Wednesday, September 26, 2007
Amendments to the Mexico' Law of Economic Competition and the Economics of the Anticompetitive Use of Monopolistic Practices Lawsuits
Posted by D. Daniel Sokol
Ramiro Tovar Landa of Instituto Tecnológico Autónomo de México (ITAM) has an informative new working paper concerning Mexico's competition law system Amendments to the Mexico' Law of Economic Competition and the Economics of the Anticompetitive Use of Monopolistic Practices Lawsuits.
ABSTRACT: One of the main characteristics of the amendments to the Federal Law of Economic Competition (LFCE, as per its abbreviation in Spanish) is that it includes, in explicit manner, several unilateral conducts of the economic agents, broadening the catalogue of relative monopolist practice. Some of these practices were only established in the LFCE Regulations or Guidelines and, as such low legal ranking level, the sanctioning capacity was obstructed by unconstitutionality in its application. Now, at statute level, there is a broad array of practices that are easily seen in markets and that, generally, have an economic justification since they generate efficiencies in the competition process. There is consensus that the existence or magnitude of such efficiencies are not conditioned to the fact that the agent that carries them out has or does not have substantial market power. Consequently, the analysis needed to distinguish between practices that have an anticompetitive effect, from those which have a pro-competitive effect is complex and, therefore, are subject to error. In this case, the Mexican Federal Competition Commission (CFC, as per its abbreviation in Spanish) operates as a regulator and, like any other regulator; it operates with inherently imperfect information.