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:
- Order the economic agent to eliminate the barriers that unduly affect the competition process;
- Issue recommendations to the corresponding regulatory authorities, in case there are legal provisions that unduly prevent or distort competition and free concurrence;
- Determine the existence of essential inputs, and, where appropriate, issue guidelines for their use/regulation; or
- 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.