MEXICO Trends and Developments Contributed by: Fernando Carreño, Sergio López, Carlos Cevallos and Dolores Jiménez, Von Wobeser y Sierra, SC
The 2024 reform: disbanding autonomous regulators and shifting the paradigm In December 2024, a new constitutional reform, championed by former President Andrés Manuel López Obrador, dismantled COFECE and the IFT as independent regulators. Instead, their func - tions will be absorbed by a new government- dependent body lacking constitutional autono - my. Officially, this reform was justified under the banner of austerity and streamlining government operations. However, critics argue that the move was politically motivated, given COFECE’s his - tory of resisting policies that distorted competi - tion, including key energy reforms of President López Obrador. The elimination of an autonomous antitrust watchdog represents a significant paradigm shift, raising concerns among domestic and international observers about the future of mar- ket fairness and the robustness of cartel enforce - ment in Mexico. This move fundamentally alters the institutional landscape and creates a context where the design and operation of the new com - petition authority become even more critical. President Sheinbaum’s LFCE Reform Initiative: defining the new legal framework It is important to clarify that President Shein - baum’s initiative to amend the LFCE is not a parallel development separate from the 2024 constitutional reform. Rather, the constitution - al reform, which eliminated COFECE and IFT, necessitates changes to the secondary legisla - tion, namely the LFCE, to align it with the new institutional structure. In this context, President Sheinbaum has pro - posed specific amendments to the LFCE. While the constitutional reform mandates the legislative changes, it provides broad scope, leaving many key details to be defined in the
1992, marked Mexico’s first serious attempt to create a modern antitrust framework. While lacking constitutional autonomous sta - tus, this initial authority developed considerable technical capacity and de facto independence from the Executive Branch over its two-decade existence, initiating important, albeit some - times limited, actions against cartel behaviour in key industries. However, its efforts were often hampered by limitations in its legal powers and budgetary constraints, leaving significant gaps in the effective prosecution and deterrence of sophisticated cartel operations. The landmark 2013 constitutional reform rep - resented a major institutional advancement, establishing two seemingly empowered and autonomous antitrust regulatory bodies: the IFT for the specific and crucial sectors of telecom - munications and broadcasting and COFECE as an antitrust authority for all other sectors of the Mexican economy. This grant of constitutional autonomy was intended to provide the neces - sary insulation from external pressures and ensure consistent enforcement. Indeed, both COFECE and IFT developed con - siderable expertise and achieved some notable successes in investigating and sanctioning anti- competitive conduct, including cartel behaviour. However, even under this enhanced institution - al framework, significant challenges persisted in effectively tackling the deeply entrenched nature of cartels in various sectors. This his - tory of both progress and persistent limitations underscores the critical need for a thorough and honest assessment of what worked and what did not under the previous legal and institutional arrangements before embarking on a wholesale reform.
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