MEXICO LAW AND PRACTICE Contributed by: Fernando Carreño, Sergio López, Michel Llorens, Andoni Garza and María García, Von Wobeser y Sierra
4.4 Competition Concerns The competition concerns investigated by the authorities include unilateral effects, co-ordi - nated effects, conglomerate or portfolio effects, vertical concerns, and the elimination of poten - tial competition. However, their main assess - ments concern unilateral and vertical effects, as well as the elimination of potential competition. 4.5 Economic Efficiencies Pursuant to competition law, economic efficien - cies can be argued by the parties and studied by the authorities. Ultimately, the authority can rule whether the economic efficiencies derived from a transaction compensate for the potential competition risks – although there are no clear criteria according to which the Mexican authori - ties should carry out their assessment. In any case, it is up to the parties to demonstrate that such economic efficiencies exceed the competi - tion risks. 4.6 Non-Competition Issues The review process carried out must be related only to competition issues and the criteria out - lined in the law for such assessments. However, lately the Authority has started conducting a deeper and more thorough analysis of the non- compete provisions in the transaction docu - ments. There are rules for foreign direct investment; however, these are separate from the compe - tition regulations and the merger control rules. There are specific filings required for foreign direct investments in certain scenarios, but this is a different procedure before a different author - ity – namely, the Ministry of Economy.
4.7 Special Consideration for Joint Ventures The legal thresholds established to determine whether a transaction must be notified and cleared by the competition authorities are not structured in a fashion that applies directly to joint ventures. The competition authorities have nonetheless issued guidelines on how to deter - mine whether joint ventures require a pre-merger filing. When joint ventures are analysed by the competition authorities, one of the main pri - orities is to examine the possible co-ordination between the joint venture partners. 5. Decision: Prohibitions and Remedies 5.1 Authorities’ Ability to Prohibit or Interfere With Transactions The authorities can prohibit the execution of a transaction; however, they must first evidence that the transaction presents a risk to the com - petition process in the market(s). When issuing a resolution on the parties’ proposed transaction, the authorities may either clear the transaction, clear the transaction subject to remedies, or pro - hibit the transaction. 5.2 Parties’ Ability to Negotiate Remedies When the authorities have concerns about a transaction, the parties are allowed to offer and negotiate both structural and behavioural rem - edies, as well as amendments to the initial terms of the proposed transaction. Typically, the authorities prefer structural rem - edies, rather than behavioural – particularly in transactions with horizontal overlaps. The authorities are usually reluctant to accept
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