COFECE penalises cartel in public procurement for health sector: integral services for laboratory studies and blood bank
In April 2016 the Federal Economic Competition Commission (COFECE) Investigative Authority initiated an
investigation for the probable commission of absolute monopolistic practices in the market of integral services
for laboratory studies and blood bank.(1) The investigation derived from a complaint filed by the Mexican
Institute of Social Security (IMSS), which became aware of a potential agreement between integrators to divide
among themselves the regions and packages for public tenders that IMSS had issued in 2015.
Amendment to the Mexican Procurement Law and its impact on competition matters
The Mexican Procurement Law (“LAASSP” by its Spanish acronym) establishes that, by general rule, all governmental acquisitions of goods and services must be procured through public tenders. Only in exceptional situations, it shall be allowed to do said acquisitions through a direct award or a tender restricted by invitation. Nonetheless, according to the LAASSP, public tenders may have three different scopes: (i) national, in which only Mexican suppliers or those which offer goods or services with at least 50% of national content are able to participate; (ii) international under the coverage of treaties, aimed both for national suppliers and foreign ones that belong to a country that has a free trade agreement celebrated with Mexico; and (ii) open international, where national and foreign suppliers may participate regardless of their nationality. In principle, governmental agencies and entities shall prefer a national public tender and only in cases in which it is declared void or other exceptional situations, the scope of the public tender may be broadened by general rule, all governmental acquisitions of goods and services must be
procured through public tenders. Only in exceptional situations, it shall be allowed
to do said acquisitions through a direct award or a tender restricted by invitation.
Nonetheless, according to the LAASSP, public tenders may have three different
scopes: (i) national, in which only Mexican suppliers or those which offer goods or
services with at least 50% of national content are able to participate; (ii)
international under the coverage of treaties, aimed both for national suppliers and
foreign ones that belong to a country that has a free trade agreement celebrated
with Mexico; and (ii) open international, where national and foreign suppliers may
participate regardless of their nationality. In principle, governmental agencies and
entities shall prefer a national public tender and only in cases in which it is
declared void or other exceptional situations, the scope of the public tender may
be broadened
Three for one: austerity initiative to blend regulatory and antitrust institutions
Reform initiative
On 10 June 2020 Senator Ricardo Monreal of the National Regeneration Party (MORENA)(1)
presented a reform initiative to amend Articles 27 and 28 of the Constitution. Through this reform,
Monreal proposed to join (and extinguish) three state organs which he believes share certain powers
and competencies namely, the Federal Economic Competition Commission (COFECE), the Federal
Telecommunications Institute (IFT) and the Energy Regulatory Commission (CRE). The resulting
organ would be the National Institute of Markets and Competition for Welfare (INMECOB).
COFECE deemed to have jurisdiction to review Uber-Cornershop merger
In Mexico, jurisdiction over competition and antitrust cases is divided between the Federal
Economic Competition Commission (COFECE) and the Federal Telecommunications Institute (IFT).
The IFT has jurisdiction in the broadcasting and telecoms sectors, while COFECE oversees all other
sectors.
COVID-19 pandemic: economic competition considerations
Introduction
As the COVID-19 pandemic develops and society and governments respond to it, the restrictions
imposed to contain the spread of the virus are having adverse economic effects. On one hand, these
restrictions may discourage the investment of capital and the development of new projects; on the
other hand, they will also lead to significant losses for many businesses.
Competition considerations between entities of same corporate group during bidding process
COFECE investigation
In September 2014 the Federal Economic Competition Commission (COFECE) investigative authority launched an investigation into two polyethylene glove providers for absolute monopolistic practices relating to the Mexican Social Security Institute’s acquisition of polyethylene healing materials (specifically, gloves).
COFECE rejects Walmart’s acquisition of Cornershop
On 5 June 2019 the Federal Economic Competition Commission (COFECE) issued a press release
announcing that it had rejected Wal-Mart International Holdings, Inc’s (Walmart’s) proposal to
acquire Delivery Technologies, S de RL de CV (Cornershop).
According to the press release, the COFECE rejected the acquisition in light of the potential risks that
it posed to competition and free market access.
COFECE amends recommendations to foster competition in gasoline and diesel markets
Following the 2013 constitutional energy amendment, the Mexican energy market became a competitive market that allowed private in vestment. In addition, the Hydrocarbon Law, which was issued in January 2015, allows third parties which are unrelated to the state-owned enterprise Petroleos Mexicanos (Pemex) to sell gasoline and diesel. In light of these developments, in 2016 the Mexican Federal Economic Competition Commission (COFECE) issued a series of recommendations aimed at fostering competition in the gasoline and diesel markets.
COFECE approves commitments to restore competition in pharmaceutical market
In August 2015 the Federal Economic Competition Commission (COFECE) approved a concentration
between Dutch fund Moench Coöperatif, UA and one of the major pharmaceutical product
distributors in Mexico, Marzam, through which the former acquired control over the latter. The
concentration was approved without commitments, as the COFECE was advised that Moench
Coöperatif did not participate in the same market as Marzam and thus that there was no overlap
between the agents involved.
FECC issues Competition Agenda for Public Procurement
On 17 July 2018 the Federal Competition Commission (FECC) issued its Competition Agenda for
Public Procurement, in which it presented its findings regarding competition issues that arise during
the public procurement process. In the agenda, the FECC also proposed certain courses of action
(both administrative and legislative) to promote effective competition in public procurement.
