Mexico’s Antitrust Oversight at Risk Due to Budget Cuts

Mexico’s competition regulator, the Federal Economic Competition Commission (Cofece), faces a challenging year ahead, as a significant reduction in its budget and ongoing structural reforms threaten to undermine its ability to enforce antitrust laws effectively.

A recent publication in the Federal Official Gazette revealed that the 2025 federal budget allocation for Cofece amounts to less than one-third of the amount it originally requested. According to a statement, this drastic cut could create uncertainty about the agency’s capacity to fulfill its key functions, particularly as it navigates a transition from an autonomous body to a government ministry under controversial constitutional reforms.

On December 20 and 24, 2024, two important legal documents were made public. The first, a decree concerning organic simplification, establishes the creation of a new authority that will oversee antitrust enforcement in Mexico. This reform is set to phase out Cofece, although the transition period, during which secondary laws must be enacted, means Cofece will continue to operate its existing functions.

Read more: Mexican Lawmakers Advance Controversial Plan to Dissolve Independent Oversight Bodies

Cofece is currently handling several high-stakes cases, including the review of over 150 merger operations, representing nearly 10% of Mexico’s GDP. Additionally, the agency is investigating around 25 cases in crucial markets affecting the welfare of Mexican families and the broader economy. These ongoing procedures are vital to maintaining fair competition and preventing abusive practices by companies.

However, the substantial reduction in Cofece’s budget for 2025 raises concerns over its ability to effectively carry out these responsibilities. “Cofece is committed to providing certainty to investments that generate employment and growth in the country, as well as continuity to its investigations and enforcement efforts,” the agency emphasized in a statement. The agency is now implementing extraordinary measures to ensure that the reduced funding can be stretched to continue its essential work until the new competition authority is established.

With the looming transition, Cofece aims for an orderly shift of responsibilities to the new body. To this end, the agency is actively engaging with government entities to ensure a smooth handover, and it is seeking an appropriate closure plan. This plan is intended to guarantee sufficient resources for ongoing procedures and to uphold legal processes during the shift in responsibilities.

Source: COFECE