Antitrust Alert: Mexican Competition Commission Fines Trucking Industry for Price Fixing
On June 14, 2010, the Mexican Federal Competition Commission (also known as Cofeco or CFC) announced its decision to fine a group of companies and individuals in the trucking industry, whom Cofeco charged with agreeing to impose a standard fuel surcharge, in violation of Mexican antitrust law. This action, which mirrors similar actions in other jurisdictions, is a reminder of the increasing level of antitrust enforcement in Mexico.
Following a two-year investigation, Cofeco found that the National Chamber of Cargo Transportation (Canacar) and representatives of trucking companies had formed an agreement to impose a standard fuel adjustment surcharge on cargo shippers. The surcharge was an attempt to recover increased costs of diesel fuel, for which government-approved prices have risen. Cofeco learned that Canacar had used the internet and various traditional publications to announce a standard fuel adjustment surcharge.
Cofeco viewed the agreement on the surcharge as a clear violation of Mexican law. Article 9 of the Mexican Competition Law prohibits "contracts, agreements, arrangements or combinations" among competitors that have the purpose or effect of "establishing, raising, coordinating, or manipulating the sale or purchase price of goods or services offered or sought in the market."
Cofeco imposed fines totaling more than Pesos $30 million (about US $2.4 million) on Canacar, five trucking companies, and five individuals, and it ordered them to suspend the illegal practice. The Competition Law gives Cofeco the authority to impose fines for violations, and Mexican criminal law could subject violators to criminal prosecution and imprisonment for up to ten years. Announcing the decision, Cofeco's chairman stated that "this case is a good example of the obligation of industry associations not to promote, among its members, collusion that violates Competition Law and harms consumers. If an industry association engages in anticompetitive practices, it will be fined."
Cofeco's decision is subject to challenge in the Mexican courts. Once the decision is final, any person harmed by the anticompetitive practice may bring a civil action against the entities and persons involved and demand payment of damages that are a direct and immediate result of practice. In any such proceeding, the private plaintiff would be required only to prove that it has suffered harm from the illegal conduct and the amount of damages.
Cofeco has increased its antitrust enforcement efforts across industries. This action follows similar transportation industry actions by Cofeco's counterparts in other jurisdictions. As petroleum prices have increased over the last few years, antitrust authorities in North America, Europe, and Asia have investigated fuel surcharge price fixing agreements in air, rail, and ground transportation sectors.
For more information, please contact your principal Jones Day representative or either of the lawyers listed below.
Javier Martínez del Campo L.
Jesús Gabriel Altamirano
Jones Day prepares summaries of significant antitrust enforcement, litigation, and policy events as a service to clients and interested readers, to provide timely insight on antitrust and competition law developments relevant to business, but not as legal advice on any specific matter. Please visit our Publication Request form to add your name to our distribution list.