Competition policy in the energy sector, since the reform of the rules of these markets in 2013, depends on the cooperation between the Federal Economic Competition Commission (Cofece) of México and the regulatory bodies of the sector (Energy Regulatory Commission, National Hydrocarbons Commission, and the Security, Energy and Environment Agency).
Since regulators have the most information on energy markets, they are the ones who can best detect possible anticompetitive behavior by economic agents, as well as determine whether the rules that regulate these markets allow competition and free concurrence.
In this regard, Cofece considers that regulators are in the best position to request Cofece to initiate investigations to determine whether there is an absence of competitive conditions or to establish the existence of essential inputs in these markets.
Likewise, due to their knowledge of the sector, they could request that Cofece sanction possible monopolistic practices in accordance with the Federal Economic Competition Law (LFCE).
However, even in the absence of complaints or investigation requests from regulators, Cofece may make use of its powers under the LFCE.
Cofece is an autonomous agency of the Mexican State in terms of Article 28 of the Political Constitution of the United Mexican States (CPEUM).
In this sense, Cofece has made frequent use of its power to issue opinions with recommendations to modify the regulatory frameworks in energy markets when it considers that they could violate the principles of competition and free competition.
Competition Policy
Specifically, Cofece has issued eight opinions on the issuance or modification of regulations in these markets to ensure that both state-owned and private companies compete on a level playing field.
In addition, it has published five studies with competition recommendations for energy markets.
Moreover, Cofece has filed before the Supreme Court of Justice of the Nation (SCJN) two constitutional controversies against regulations issued by the Ministry of Energy (SENER) on the grounds that they were contrary to the principles of competition and free concurrence safeguarded in the CPEUM and that they affected the Commission’s sphere of competence.
Likewise, in 2022, Cofece filed another constitutional controversy against a decree of the Ministry of Energy that obliges companies to acquire surplus natural gas from Pemex and CFE.
In conclusion, competitive conditions in energy markets require cooperation between regulators and Cofece, as well as pro-competitive regulatory frameworks.
Given its autonomy, even in the absence of these factors, Cofece has made use of the powers granted to it by the LFCE to combat possible monopolistic practices and to promote that regulatory frameworks adopt the principles of competition and free competition».
The President of Mexico, Andrés Manuel López Obrador, has questioned Cofece’s efficiency in guaranteeing free concurrence and competition in the country’s markets.
