MEXICO Trends and Developments Contributed by: Fernando Carreño, Sergio López, Carlos Cevallos and Dolores Jiménez, Von Wobeser y Sierra, SC
Constitutional Reform and the Draft Amendments to the Mexican Competition Law: A Comprehensive Analysis of Institutional Transformation and its Ramifications for Cartel Enforcement Introduction: a watershed moment for Mexican competition policy and the intensified battle against cartels, potentially adrift without a clear compass The 2024 constitutional reform, which disman - tled Mexico’s Federal Economic Competition Commission (COFECE) and the Federal Tel - ecommunications Institute (IFT), represents a monumental institutional upheaval in the nation’s economic governance, carrying profound impli - cations for the state’s capacity to effectively combat the deeply damaging issue of cartels. This fundamental structural change, mandat - ed by constitutional amendment, fundamen - tally alters the landscape of competition policy enforcement in North America’s second-largest economy, particularly concerning the investiga - tion, prosecution, and deterrence of sophisticat - ed and often deeply entrenched anti-competitive agreements, most notably cartels. While this reform necessitates the creation of a new, unified regulatory body, a critical concern arises that the subsequent legislative initiatives, particularly those focused on amending the com - petition law, appear to be proceeding without a sufficiently rigorous and publicly debated diag - nostic foundation regarding the successes and, more importantly, the limitations of the existing legal framework in tackling cartel behaviour. This absence of a clear and comprehensive analysis casts a shadow of uncertainty over the potential effectiveness of the proposed changes, even as they introduce significant alterations to the legal landscape, including revised treatments of infor - mation exchange and leniency programmes.
This transition period, therefore, not only cre - ates substantial uncertainty for market partici - pants, regulatory stakeholders, and internation - al observers but also raises serious questions about the evidence-based nature of the pro - posed reforms. The initiative to overhaul the competition law, while ostensibly ordered by the constitutional changes, gives the legislature broad discretion to completely rewrite the rules of the game. However, a significant apprehension is that this extensive revision is not being guided by a trans - parent and robust diagnosis of what has worked well and what has fallen short under the cur - rent legal regime, especially in the crucial area of cartel deterrence and enforcement. This lack of a clear analytical underpinning risks lead - ing to reforms that are not precisely targeted at addressing the root causes of past failures, potentially undermining their ultimate effective - ness in the fight against cartels, despite intro - ducing seemingly impactful changes like signifi - cantly increased sanctions and altered leniency rules. Historical context: the evolution of competition institutions in Mexico and the protracted struggle against cartels, marked by unfulfilled potential To fully appreciate the new institutional frame - work for competition policy following the 2024 constitutional reform and to critically evaluate the rationale behind the proposed presidential initiative to amend the Federal Economic Com - petition Law (LFCE), it is essential to understand the institutional evolution of Mexican competi - tion policy and its historical struggles against anti-competitive collusion, particularly the per - sistent challenge posed by cartels. The original Federal Competition Commission, established in
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