In an unprecedented action, this month the Investigation Bureau of the Mexican Federal Competition Commission (COFECE) has brought criminal prosecutions against individuals who allegedly participated in bid rigging activities in Mexico between 2009 and 2015. This is the first criminal action COFECE has brought and is a direct result of the revisions to Mexico's competition laws in 2014, which enhanced COFECE's enforcement powers.

According to COFECE, a number of bidders coordinated their participation in public tenders related to the health sector of Mexico. The conduct purportedly affected in more than $1,200 million Mexican pesos ($58.7 million dollars) worth of purchases made by the Mexican Government. While the details are confidential, COFECE has recently investigated several industries within the healthcare sector including latex products, industrial oxygen, medicine distribution, and blood banks/laboratory testing.

Under Mexican law, bid rigging, price fixing, and similar horizontal collusion are considered absolute monopolistic practices, analogous to actions that would be per se illegal under U.S. antitrust laws. Absolute monopolistic practices are punished severely. Guilty parties face fines up to 10% of their income, and individuals who directly participate could also receive up to 10 years in prison and a ban on holding management positions in any company for up to 5 years.

First enacted in 1993, Mexican competition law underwent several amendments to improve antitrust enforcement. Most importantly, as part of a series of constitutional reforms in 2013, two autonomous competition authorities were created: the Federal Telecommunications Institute (IFETEL), entrusted with competition policy and enforcement for telecommunication and broadcasting sectors, and COFECE, in charge of competition law enforcement in all other sectors of the economy. In 2014, the Mexican Congress enacted a new competition law, which preserved the main aspects of Mexico's competition policy regime and strengthened the ability of the new competition authorities to investigate and sanction monopolistic practices and anticompetitive mergers.

The newly empowered Mexican authorities COFECE and IFETEL have taken their enforcement roles seriously. These authorities are active in enforcing the Mexican competition law across all sectors of the Mexican economy. Since its creation in 2013, COFECE has opened 33 investigations, imposed fines totaling more than $590 million pesos (US$28 million), analyzed almost 400 mergers, made 35 dawn raids, and reportedly generated benefits for Mexican consumers totaling $2,370 million pesos (US$116 million).

IFETEL has adopted several measures to increase competition in telecommunications sectors, such as investigating mergers that were not reported to the authorities and identifying dominant firms in telecommunications and the broadcasting markets, as the 2013 reform allows for enhanced regulation of a firm with a national share exceeding 51%, measured in terms of the number of users, subscribers, audience, network traffic, or used capacity.

The criminal actions brought by COFECE are important, not only because this is the first time that these types of charges have been brought in Mexico, but also because this sends a clear message that the competition authorities will use all available tools to enforce competition law. Businesses in Mexico should expect to see more criminal enforcement actions of this kind in the future.