Publication date: 30 January 2019
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Structural remedies are a powerful tool competition authorities can apply in a variety of scenarios. While it is common to see divestiture of assets in merger cases or as a corrective measure following market investigations, their implementation in abuse of dominance cases is very limited as alternative solutions are usually preferred.
The Constitutional reform in telecommunications, broadcasting and economic competition of June 2013 modified Mexico’s institutional landscape in these three public policy areas. The reform created two competition authorities, the Federal Economic Competition Commission (COFECE) and the Federal Telecommunications Institute (IFT), formed specialised courts in these areas, and produced a new Federal Economic Competition Law (FECL), applying to both authorities, which was enacted in May 2014. These 2014 amendments to the Mexican competition legislative framework empowered the country’s competition authorities to order the divestiture of assets, rights, partnership interest or stock pertaining to economic agents in the presence of barriers to competition and free market access, in order to eliminate anticompetitive effects stemming from them. This power could be exerted whenever other corrective measures were deemed to be insufficient to solve the identified competition concerns.
Considering the lack of precedents – in abuse of dominance cases – for the use of asset divestiture as a structural remedy in Mexico, the aim of the report is to serve as a reference document to the relevant Mexican Authorities highlighting international experiences and best practices. It describes the different types of remedies available and their objectives, advantages and disadvantages and the principles driving authorities in choosing this approach. Moreover, this report could also provide guidance to business and consumer groups about how the competition authorities may order asset divestiture as a structural separation remedy.