New Antitrust Proposal: Stronger Enforcement, Higher Fines

President Claudia Sheinbaum has introduced a new reform to the Federal Economic Competition Law (LFCE). The proposal, now before the Senate, seeks to impose tougher fines, accelerate investigations, and replace autonomous regulatory bodies with centralized agencies under federal control.

"Mexico is a country where, for decades, businesses and large capital interests dictated the conditions under which the economy would develop,” reads the initiative’s explanatory memorandum, dated April 24 and signed by Sheinbaum. “In this new phase of national development, it is crucial to correct the power abuses that had become the norm, driven by groups focused solely on their self-interest, at the expense of the well-being of the Mexican people.”

This initiative aligns with the constitutional reform passed in December 2024, which eliminates several autonomous bodies, transferring their responsibilities to new entities within the federal public administration. President Sheinbaum urges Congress to pass both the new LFCE and the proposed Federal Telecommunications and Broadcasting Law before the legislative session ends on April 30.

Sharper Penalties and Streamlined Investigations

One of the most significant changes is the increase in fines: up to 20% of revenue for firms engaged in absolute monopolistic practices and up to 15% for relative monopolistic practices. Under the current law, reformed in 2014, these figures stand at 10% and 7%, respectively. Illicit concentration activities and non-compliance with merger conditions would also face fines of up to 15%, more than double the current 7% cap.

The proposal also reduces the investigation period for monopolistic practices from five to four 120-day terms and introduces steep penalties, up to 200,000 Units of Measure and Update (UMA), for obstructing inspections.

In an expansion of regulatory reach, the reform extends the window for reviewing anti-competitive effects from previously non-notifiable concentrations from one to three years after their execution.

Creation of the National Antimonopoly Commission (CNA)

Central to the reform is the creation of the CNA, a new body under the Ministry of Economy that will replace COFECE. While technically decentralized and operationally independent, the CNA will have a reduced governing board, five commissioners instead of seven, appointed by the Executive and ratified by the Senate for staggered seven-year terms. The CNA will inherit COFECE’s key functions, including the division between investigative and decision-making authorities.

The proposed law will not apply to state-owned enterprises in strategic sectors, such as PEMEX and CFE. These companies would be immune from investigation or penalties related to abuses of market dominance, consistent with an earlier constitutional reform passed in October 2024.

In the telecommunications and broadcasting sectors, the CNA would also take over competition oversight, including the authority to declare market preponderance when an entity holds more than 50% of market share. Meanwhile, the new Digital Transformation and Telecommunications Agency (ATDT) would handle asymmetric regulation, enforcement, and penalties.

Until the CNA is fully established, COFECE will continue to operate under existing regulations. The reform guarantees continuity by retaining the head of the Investigative Authority and transferring COFECE personnel to the new commission.