Mexican competition watchdog criticizes overreach by energy regulator

Bnamericas Published: Thursday, October 20, 2022

Mexican competition watchdog Cofece has issued an opinion stating energy regulator CRE's attempts to crack down on cross-participation in the hydrocarbons sector contradict the law.

Cofece said under the new rules CRE’s competences overlap with Cofece’s and duplicate its faculties to analyze hydrocarbons market concentration.

“Assessing the potential effects of cross-participation ... would remove any usefulness from the concept of favorable opinion by Cofece included [in the current hydrocarbon's law],” the agency said. The opinion can be accessed here.

Concerns regarding a potential overreach by CRE in relation to cross-participation began in August, when it proposed a regulation to obtain the ability to ask for documentation to assess market concentration, potentially duplicating Cofece's capacities.

Experts warned at the time the new regulation would give CRE more discretion to request internal information from private players and sector players criticized the changes, claiming the requirements were excessive and difficult to comply with, increasing regulatory load.

Cross-participation regulation attempts to prevent companies that use Mexico's pipeline infrastructure and own producers or sellers of hydrocarbons products from using their position in the market to displace competitors or take control of infrastructure meant to be universally accessible.

Mexico's supreme court ruled in 2021 that CRE's faculties included spurring competition, but not investigations to prevent anticompetitive practices. The latter would fall under Cofece's purview instead.

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