In an unprecedented action, this month the Investigation Bureau of the Mexican Federal Competition Commission (COFECE) has brought criminal prosecutions against individuals who allegedly participated in bid rigging activities in Mexico between 2009 and 2015. This is the first criminal action COFECE has brought and is a direct result of the revisions to Mexico's competition laws in 2014, which enhanced COFECE's enforcement powers.
According to COFECE, a number of bidders coordinated their participation in public tenders related to the health sector of Mexico. The conduct purportedly affected in more than $1,200 million Mexican pesos ($58.7 million dollars) worth of purchases made by the Mexican Government. While the details are confidential, COFECE has recently investigated several industries within the healthcare sector including latex products, industrial oxygen, medicine distribution, and blood banks/laboratory testing.
Under Mexican law, bid rigging, price fixing, and similar horizontal collusion are considered absolute monopolistic practices, analogous to actions that would be per se illegal under U.S. antitrust laws. Absolute monopolistic practices are punished severely. Guilty parties face fines up to 10% of their income, and individuals who directly participate could also receive up to 10 years in prison and a ban on holding management positions in any company for up to 5 years.
First enacted in 1993, Mexican competition law underwent several amendments to improve antitrust enforcement. Most importantly, as part of a series of constitutional reforms in 2013, two autonomous competition authorities were created: the Federal Telecommunications Institute (IFETEL), entrusted with competition policy and enforcement for telecommunication and broadcasting sectors, and COFECE, in charge of competition law enforcement in all other sectors of the economy. In 2014, the Mexican Congress enacted a new competition law, which preserved the main aspects of...