Main axes in the reform of the competition law

The reform of the Federal Economic Competition Law is expected to be finalized soon. This has sparked public discussion regarding the main changes and the potential consequences that lie ahead. Below I present a brief summary of the issues that I consider most relevant.

1. The application of competition policy to state-owned enterprises could be redefined, potentially leading to their total immunity, which would raise controversies within the framework of the USMCA.

2. Regarding mergers, there would be a reduction in analysis periods and an extension of the period for investigating non-notifiable transactions. It is anticipated that there will be a greater number of mergers, which will need to be resolved more quickly.

3. Absolute monopolistic practices. Substantial changes are being discussed, as the exchange of information between competitors could be illegal without necessarily being linked to anticompetitive conduct, and the concept of potential competitors is included as a potential responsible party. This will generate greater risks for companies, reduce the burden of proof for the authorities, and require additional precautions in the context of merger and acquisition negotiations and in the operation of business associations.

4. Relative monopolistic practices. This could include undue restriction on the competitive ability of dominant firms. It is unclear whether this could lead to the adoption of additional regulatory measures for these firms.

5. Sanctions. The goal is to substantially increase sanctions and toughen their application. The sanctions would be applied immediately, once the competition agency issues its ruling. This would impact companies before they exhaust legitimate defenses.

6. Individual and collective actions for damages. The goal is to encourage civil claims for damages, particularly through the leadership of the competition authority. To this end, the statute of limitations rule and other legal provisions are planned for modification.

7. The authority's right to issue guides and guidelines would be preserved, although doing so would not be mandatory nor would they be subject to public consultation. This would hamper the clear application of legal provisions and generate practical problems in interpreting key concepts.

8. The new authority will incorporate various functions currently carried out by the IFT. This will increase the workload, requiring a larger budget. The authority must implement policies to attract and retain talent in specialized areas of telecommunications and broadcasting.

For companies, the challenges are several. First, they will need to modify risk management by implementing more robust compliance programs. In particular, controls must be strengthened in merger negotiations and in collaboration with competitors. Second, they must implement financial planning measures that include contingencies associated with the immediate payment of penalties. Finally, they will need to adopt more sophisticated legal defense strategies on the administrative, constitutional, and civil fronts.

A complex scenario is anticipated for the authority, as its responsibilities will increase and its budget will likely be limited. Given the possibility that the authority may have to address more matters, I believe two strategies should be pursued. The first consists of making an analytical and procedural effort to focus the agency's action on those cases that truly represent the greatest risk to the competitive process. The second, in parallel, consists of issuing new guides and guidelines, which, while not binding, would serve to clarify the application of procedures and conceptual interpretation, require the authority to act with greater discipline, and provide certainty to investors.

*Specialist in economic competition and regulation. Managing Partner of Ockham Economic Consulting.