Extraordinary measures are being taken by companies and governmental authorities to avoid aggravating the current situation and adapt quickly to the new operational and regulatory challenges arising from the COVID-19 pandemic. Nonetheless, economic competition law is still in force. This article discusses a series of considerations that companies should keep in mind to prevent potential competition risks relating to their behaviour or practices during the pandemic.
The Federal Economic Competition Commission's (COFECE's) board of commissioners recently fined two polyethylene glove providers for price fixing and bid rigging in the health sector. According to COFECE's resolution, the lack of competition in the bids for polyethylene gloves prevented lower acquisition prices, which affected the Mexican budget by approximately Ps42.28 million (approximately $1.7 million).
The Federal Telecommunications Institute (IFT) has exclusive jurisdiction over cases, procurement and advocacy in competition matters relating to the broadcasting and telecoms sectors, while the Federal Economic Competition Commission (COFECE) has jurisdiction in competition matters regarding all other sectors. While this allocation of jurisdiction between the IFT and the COFECE may appear straightforward, in reality, there is no clear-cut division of powers with regard to digital markets.
In Mexico, some public institutions consolidate the procurement requirements of their entities into one public tender to save costs and increase efficiency. As such, joint propositions among competitors may be the solution for companies that wish to participate in such processes where they involve substantial volumes of goods. However, there are no official guidelines or criteria on how joint propositions between competitors should be negotiated or implemented so that they do not pose a risk to competition.
The Federal Economic Competition Commission (COFECE) recently issued a press release announcing that it had rejected Walmart's proposal to acquire Cornershop in light of the potential risks that it posed to competition and free market access. This case is significant as it is the first merger review case in which the COFECE has analysed vertical concentrations involving digital platforms.