Mexico court rules on the enforcement authority of monopolistic practices

Recent rulings in Mexico’s antitrust enforcement landscape have clarified the limits of authority within the defunct Federal Economic Competition Commission (Commission). Specifically, the decisions address whether the Technical Secretary may impose sanctions for noncompliance with disqualification orders related to absolute monopolistic practices.

We provide a summary of the arguments and implications for future enforcement actions.

Background

Two company executives were sanctioned by Mexico’s Technical Secretary of the Federal Economic Competition Commission for allegedly failing to comply with a disqualification imposed for participating in an absolute monopolistic practice.

The Technical Secretary, ruling on a verification mechanism related to alleged absolute monopolistic practice in the liquefied petroleum gas market, found that the two executives had vacated their positions at the company after the deadline set by the Commission. Based on this delay, the Technical Secretary concluded that the executives had failed to comply with the disqualification imposed by the Commission's plenary and imposed daily fines as a penalty.

Arguments through amparo proceedings

Amparo proceedings were filed to challenge the fines imposed by the Technical Secretary, arguing that neither the Federal Economic Competition Law (LFCE) nor the Commission's Organic Statute (EO) granted the Technical Secretary authority to resolve incidental proceedings or sanction individuals for possible breaches of the LFCE.

Specifically, it was argued that the LFCE assigns the authority to resolve incidental proceedings and impose sanctions to the plenary, and that those powers had not been delegated to the Technical Secretary. Thus, no provision within the legal system – including the LFCE, EO, or any delegatory agreement – authorizes the Technical Secretary to impose sanctions.

Outcome of the amparo proceedings

The allegations of violation in the amparo petitions were upheld. In a landmark decision, it was ruled that the Technical Secretary lacked the authority to impose fines. The respective rulings clarified that, under the terms of the LFCE, the plenary session of the Commission is the competent authority to impose sanctions. Accordingly, the fines imposed by the technical secretary for an alleged breach of disqualification related to monopolistic practices were declared invalid.

This precedent is will likely influence the distribution of authority within the legal framework of the new Antitrust National Commission, particularly as new authority is expected to have a Technical Secretary with similar powers.

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