Mexico's new antimonopoly legislative bill advances (probably due to immigration pressures)

MexicoNews.com.mx (Miami Herald in Mexico City) ^ | April 08, 2006 | THOMAS BLACK

[Shuttle Shucker]

Mexican lawmakers won backing from the nation´s largest business group for a bill to increase competition in industries ranging from telecommunications to manufacturing, paving the way for passage as early as this month.

The legislation, which would increase fines for anti-competitive practices, limit appeals and force repeat offenders to sell assets, may be voted on by the Chamber of Deputies Economy Committee on April 18, said Jorge Luis Hinojosa, a member of the committee. The full house would vote two days later, barring significant changes, and the Senate by the end of the month, he said.

Teléfonos de México SA, the fixed-line telephone company controlled by Carlos Slim, is among companies in Mexico whose high prices are limiting the nation´s ability to compete, central bank Governor Guillermo Ortiz said March 8.

The proposed law is aimed at curbing such dominance to help spur economic growth and create jobs, said Eduardo Pérez Motta, chief of the anti-trust agency. "It´s a law that will have a big impact on the country´s competitiveness, on growth, on employment and with very clear benefits for consumers," Pérez said in an interview late Thursday.

The lower house committee on Thursday reached agreement on the bill with the Business Coordinating Council (CCE for its intials in Spanish) )and the antitrust agency, Hinojosa, a member of President Vicente Fox´s National Action Party, said in an interview on Thursday. The law would increase fines to as much as 10 percent of annual sales and create incentives for executives to bring forth evidence of anti-competitive practices, said Pérez.

The agency would have the power to make visits to companies to verify compliance and could break up companies that repeat offenses, he said. "Mexico has been losing competitiveness and a lot of it is because inside the country there hasn´t been competition," said Hinojosa. "The intention of this law is to give incentive inside Mexico so there are no monopolies and to give access for more competition in markets."

Companies backed the bill after lawmakers agreed to require a court order for verification visits and to limit the visits to information previously cited, said Oscar Fitch, a member of the business council. Business executives also demanded clearer definitions under the law for terms such as monopolistic practices and efficient markets.

"We´re now all in agreement," said Fitch, president of the Mexico-City lobbying firm Fitch & Asociados. "It´s a step forward because it´s a more modern law, it gives us more legal certainty and there´s less discretion on the part of authorities."

Telmex said in a statement it declined to comment on the law while it´s still under debate in Congress. The number of appeals from companies that use several courts to delay implementation of decisions may drop by 30 percent under the new law, Pérez said.

[Shuttle Shucker]

Thanks for calling my attention to that interesting thread :-)

[La Enchiladita]

Sure thing!

[Shuttle Shucker]

Hey, here's an ENGLISH language article on this hot subject. As a preface I say that stress is the mother of innovation, and our immigration crackdown is doing the job:

http://www.mexiconews.com.mx/18017.html

Bill to increase competitiveness

BY ELISABETH MALKIN
El Universal
April 30, 2006
Congress voted late Thursday to strengthen antitrust laws, a measure advocates say will bolster the economy´s flagging competitiveness by restricting a company´s ability to dominate a crucial industry.
The Senate unanimously approved the bill, following the lead of the lower house, the Chamber of Deputies, which had done the same on Tuesday.
The measure passed despite lobbying by Carlos Slim Helu, whose control of Teléfonos de México, the country´s dominant telecommunications company, has helped him become one of the world´s richest men.
But Eduardo Pérez Motta, the top antitrust regulator, said political parties had an eye on the July 2 vote when they passed the law.
"We have to put the interests of consumers at the center of the country´s public policy," said Pérez Motta, who heads the Federal Competition Commission (CFC).
Luis de la Calle, a business consultant and columnist who worked to support the law, said that increased competition would help the economy modernize.
Mexico´s economy has performed poorly since President Vicente Fox took office six years ago. Economists have said the growth rates of less than 4 percent were too low to create new jobs for an expanding work force. Many economists argue that a reason is the lack of competition in many sectors of the economy.
Many leading industries here are dominated by one or two companies that use their market power to block new competitors.
Telmex, for example, controls 95 percent of all local lines. Mexico´s two brewers have a lock on distribution channels. Two companies control almost everything viewers can watch on broadcast television. Energy remains in the hands of two state monopolies.
Foreign competitors like MCI and the brewer SABMiller complain about the difficulties of breaking into Mexico´s market.
But the CFC has been hamstrung by weak laws. Companies have paid only 15 percent of fines imposed and have tied up many CFC decisions via legal actions.
The new law quadruples fines, to as much as US$5.5 million, for antitrust violations. In the case of repeat violations, the CFC could fine a company as much as 10 percent of its sales and ultimately even move to break it up.
Pérez Motta said higher fines might spur many companies to change. "Once you know the fines are higher," he said, "you just don´t run the light."
It will also make CFC opinions binding on other regulators. In particular, many critics argue that Mexico´s telecommunications regulator has done little to check Telmex´s power. Now, the CFC will have a say in writing regulations as new technology enhances the possibility of competition.
The CFC also plans to look at airports, railroads and customs brokers: all potential bottlenecks that add to the price of finished goods, Pérez Motta said.
The new law creates protection for whistle-blowers and allows the CFC to conduct searches. It also eliminates ambiguities companies have used to win injunctions against the CFC.