Collective Dominance in Mexican Competition Law

On April 30, 2010, the Mexican Congress approved a long-awaited set of reforms to the Mexican Competition Law. From an economic perspective, one of the key proposed reforms deals with the identification (and probable punishment) of anticompetitive practices derived from “collective dominance”.

Nowadays, Mexican competition law uses the concept of Significant Market Power (“SMP”) as applied to one-agent contexts —see Article 13 of the Mexican Competition Law. One of the key amendments contained in the reform sent by President Calderón to Congress is directed to the extension of the SMP concept to multi-agent settings, in which a set of economic agents can be identified to have, collectively, significant market power. In principle, the proposal seems to be an innocuous extension of an economic concept already contained in the law. However, the extension of this concept to multi-agent settings is far from being straightforward, as briefly discussed in “Competition Law Reform in Mexico: A Note on Joint Dominance”.

The above article concludes arguing that the construction of a robust concept of joint dominance should be based not only on the identification of the structural conditions that facilitate it, but also on the identification of some sort of competitive damage. The proposed reform to the Mexican Competition Law in this matter seems to identify the essence of the problem, but it remains somehow limited. It is true that the approval of this reform would still require the revision of complementary regulations and (hopefully) the release of guidelines on this matter, but it is also clear that such a complex concept needs to be discussed more broadly before the implementation of any legal amendment. The debate is open and the stakes are high.

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