01 / 10 / 25
Constitutional reform on organic simplification of COFECE and the IFT
MEXICO CITY, MEXICO, January 10th, 2025 – On December 20, 2024, the “Decree by which several provisions of the Political Constitution of the United Mexican States are amended, added and repealed, regarding Organic Simplification” was published in the Official Gazette (“Decree” or “Reform”), after being approved by the Mexican Congress on November 28, 2024.
Under the Decree’s Tenth Transitory Provision, the economic competition powers currently held by Federal Economic Competition Commission (“COFECE”, for its acronym in Spanish) and the Federal Telecommunications Institute (“IFT”, for its acronym in Spanish) will be transferred to a decentralized agency of the Executive Branch. This new agency will have legal standing, a patrimony of its own, and independence in its decision-making process, organization, and operations. This transitory provision also sets forth that the new agency will have a clear division between the Investigative Authority and the adjudicating body.
The internal structure of this new agency will be defined in the secondary legislation, and the new authority is expected to become operational 180 days after the legislation takes effect. However, the Reform does not establish a deadline for the Mexican Congress to enact the secondary laws, creating uncertainty about the exact date when the new antitrust authority will begin operations.
Until the new antitrust authority takes office, COFECE and the IFT will continue to operate, and the acts issued by these authorities prior to the Decree’s entry into force will remain fully valid and legally binding. The commissioners currently serving at COFECE and IFT will conclude their duties upon the official dissolution of these bodies.
Although the organizational structure and current legislation on economic competition remain in force, the 2025 budget approved for both COFECE and the IFT is two-thirds less than the requested amount, creating significant challenges for their operations.
Following the approval of the Reform, the IFT and COFECE have issued several press releases. On November 29, 2024, the IFT highlighted that its constitutional autonomy has enabled significant progress in the telecommunications and broadcasting sectors, resulting in improved services and affordable prices for users. The IFT also highlighted its accomplishments over 11 years of operation, including a reduction of more than 33% in telecommunications prices and substantial savings for consumers.
On November 29, 2024, and January 6, 2025, COFECE reaffirmed its commitment to ensuring an orderly and coordinated transition to the new antitrust authority. It emphasized its dedication to maintaining proactive dialogue with government agencies and implementing extraordinary measures to allocate resources effectively. These efforts aim to ensure the continuity of its powers and procedures until the secondary legislation establishes the new antitrust authority. Furthermore, COFECE advocates for a transition that upholds a robust economic competition authority and policy for Mexico.
Finally, both the IFT and COFECE have expressed their willingness to collaborate with the Mexican Congress in drafting the secondary legislation.