Increasing economic integration and the rapid digitalization of markets requires more and better cooperation between competition agencies around the world. The following sections provide cooperation experiences of the Mexican Federal Economic Commission (COFECE), with its counterparts from the United States (US) and the European Union (EU), which illustrate how the relationship with these agencies has been strengthened over the years, through better mutual understanding and increased trust.
Cooperation with US antitrust authorities
Since the negotiations of the North American Free Trade Agreement (NAFTA) in the 1990s, trade between Mexico and the US has increased to such an extent that Mexico became the US’ largest trading partner in 2020. This agreement has not only laid the foundation from which complex production value chains have been built, making both countries an attractive region for investment from around the world, but was instrumental in the establishment of competition policy in Mexico.
In order to comply with the terms established in NAFTA regarding the enforcement of the competition laws in the countries of the region, the governments of Mexico and the US signed an agreement in 2000 that establishes the grounds for cooperation between their competition agencies. Thereafter, cross-border merger control has been a forefront cooperation issue between COFECE and its counterparts, the Federal Trade Commission (FTC) and the Antitrust Division of the Department of Justice (DOJ). This cooperation has been carried out mainly by formal means, particularly through confidentially waivers provided by the merging parties. Two examples worth highlighting are the cooperation in the Continental/Veyance operation (2014), where agency collaboration was key when crafting extraterritorial remedies, which were imposed jointly by COFECE and the DOJ, that contemplated divestiture in the Mexican State of San Luis Potosi and in Fairlawn, Ohio. The other relevant case is the ChemChina/Syngenta merger (2017), in which COFECE coordinated with the FTC to ensure decisions were taken within similar timeframes.
COFECE has also cooperated with the US authorities in cases related to anticompetitive conducts. In these types of cases cooperation has been carried out formally through the use of waivers (only in cases with leniency applications). However, some of the most beneficial results have been achieved through informal cooperation, mainly by general discussions unrelated to particular cases regarding, for example, investigation strategies followed by other jurisdictions, publicly available market information or competition analysis methods. A case worth highlighting is the international cartel investigation in the global market of air conditioning compressors, where the Commission had an on-going cooperation with various jurisdictions, but mainly with the DOJ.
Informal cooperation in enforcement cases is crucial to COFECE because there are important impediments in the Mexican competition law to: disclose confidential information without a waiver; disclose information during the investigation stage; and grant access to the case file during the trial-like procedure to those that do not have legal standing in the procedure. Therefore, all cooperation with foreign authorities regarding a case must occur through waivers or informally without disclosing information on the specific case. In order to address these hurdles, the Commission is currently exploring the possibility of entering into second-generation agreements that would enable the possibility of engaging in investigative assistance activities.
Non-enforcement cooperation with the US authorities has been extremely fruitful, particularly that related with technical assistance provided by the FTC, the DOJ and even the Federal Bureau of Investigation (FBI), to the Commission’s staff. Another type of cooperation which has greatly benefitted the Commission is the advice received from the FTC and the DOJ to improve the Commission’s procedures. For example, the drafts of the regulatory provisions for client-attorney privilege and leniency program received important feedback from these authorities, which allowed the strengthening and alignment of these documents with best international practice. It is worth highlighting that the regulatory provisions for client-attorney privilege fulfil the recognition of this principle, which was recently included in the new US-Mexico-Canada Agreement (USMCA), that entered into force in 2020, substituting NAFTA.
Cooperation with the competition authority of the European Commission
Mexico is amongst the largest trade partners of the EU, mainly since 2000, when their economic relations were facilitated by the European Union-Mexico Economic Partnership, Political Coordination and Cooperation Agreement. This agreement includes specific provisions for cooperation and coordination in competition enforcement and policy between Mexico and the European Community. In 2016, the parties began negotiations for the modernization and update of the agreement. The proposed draft includes a new competition chapter, which defines anticompetitive business practices, provides for cross-border cooperation and coordination between the parties, amongst other provisions. Although the legal revision of the new EU-Mexico trade agreement has been finalized, its signature is still pending.
On a bilateral level, in 2018, the Directorate-General for Competition (DG Competition, the EU’s Competition Authority) and COFECE signed the Administrative Agreement on Cooperation in the Field of Competition Law and Enforcement. The scope of the agreement extends to the coordination of enforcement activities between COFECE and DG Competition, which is increasingly relevant, for example, in the assessment of global mergers and acquisitions subject to review in diverse jurisdictions. This agreement also includes a provision related with cooperation on technical matters, for instance, through capacity building or the exchange of officials.
COFECE and DG Competition have cooperated in several cases, especially comparing approaches and issues of common interest, and in the design of remedies for cross-border mergers. COFECE considers that the most beneficial means to conduct this cooperation are regular calls to exchange information and views regarding the status of the ongoing merger investigation, markets involved, substantial theories of harm, and information on potential remedies. To facilitate cooperation in this process, waivers of confidentiality granted by the merging parties have been instrumental.
For example, in the Dow/DuPont merger (2017), the parties offered COFECE a remedies proposal that consisted in complying with those imposed by DG Competition. COFECE considered that these effectively resolved any competition concerns in Mexico; and only requested the parties to prove that they complied with the remedies imposed by the European Commission.
In the 2019 merger between Nidec and Embraco (Whirpool’s refrigeration compressor business), COFECE also relied on a remedy imposed by DG Competition, which consisted in the divestiture of one of the parties’ businesses (compressors for commercial applications).
COFECE’s bilateral cooperation experiences with its US and EU counterparts are an example of how ongoing collaboration on enforcement cases and technical assistance strengthens the relationship of trust between the authorities’ staff, which helps to further enhance the benefits of future collaboration efforts between these agencies. Participation in international organizations, such as the ICN, OECD and UNCTAD also strengthens these relationships; such organizations provide an important platform to forge potential bilateral and multilateral relationships for future collaboration on international enforcement cases.