Mexico’s sweeping reform of its competition law, approved on June 30, 2025, constitutes the most consequential update to the Federal Economic Competition Law (LFCE) in over a decade. The amendment establishes a new regulatory framework, increases the government’s investigatory and enforcement powers, and brings Mexico into closer alignment with international norms, including its obligations under the United States-Mexico-Canada Agreement (USMCA). For U.S. and Canadian companies operating in Mexico—particularly in infrastructure, digital goods and services, advanced manufacturing, and professional services—the implications are both immediate and wide-ranging.
1. Mexico’s New Competition Authority
A central feature of the Reform is the newly-created National Antitrust Commission (Comisión Nacional Antimonopolio, CNA), which replaces the Federal Economic Competition Commission (COFECE) and the competition-related functions of the Federal Telecommunications Institute (IFT). This consolidation, first recommended by the OECD in 2018 and reiterated in the 2023 policy paper on regulatory modernization, is intended to strengthen enforcement by concentrating investigative resources, creating uniform penalty standards, and eliminating institutional redundancies that had long undermined cross-sector enforcement coherence.
The CNA was established as a decentralized agency under the Ministry of Economy (Secretaría de Economía), with legal standing, independent assets, and full technical and operational autonomy. It retains separate units for investigation and adjudication—an institutional design consistent with global best practices and intended to strengthen due process.
Appointments of the CNA’s five commissioners—nominated by the nation’s president and confirmed by the Senate—are set to begin in late July 2025. According to the official decree, commissioners must possess at least ten years of professional experience in competition policy or economic regulation and must not have held management positions in regulated sectors within the prior three years. Some analysts believe the Sheinbaum administration plans to recruit experts in market regulation who can demonstrate independence from the entities they would oversee. Companies that may be affected by these new regulations or seek compliance certification under the new regime should monitor this transition closely, as the Commission’s early decisions will signal its longer-term priorities.
Enhanced Regulatory Powers and Transparency
To facilitate earlier detection of anti-competitive practices, many of COFECE’s formerly internal rules are now codified as statutory law, giving the CNA broader authority to conduct investigations through site inspections, market surveys, and expanded data collection methods. Notably, the CNA can now issue binding information requests to digital platforms and intermediaries that operate in Mexico, regardless of whether they maintain a physical presence in the country (Reformas a la LFCE, Art. 12 BIS).
The CNA will also monitor and verify compliance with pre-merger notification requirements, critical for acquisitions in regulated or sensitive industries such as telecommunications, financial services and energy. Regulators can now challenge transactions that consolidate user data or limit platform interoperability—areas previously beyond COFECE’s reach.
The Reform also expands the scope of merger review by lowering the notification threshold to 837 million Mexican pesos in assets. This change will capture a broader array of mid-market transactions, especially in the tech, retail, and health sectors, where market power can scale rapidly even at smaller deal sizes. The expanded scope will significantly impact cross-border M&A activity, particularly for U.S. and Canadian companies pursuing acquisitions in Mexico’s growing technology and healthcare markets.
For the sake of greater transparency and accountability, the CNA will now make its decision-making process more accessible to the public. This includes publishing plain-language summaries of its decisions and complete transcripts of plenary sessions. These transparency measures serve dual purposes: strengthening public accountability while providing businesses with clearer guidance on regulatory interpretations and enforcement priorities. This approach mirrors international best practices and OECD benchmarks for modern competition law enforcement.
In addition, the Reform also establishes formal protections for confidential information shared with external legal counsel, bringing Mexican practice closer to international standards and strengthening due process rights. Article 31 TER now provides that privileged communications between companies and their legal representatives will be excluded from evidentiary use, so long as the confidentiality protocols set forth in the enforcement guidelines are followed.
Two-Tier Compliance System and Regulatory Exemptions
The Reform introduces a two-tier compliance model that incentivizes voluntary adoption of the law’s protocols while, at the same time, expanding the Commission’s oversight authority. This structure is based on OECD recommendationsand mirrors similar frameworks implemented in Canada and select EU jurisdictions, where voluntary compliance programs serve as mitigating factors in enforcement.
Another provision authorizes the CNA to investigate overlapping and dominant ownership of content delivery networks across regional markets. As broadcasting and telecommunications converge—with streaming platforms increasingly bundled into telecom offerings—regulators will have the authority to assess risks related to media diversity, local content access, and market segmentation. According to Norton Rose’s July 2025 advisory, this “horizontal content dominance” test will be aimed at preventing both vertical integration and the establishment of content monopolies across multiple regional markets.
The Reform also establishes a formal program for compliance certification. While certification remains voluntary, it will come with significant advantages, including immunity from certain penalties and preferential treatment in public bidding. Under the guidelines published in June 2025, certification will be valid for three years and require that firms implement third-party audits, real-time monitoring systems, and board-level reporting protocols. Documentation without implementation no longer suffices—Mexican regulators now require active, demonstrable compliance protocols.
These incentives to “play by the rules” are counterbalanced by a controversial exemption for state-owned enterprises (SOEs), such as CFE and PEMEX. Under the Reform, Mexican SOEs are exempted from several key antitrust provisions, notably merger control requirements and abuse-of-dominance investigations. This carveout has drawn criticism from the legal and business communities, who argue that it may violate Articles 22.4 (Commercial Considerations and Non-Discriminatory Treatment) and related provisions of Chapter 22 of the USMCA, which establish that SOEs must:
Act in accordance with commercial considerations when engaging in commercial activities
Provide non-discriminatory treatment to foreign investments, goods, and services
Not provide advantages to domestic over foreign competitors in their commercial operations
This SOE carve-out is expected to create market barriers and regulatory uncertainty for American and Canadian companies operating in energy, rail, utilities, and other industries where SOEs maintain market dominance.
2. Strengthened Enforcement Mechanisms
Enhanced Enforcement Powers
The Reform’s enhanced monitoring and penalty framework will disproportionately affect sectors with entrenched market leaders and concentrated ownership structures. This evolved approach reflects Mexico’s alignment with international competition standards, creating ripple effects across multiple areas of business regulation.
Cartel Regulation
Article 53 now criminalizes anticompetitive exchanges of information even in the absence of an explicit agreement. This greatly expands potential liability in industries like logistics, technology, and infrastructure, where tacit coordination between competing firms is fairly commonplace. Companies can now face penalties for sharing any sensitive business information that could potentially lead to price coordination or market allocation, even without proof of a premeditated agreement. This will clearly impact behavior in business settings where competitors typically share such information, including industry benchmarking, trade association meetings, and collaborative data platforms. Companies are now advised to meticulously review their information-sharing protocols and communication practices to ensure compliance.
The revised language also introduces criminal liability for company executives and managers, allowing Mexican authorities to prosecute individuals who participate in collusive conduct. This more closely aligns Mexico with Canada and the U.S., where personal liability is a key deterrent in cartel enforcement.
Vertical Restraints
The new law clarifies the criteria used by regulators to identify when dominant companies misuse their market position through abusive distribution and pricing tactics. They can now examine how these practices harm not just direct competition but also businesses along the entire supply chain. This broader scope will affect common business arrangements like exclusive distribution agreements, minimum pricing requirements, and loyalty discount programs, any of which could unfairly disadvantage smaller competitors or limit consumer choice. Companies with significant market share must now carefully evaluate how their vertical agreements might affect competition across the entire distribution chain.
This expanded authority aligns with the OECD’s 2022 Guidelines on Vertical Restraints, which recognize the temptation of dominant companies to cut off smaller competitors’ access to essential inputs or block their market access. The CNA’s ability to address anti-competitive practices across entire supply networks marks a major shift from COFECE’s more segmented enforcement model.
Tighter Control of Mergers
Under the new law, already closed M&A deals will remain subject to regulatory challenge for longer periods, as regulators now have three years instead of one to investigate deals that were not properly disclosed or may create market dominance. This extended review window can potentially create multiple challenges for companies acquiring technology platforms and digital service providers, where competitive impacts often don’t become apparent for years. To defend against future investigations, companies are advised to conduct thorough due diligence and maintain detailed records of market conditions both before and after acquisition.
There is also a retroactive part of the law, called the “look-back” authority, that empowers the government to compel disclosure of internal deal documentation, market share assessments, and board-level discussions—even for already-closed deals that were not at the time subject to these rules. The chilling effect on small and medium-sized M&A activity may be significant, particularly in the tech and fintech sectors.
Sanctions
The Reform raises penalties for violations across the board, with fines now reaching up to 15% of company revenue for cartel behavior, 10% for abuse of market position, and 8% for unauthorized mergers (LFCE Art. 127). Beyond monetary penalties, companies caught collaborating with competitors in government bids face additional consequences, including a ban from public contracts for up to five years. The risk of this sanction will be felt far and wide in organizations operating in sectors heavily dependent on government contracts—such as infrastructure projects, energy services, and defense contracting—where disqualification could effectively shut companies out of major deals for years.
While fine amounts will continue to be based on revenue rather than profits, the new system includes aggravating factors such as recidivism, failure to cooperate, and public sector collusion. This represents a departure from COFECE’s historically more lenient approach, where maximum penalties rarely exceeded 5 percent of revenues and aggravating factors were applied inconsistently. Firms should now view sanctions not merely as operational risks but as existential threats.
Industry-Specific Impacts
Cross-border companies will experience the Reform’s effects differently depending on their industry footprint. All sectors face stronger enforcement, but companies in concentrated markets, complex supply chains, or government-dependent industries should expect intensified regulatory attention and compliance demands.
Digital Markets
Mexican regulators can now challenge mergers that threaten market structure through consolidation, data aggregation, or platform entrenchment—moving beyond the traditional focus on pricing.
This matters to U.S. and Canadian investors targeting Mexico-based tech startups. Companies that own proprietary algorithms, niche audiences, or rich user datasets may trigger a three‑year retrospective review—even if the deal fell below prior notification thresholds. Due diligence must now assess risks tied to network effects, customer lock‑in, and predictive data use not just financial returns.
Manufacturing and Nearshoring
The Reform expands regulatory oversight to supply-chain arrangements and commercial terms. Practices like exclusive distribution, minimum resale pricing, bundling, and loyalty rebates will now be scrutinized for their cumulative market effects—especially their potential to exclude competitors.
Companies are advised to carefully review joint venture, shared warehousing, or co‑manufacturing agreements, as any potential negative impact on competition—even if unintentional—may draw regulatory attention. In public‑procurement contracts, a single antitrust breach can result in a ban of up to five years—a serious risk for companies engaged in infrastructure, defense, or government‑linked projects.
Professional Services and Compliance
Professional service providers—including consultancies, law firms, IT services, and auditors—must now meet elevated compliance standards, as antitrust certification becomes mandatory for regulated sector work and government procurement. This certification demands more than mere documentation: firms must now demonstrate comprehensive employee training, continuous risk monitoring, board-level oversight, and complete audit trails. Certified firms will secure preferential access to client engagements and government contracts, while those lacking certification risk losing both private sector business and public procurement opportunities.
Strategic Response Framework
Immediate Priorities
U.S. and Canadian firms operating in Mexico should immediately begin conducting thorough risk assessments of past acquisitions, joint ventures, mergers, and other commercial arrangements. The extended three-year investigation window now encompasses transactions that previously fell below mandatory reporting thresholds, exposing “done” deals to potential retroactive challenge. Inaction by the authorities should not be interpreted as approval, as they may be conducting market studies, building cases, or coordinating with their cross-border counterparts during these “quiet” periods. This has already been observed in the digital and financial services sectors, where regulatory coordination with the U.S. DOJ and Canada’s Competition Bureau is increasing (OECD report).
Preemptive Leniency Strategy
Companies should treat the leniency program as a proactive strategy rather than a last resort. Voluntary disclosure before a formal investigation starts could result in complete immunity from penalties, while companies that cooperate after investigations begin may still secure fine reductions up to 50% if they act quickly. Speed is now a significant factor in regulatory outcomes—converting compliance from crisis management into proactive risk strategy.
Building Effective Compliance Infrastructure
Best practices in the U.S. and Canada now serve as the foundation for meeting Mexico’s certification requirements. Practices which were formerly voluntary, such as cross-functional working groups, comprehensive audit documentation, formal board oversight, confidential reporting mechanisms, and systematic training programs, are now mandatory. Companies must reassess their competition policies and protocols against Mexico’s heightened standards, ensuring their infrastructure can withstand both certification review and potential enforcement scrutiny. For example, compliance failures in cross-border pharma distribution were recently flagged in a Cofece enforcement bulletin, illustrating the real-world risks of underdeveloped programs.
CNA Autonomy Under Pressure
Though the CNA is legally independent, many oversight functions remain embedded within the Ministry of Economy. Recent legislative reforms—particularly the Senate’s move to fold independent agencies into ministerial control—could erode the agency’s autonomy. The CNA’s long-term success hinges on whether it can establish safeguards that insulate enforcement decisions from political pressure. Business groups including CCE and CANACINTRA have called for institutional guarantees of independence.
Cross-Border Coordination
Mexico is increasing cooperation with U.S. and Canadian competition agencies on investigations, particularly in digital markets and cross-border mergers. As a result, cross-border counsel must ensure coherent messaging across jurisdictions when preparing compliance disclosures, leniency applications, and remedy proposals, particularly given the agencies’ growing practice of information sharing and parallel case development. Discrepancies between filings may trigger multi-jurisdictional investigations and heightened scrutiny (ICN Best Practices).
Long-Term Market Consequences
For cross-border enterprises, the Reform requires a major recalibration. Regulatory missteps now carry cascading risks—a single violation can trigger parallel investigations across multiple jurisdictions, with compounding penalties and reputational consequences.
Companies that take proactive measures to implement robust protocols and make cross-border coordination seamless will gain a strategic edge. These firms will gain expedited merger approvals, preferential treatment in government bidding, and smoother market entry.
As North American trade integration continues, Mexico’s reformed competition laws will increasingly matter. Companies that adapt quickly to the new rules will be better positioned to benefit from expanding cross-border opportunities.
Obstacles to Reform Success
Although the Reform represents a big step toward harmonization with U.S. and Canadian standards, its success remains precarious, dependent on the CNA’s ability to preserve its autonomy and ensure impartial enforcement in the face of: (a) Mexico’s notoriously lax enforcement culture; (b) the threat of political interference; (c) inadequate budgets; (d) exemptions for SOEs; and (e) resistance from established players.
State-Owned Enterprise Exemption
The Reform’s exemption of SOEs from merger control and abuse-of-dominance provisions threatens to entrench competitive imbalances in energy, utilities, transportation, and financial services—sectors where PEMEX, CFE, Ferromex, and development banks like NAFIN maintain dominant market positions.
The practical effect will be an uneven playing field: foreign and private companies will face rigorous antitrust scrutiny while competing directly against SOEs that operate outside these constraints. This dual standard not only undermines fairness but also raises questions about Mexico’s commitment to the market-oriented principles underlying the USMCA.
Resource Constraints and Enforcement Bottlenecks
The Reform’s reduced filing thresholds and broadened scope will inevitably result in a surge of mid-market transaction filings—particularly from fast-growing digital, healthcare, and logistics sectors. This may create major case backlogs that delay resolution of complex investigations and divert attention from top enforcement priorities.
These capacity constraints pose risks for market participants. Prolonged review periods may increase deal uncertainty and transaction costs, while regulators strapped for resources might sacrifice thorough analysis for faster case turnover.
A recent Mexican Senate oversight report flagged concerns that CNA staffing and budget allocations may be insufficient to handle the surge in cases prompted by the Reform.
The agency’s ability to manage this expanded workload effectively will serve as an early indicator of the Reform’s viability and its capacity to deliver the consistent, rules-based enforcement that the North American market requires.
Companies should track whether case backlogs actually develop and whether the CNA maintains rigorous analytical standards despite these pressures.
Shortened Response Times
The Reform grants regulators broad authority over critical enforcement timelines, placing heightened pressure on companies—especially those no longer eligible for leniency or settlement programs. In this environment, firms with well-prepared legal counsel will have a clear advantage, as even routine delays may disqualify them from immunity or reduced penalties.
In effect, the new framework penalizes deliberation. Organizations requiring extended board approvals or protracted internal reviews risk losing access to favorable settlements simply because they moved too slowly—regardless of the merits of their case.
This compressed timeline changes how firms must manage regulatory risk. The Reform’s tight deadlines now demand quick internal decision making and legal counsel prepared to respond within days rather than weeks.
Cross-Border Enforcement Coordination
Companies operating across North American markets face an additional risk: the CNA can now monitor cross-border pricing and distribution patterns in real time. This surveillance could reveal contradictions in domestic versus export pricing strategies, inconsistent market share reporting across jurisdictions, conflicting claims about competitive positioning in merger filings, or divergent explanations of supply chain arrangements and exclusive dealing practices.
Of particular concern is the Mexican government’s new-found authority to share information from ongoing cases with foreign regulators. This means companies under CNA investigation may find their Mexican regulatory filings, internal communications, and market studies shared with U.S. or Canadian authorities before they’ve even had a chance to coordinate their legal strategies.
As already mentioned, rapid response times will be critical. While Mexican proceedings now move faster due to compressed deadlines, parallel investigations in other jurisdictions may still lag. Companies risk making strategic concessions in Mexico that later complicate their positions in slower-moving U.S. or Canadian cases.
These timing pressures underscore the basic challenge facing Mexico: ambitious laws mean little without proper implementation. Although the Reform brings modern enforcement tools into alignment with North American standards, critical questions remain about the CNA’s institutional capacity, the corrosive effects of SOE exemptions, and the sustainability of proper enforcement amid broader political pressures.
The Compliance Advantage
In sum, Mexico’s competition reform marks a profound shift toward modern antitrust enforcement—one whose effectiveness will hinge on how well it is implemented. During this transitional phase, cross-border companies cannot afford to wait for regulatory clarity. Companies that take early action—by engaging the CNA, integrating compliance into business planning, and aligning with North American regulatory standards—will be better positioned to shape outcomes and gain competitive access to contracts and markets. In contrast, companies that delay action will risk being outpaced by competitors, penalized for non-compliance, or shut out of high-value opportunities. For the first time, regulatory compliance may well determine whether a business thrives—or disappears.