In brief
On 7 October 2022, the Investigative Authority of the Federal Economic Competition Commission (COFECE) published the notice of initiation of an investigation for alleged horizontal monopolistic practices, also known as cartel practices, which include agreements to manipulate prices, restricting supply, or coordinating bids in the market for the production, distribution, and commercialization of flat glass and products manufactured from flat glass in the national market.
Flat glass is mainly used to meet the needs of the architectural industry (such as glass for the interior or exterior of buildings), as well as the needs of the automotive industry (such as windshields, side windows, rear medallions, rear-view mirrors, among others).
This investigation applies to those economic agents and individuals who have collaborated, facilitated or induced these practices. Any companies found to have been involved in cartel practices could be subject to economic sanctions, and any individuals who participated in the execution or ordering of these types of agreements between competitors can be subject to criminal sanctions (up to 10 years of imprisonment).
Recommended action
- In this type of procedure it is normal for COFECE to request information and documents from the companies that offer products and services related to the investigated market. In the event, a company receives a request for information from COFECE, it is essential to respond to said request, otherwise if the company fails to comply, it may be subject to a fine.
- In some cases, COFECE considers it necessary to summon certain individuals, if it is presumed that said individuals may have knowledge of the practices under investigation or of the investigated market, for example, technical or managerial staff of companies that offer products and/or services related to the investigated market. In the event that COFECE summons any of your employees, it is recommended to consult with an antitrust & competition lawyer.
- COFECE has the authority to carry out verification visits, also known as “dawn raids” (unannounced on-site visits to the company’s offices, through which they can request information and/or copy documents related to the investigated market). In these cases, it is recommended to contact the company’s legal area, and seek immediate advice from a lawyer specialized in antitrust & competition matters. Obstruction or failure to comply with the authority’s order during a verification visit may result in fines and/or criminal sanctions.
Comments
- The investigation should not be understood as a prejudgment, but rather as an action by the authority to verify compliance with the Federal Economic Competition Law.
- Horizontal monopolistic practices are anti-competitive contracts, agreements, or arrangements between competing economic agents, among themselves, whose object or effect is price manipulation (“price-fixing”), restriction, limitation of supply or demand, division or segmentation of markets, manipulation or coordination of bids in tenders (“bid-rigging”), as well as the exchange of information between them to carry out any of the above behaviors.
- If the existence of an horizontal monopolistic practice is proven, the responsible economic agents may be subject to a fine of up to 10% of their annual income generated in Mexico. In addition, individuals who have participated in, or contributed to, such illegal conduct may be penalized in accordance with the Mexican Federal Criminal Code, and be imprisoned for up to 10 years.
- This investigation began on 7 June 2022 and the investigation period may last up to 120 business days, which will be counted from the date the investigation period began.
- Each investigation period has 120 business days, a term that can be extended up to four times for additional periods of 120 business days each.
Please do not hesitate to contact us if you would like to discuss how this investigation may affect your business operations in Mexico.