Mexican Competition Policy - Competition Law - Lecture Slides, Slides of Competition Law and Policy

Download Mexican Competition Policy - Competition Law - Lecture Slides and more Slides Competition Law and Policy in PDF only on Docsity! Mexico’s competition policy: the journey towards maturity Docsity.com Lack of competition has long been a major obstacle to economic growth in Mexico … Fuentes: Banxico, Presentation by Governor Guillermo Ortiz to the British Chamber of Commerce, December 6, 2007 IMCO, Punto de inflexión: Situación de la competitividad de México 2006 World Bank, Mexico 2006-2012: creating the foundations for equitable growth, June 2007 OECD, Economic survey of Mexico, 2007. IMF, Mexico: Staff report for the 2007 Article IV consultation WEF, The Global Competitiveness Report 2007-2008. “To stimulate firms’ productivity and improve their competitiveness more competition in markets is required.” “Lack of competition, particularly in the provision of basic inputs for production … propitiates the deficient performance of other factors. Elimination of existing barriers to entry is urgent.” “Mexico needs stronger competition and better regulation to boost productivity and growth.” “Strengthening competition (…) should also have high priority, and –as international experience has shown- may also facilitate reform in other areas as well as helping equity.” “Mexico’s competition environment, regulatory framework and investment climate are major priority areas to increase Mexico’s competitiveness.” The World Bank “Mexico’s goods markets suffer from inadequate (foreign and domestic) competition conditions, with overregulated and rather closed key economic sectors. Only by addressing these challenges can Mexico begin to fully leverage its important competitive advantages.” 2 Docsity.com Competition policy in Mexico has just begun to emerge as a force … 1993 1998 2006 2011 No competition policy Institution building Procedural strengthening Raising profile Federal Law of Economic Competition enacted Bylaws to Law published 1st reform to Competition Law 2nd reform to Competition Law • Anticompe- titive conduct legal • Artificial barriers to entry as policy • Competition culture absent • Lack of specialized expertise • No legal precedent • Emerging Internal procedures • First steps towards judicial understanding • Expansion of the Commission • Incipient public awareness • Insufficient powers of dissuasion • Increased engagement with other regulators Main issues Milestones Life cycle phase 5 Docsity.com … with the benefit of building on a solid analytical and institutional platform 6 Analytical framework Institutional setting • Economic efficiency sole objective of law. • Best-practice analytical standards:  Per se prohibition of hard-core cartels  Unilateral conduct subject to rule of reason  Pre-merger notification for large operations • Statutory independence of authority • Collegiate decisions taken by 5-person Plenum • Commissioners isolated from politcial pressure:  Staggered, irrevocable, non-renewable 10-yr terms • Internal checks and balances Docsity.com Effectiveness of competition policy hinges on its ability to successfully dissuade anticompetitive conduct Cost of infringement Judicial track record Compe- tition culture Enforce- ment threat Legal certainty Enforcer’s toolkit: Sanctions, investigative tools, suspension powers Transparency: Guidelines, publication of decisions Track record: Proven willingness to apply law 7 Effectiveness: Ability to have decisions upheld by courts Awareness and support: Public backing, influence in policy-making process Docsity.com …improved its track record in judicial review of its decisions … 49 74 2004-2007 2008-2011 % of judicial challenges resolved in CFC’s favor Judiciary engagement strategy 1. Bolstering reasoning in CFC decisions • Reallocation of resources to technical units • Deepening of multidisciplinary approach 2. Improving communication of reasoning • More attention to drafting of decisions • Added emphasis on oral statements 3. Mutual education • Judges: Workshops with international peers ⇒ better understanding of technical aspects • CFC: Conferences imparted by judges ⇒ Internalization of judicial criteria 4. Added certainty due to 2006 law reform • Procedures and standards modified to conform to judicial rulings 10 Docsity.com … and provided added legal certainty about enforcement standards and criteria Guidelines and criteria       Access to CFC documents Status of ongoing procedures Plenum’s decision- making process Oral hearings Access to case files 7 documents published (ex. market definition & power, leniency, fining) New search engine (complete history of CFC decisions) Status (phase, period) displayed in search engine Sense of vote by each Commissioner published Included in reforms, procedure at design stage Impossible for confidentiality reasons Actions Status Public consultation on transparency needs (February-April 2010) 11 2011 Winner, Innovation in Govt. Transparency Award (awarded by IFAI, WB) Docsity.com The CFC has also worked to foster competition culture in Mexico … 12 Main policies to foster higher levels of investment in Mexico Survey of private sector economists % of responses, moving average (six periods) Energy reform Labor market reform Competition and regulatory framework Fiscal reform Infraestructure Public safety Source: Banco de México, Encuestas sobre las expectativas de los especialistas en economía del sector privado 2003-2011 Rule of law Macroeconomic stability 0 5 10 15 20 25 Ju n- 04 O ct -0 4 Fe b- 05 Ju n- 05 O ct -0 5 Fe b- 06 Ju n- 06 O ct -0 6 Fe b- 07 Ju n- 07 O ct -0 7 Fe b- 08 Ju n- 08 O ct -0 8 Fe b- 09 Ju n- 09 O ct -0 9 Fe b- 10 Ju n- 10 O ct -1 0 Fe b- 11 Ju n- 11 O ct -1 1 Fe b- 12 Docsity.com Significant challenges remain, some of them a direct result of developments over the past years … Specialized judicial review Implementation of reforms CFC’s resources Transparency and accountability • Changes to bylaws to reflect reformed law  New Plenum / staff division of labor  New procedures (ex. oral hearings)  New tools (ex. on-premises searches) • Issue left pending for further reform • CFC will aim for swift, balanced and in-depth review of agency’s decisions by specialized judges and courts • Effort to secure additional resources has resulted in 30% increase in authorized staff for 2012 • Next challenge will be to recruit and train staff • Additional guidelines prescribed by legal reforms (currently on course) • Ex post evaluation needs to be tackled 15 Docsity.com … and competition considerations have yet to become a central plank for the design or review of public policy 16 Fuente: National Competition Policy, Report by Independent Committee of Inquiry (Reporte Hilmer), p. 87 Presumption: Universal application of competition principles Exceptions have to be justified by reasons fo public interest Minimal regulatory burden The Australian example Docsity.com The CFC aims to assist other young Latin American agencies in replicating its journey 17 Latin American Regional Competition Center • Founded in September 2011 • CFC developed, facilitates and provides platform • Members: 14 Latin American competition agencies • Initial funding from World Bank, IDB • Core services:  Expert advice  Training  Guidelines and criteria  Market studies Hub • Scale • Contacts • Knowledge Docsity.com