By Dow Jones Business News,
February 19, 2014, 05:09:00 PM EDT
By Anthony Harrup
MEXICO CITY--Mexican President Enrique Peña Nieto submitted to Congress Wednesday a proposed new competition
law that gives antitrust authorities greater powers to ensure competition in the $1.2 trillion economy.
The bill follows constitutional amendments made last year that created a new, revamped antitrust commission and a
new telecommunications regulatory body in an effort to improve competition, spur economic growth and boost job creation.
"A little more than 20 years after the federal competition law was passed, it's evident that it hasn't been
sufficient to ensure healthy competition in our economy," Economy Minister Ildefonso Guajardo said at a news conference.
The official cited a study by Mexico and the Organization for Economic Cooperation and Development showing that 30%
of household spending in Mexico is carried out in markets with competition problems, and that people spend on average
40% more in those markets than they would if there were adequate competition.
The proposed new law confirms the amounts companies can be fined for certain anticompetitive practices, which were
raised in 2011, while removing legal obstacles that made forced asset sales and criminal charges for certain offenses
virtually impossible to put into practice, the official said.
Mr. Guajardo denied that under the proposed new law, the government could return to the kind of broad price
controls that were common in the 1970s. The bill only allows for price caps to be decreed in the event the antitrust
commission determines there are competitive problems in a particular market. That possibility is already in the existing
law, and there's "nothing to indicate a return to undesirable practices of direct or discretionary price controls by the
government," he added.
The constitutional changes carried out last year moved the responsibility for antitrust issues in
telecommunications and broadcasting to the new Federal Telecommunications Institute, while giving the Federal Economic
Competition Commission new powers to act in other areas. Separate laws that will guide the application of the
telecommunications overhaul are expected to be submitted to Congress in coming days.
Even without telecommunications and television to deal with, the antitrust commission is likely to have its hands
The commission recently launched an investigation into competitive conditions in the financial sector, following an
overhaul of banking laws that seeks to increase the level of bank lending to the private sector.
Last year, the commission ordered the country's two brewers--Anheuser-Busch InBev's Grupo Modelo unit and
Heineken's Cervecería Cuauhtémoc Moctezuma--to limit agreements under which certain retailers sell their
brands exclusively, following complaints by SABMillerPLC and several Mexican microbrewers.
The commission rejected the sale of paint coatings maker Comex to Sherwin-Williams, and caused food giant
Nestlé to sell Pfizer's baby-formula business in Mexico when it acquired Pfizer's global infant-nutrition business.
Other cases before the commission include a fine against state oil monopoly Petróleos Mexicanos over the
distribution of gasoline to the country's service stations, and an investigation into alleged price-fixing in the
Write to Anthony Harrup at email@example.com
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