Amendments to Increase Competition in Mexico Become Law

11 05 2011
President Calderon signs the amendments to the Competition Law, Federal Penal Code and Tax Code

President Calderon signs the amendments to the Competition Law, Federal Penal Code and Tax Code

Mexico published an amendment to its competition law (Ley de Competencia Económica), the Federal Penal Code (Código Penal Federal) and the Fiscal Code (Código Fiscal de la Federación) that should that will give more tooth to the main regulatory agency, the Comisión Federal de Comptenecia (CFC) and increase penalties for corporations and individuals engaging in monopolistic or anticompetitive practices.

Among other changes, the amendments provide for Federal District and Appeals Courts  specialized in competence and anti-trust issues (article 39). These specialized tribunals are yet to be created, but is a positive step towards perfecting the system.

In recent years, the CFC has struggled to control a giant financial actor of the Mexican economy: Forbe’s purportedly richest man in the world, Carlos Slim and his realm of telecommunication companies: TELMEX, TELCEL and América Móvil SAB.

The Wall Street Journal reported this week what they saw as an unheard of triple challenge to Mr. Slim from the Mexican government:

  1. The Mexican Supreme Court (Suprema Corte de Justicia de la Nación) ruled last week that rulings of the CFC should be obeyed even in an appeal was pending or sub judice.
  2. The CFC fined Slim’s cell carrier in Mexico, TELCEL, with a $1 billion dollars fine.
  3. The final punch came via yesterday’s amendments.

Earlier this year, TELCEL/TELMEX started a press war with TV Azteca and Televisa, Mexico’s biggest television networks.

The modifications on the law seem positive. We will have to wait to see for their implementation and the delicate dance needed to execute with gargantuan actors as those involved in the current challenges to competence in Mexico.

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