What happened?
On December, 20 2024, the Executive Branch published in the Official Gazette the constitutional amendment to article 28 (the “Constitutional Amendment”) by which seven autonomous authorities, among them, the Federal Economic Competition Commission (“COFECE”) and the Federal Telecommunications Institute (“IFT”).
Pursuant to the Constitutional Amendment, the current functions that COFECE and IFT have (regarding competition matters) will be transferred to a new antitrust agency, decentralized from the Executive Branch, which will have legal status and its own budget, will be endowed with technical and operational independence in its decisions, organization, and operation, and the separation between the investigative authority and the one that resolves the proceedings will be guaranteed.
In terms of the Constitutional Amendment, the challenge of general rules, acts or omissions in competition matters will continue to be through an indirect constitutional trial (amparo)
and will not be subject to suspension: and in cases in which fines are imposed or the disincorporation of assets, rights, equity interests, or shares is ordered, these shall be executed once the constitutional trial is ruled.
What’s next?
Congress shall issue a new competition law or amend the current law, which considers the necessary modifications, including:
(i) the definition of the new competition agency’s governing body, including the criteria for the selection of its members; and
(ii) the definition as to whether the current legal concepts and processes will be maintained, including monopolistic practices, merger control thresholds, and special procedures such as barriers to entry and essential facilities, as well as its procedures, including electronic procedures, and its duration, and rules of contact with the agency.
When would this happen?
The Constitutional Amendment which refers to the new organization and legal nature of the new competition agency will become effective 180 days after the enactment of the new competition law or the amendment to the current law.
The Constitutional Amendment does not specified whether such term considers business or calendar days or the specific term for the Congress to enact the new competition law, or amend the current competition law. Therefore, as of today, the exact date on which COFECE and IFT will be extinguished is still unknown.
Although COFECE and IFT will continue to operate during this period, the Federal Expenditure Budget for 2025 provides a cut in their budget of approximately 70%, hence it is foreseeable a reduction in its personnel, as well as an increase in the time of their procedures.
What will happen to the current filings and procedures?
The acts issued by COFECE and IFT prior to their dissolution will continue to have legal effects and it is expected that ongoing proceedings at the time of their dissolution will continue its process by the new competition agency.
Considerations for the year 2025
Although the Constitutional Amendment decree has already been published, there is still uncertainty regarding the operation of the new competition agency, which as of today is expected to have a similar structure and functions to its predecessor (the Federal Competition Commission (Cofeco)).
However, unless the Congress enacts the secondary legislation before June and such legislation comes into effect almost immediately after its publication, COFECE and IFT will continue to operate throughout or almost throughout 2025.
If case of questions or comments, please do not hesitate to contact Francisco Fuentes, Carlos Orcí, and or Elian Avila Zataray
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