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Mexico: COFECE investigates the national market for federal passenger transport

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In brief

30 June 2022, the Investigative Authority of the Federal Economic Competition Commission (COFECE) published notice1 of the initiation of an investigation into the national market for federal passenger transport (“Market under Investigation“). The investigation is to identify, and where appropriate, determine, the existence of barriers to competition and free competition, and/or essential inputs in the Market under Investigation, which utilize terminals for passenger pick-up and drop-off, and related services.

According to the 2020 Basic Statistics of the Ministry of Infrastructure, Communications and Transport (SICT), 95.2% of the passengers mobilized by means of transportation in 2020 did so through federal land transport (with the exception of rail and tourist transport by land). For this reason, among others, COFECE highlighted the importance of the Market under Investigation. According to the Commission, the federal passenger transport service is essential for the mobility of the population in Mexico and has a transversal impact on other areas of the economy.

In more detail

The investigation of the Market under Investigation is aligned with the Strategic Plan 2022 to 2025 of COFECE2, which establishes that the transport sector is very relevant for Mexico, for which it has carried out various actions to strengthen competition in related markets for the benefit of the economy and the population, and therefore it is one of the priority sectors for the Commission.

The objective of the investigation is to identify whether there are any barriers to competition and/or essential inputs in the Market under Investigation. An essential input is an item or infrastructure that is indispensable for the provision of certain goods and/or services. In addition, it has the characteristic of being essential, so preventing access to the essential input can produce anti-competitive effects and create inefficiencies in the investigated market, such as: preventing access to competitors, limiting their ability to compete, creating barriers to competition in the market, and/or distorting the process of free competition, among others.

Once the process for this type of investigation has been concluded, if elements are found to determine the existence of barriers to competition and/or essential inputs, the Plenary of COFECE may:

  1. Order the economic agent to eliminate the barriers that unduly affect the competition process;
  2. Issue recommendations to the corresponding regulatory authorities, in case there are legal provisions that unduly prevent or distort competition and free concurrence;
  3. Determine the existence of essential inputs, and, where appropriate, issue guidelines for their use/regulation; or
  4. Order the divestiture of assets, rights, partnership interests, or shares of the economic agent involved, when other corrective measures are not adequate to resolve the restriction to competition.

1 DOF 30 June 2022

2 COFECE Strategic Plan 2022 to 2025

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Author

Raymundo Enriquez is currently the managing partner of the Mexico offices and the lead partner of Baker McKenzie's Antitrust Practice Group in Mexico City. He was a member of the Firm’s Executive Committee and a previous chairman of the Latin America Regional Council where he also served as the Latin America chair of the Global Diversity and Regional Pro Bono Committees. Mr. Enriquez is recognized as a leading lawyer for competition / antitrust and for business by Chambers Latin America. He served as a board member for several Mexico companies. In addition, he was a visiting lecturer at the Mexican Bar Association and a part-time tax and foreign trade law professor at Universidad Iberoamericana, where he obtained his JD from the university’s School of Law.

Author

Luis Amado is a partner in the Antitrust & Competition Practice Group of the Firm's Mexico City office. He has more than 10 years of experience in his field and has conducted several antitrust and competition seminars for the telecommunications, automotive, electronics, medical, mining, metal, home appliance and white goods industries. Luis was part of the Firm’s EU Competition & Trade Practice Group in London, where he advised on antitrust matters. He was appointed Latin America's representative in the Firm committee responsible for abuse of dominance matters. He has also been a guest professor at Universidad Iberoamericana and IPADE, giving lectures on antitrust and competition.

Author

Alina de la Luz is an associate in the Firm's Antitrust Practice Group in Mexico. Prior to joining the Antitrust Practice Group at the Firm, she was part of the Mexican competition authority (Federal Economic Competition Commission), as part of the investigating authority. With more than 8 years of experience in economic competition, mainly in abuse of dominance and analysis of competition conditions, she has conducted investigations in several markets: financial, energy, ports, digital, telecommunications, and transportation, among others. Likewise, she was head of the economic competition subject at UNAM and has taught about competition in several forums.

Author

Natalie Flores is currently the regional knowledge attorney for North America and Latin America in the Global Antitrust & Competition Group in the Firm's Mexico City Office. She has over ten years of experience as an attorney, and manages and executes regional and global legal content projects, training and client initiatives for the Competition Group within the context of the Firm's knowledge strategy across the region. Natalie oversees all regional knowledge for the antitrust and competition group for the Americas, including develop thought leadership, client training, and publications, amongst other antitrust initiatives for the region, and advises a diverse range of industry clients in multijurisdictional competition matters. She has experience in competition litigation, specifically class action. She is an active member of the Firm's various industry groups, with a focus in the Energy, Mining & Infrastructure group of Baker McKenzie. Natalie is on the Board for Mujeres en Energías Renovables (Women in Renewable Energy) en México (MERM), an association dedicated to promoting the development of women in renewable energy, and concentrates on advocating for renewables and the empowerment of women in the sector.

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