criteria a concentration is deemed to have low prob - abilities of foreclosing competition when it yields: • an increase in HHI of less than 100; • a post-transaction HHI of less than 2,000; or • a post-transaction HHI between 2,000 and 2,500 provided that (a) the increase in HHI is between 100 and 150, and (b) the resulting entity is not among the top four players (per market shares). If none of the aforementioned criteria are met, a closer look at market structure and potential effects in the relevant and related markets is conducted. 4.3 Reliance on Case Law The CNA does take into consideration precedents from the USA and the European Commission, espe - cially when a particular market has not been analysed by it. 4.4 Competition Concerns The starting point of the analysis of competition con - cerns is market concentration and thus whether the transaction could grant or strengthen market power. The CNA, however, also looks into whether the pro - posed transaction could facilitate co-ordinated effects (collusion), especially in already concentrated mar - kets.
Depending on the industries and markets concerned, the CNA also looks at other concerns such as verti - cal effects and portfolio effects. Recently, the CNA has been especially focused on potential overlaps or effects not only at the level of the parties but also above them, and thus requesting extensive disclo - sure of shareholders and investors (typically, investors owning a 5% or greater ordinary interest or a 20% or greater passive interest) and their respective invest - ments in Mexico (especially in the relevant and related markets). 4.5 Economic Efficiencies While the CNA is statutorily required to look into effi - ciencies and weigh the same against potential anti- competitive effects, the CNA holds efficiencies to a high standard of proof and only considers those that can actually be demonstrated by the parties. Theoreti - cal efficiencies as well as intra-firm efficiencies rarely The CNA does not have statutory authority to consider any issue beyond competition. As the CNA is now a body within the Ministry of Economy (although it technically has autonomy), it could be the case that its practice and precedents move in the direction of considering other factors such as employment or economic policy, among others, but at time of writing there is no clear indication in that regard. carry weight in the CNA’s analysis. 4.6 Non-Competition Issues 4.7 Special Consideration for Joint Ventures There is no special consideration for joint ventures, as noted above. Having said that, as the CNA is required to look into potential facilitation of co-ordi - nation, the review of joint ventures usually includes a special focus on the nature of the parties thereto and whether there could be co-ordination or vertical issues between them in the relevant market or even outside of the scope of the joint venture.
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