Mexico wants to fuse its antitrust regulators into one… How could it help (or hurt) startups in Mexico?

Contxto – In an effort to save the federal government some mullah, last Wednesday (10), Mexican Senator Ricardo Monreal proposed that three agencies be merged.

These institutions are: The Federal Commission for Economic Competition (Cofece), the Federal Telecommunications Agency (IFT), and the Commission on Energy Regulation (CRE).

With their powers combined, Monreal proposes the launch of a new agency dubbed the National Institute for Markets and Competition for Welfare (INMECOB).

Besides possessing an excessively long name, this new organization would regulate fair competition and snuff out antitrust practices within the telecoms and energy industries of Mexico.

The INMECOB would be an independent organization and would answer to the country’s legislative branch. Likewise, it would consist of internal independent bodies that would handle particular topics. Lastly, five consultants would constitute the INMECOB’s plenary assembly.

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What’s to love

If we’ve learned anything about Uber’s struggle to acquire Cornershop, it’s that having two Mexican bodies (the IFT and Cofece) fighting to determine who will regulate the deal was a troublesome obstruction. 

If there had been a single entity, the Chilean-Mexican startup wouldn’t have had to put up with that time-consuming quarrel.

• Related article: Cornershop’s struggle with Uber acquisition: Chile approves the union, only Mexico’s verdict to go

From this, it could be hypothesized that review processes for other startup-related mergers and acquisitions could be more efficient. I know… One too many “could bes” in a single sentence…

Anyway, the industries the INMECOB would address do share some common ground: the intensive use of infrastructure and the low number of players within the market, for example. So members of this institution might be able to cross-address these industries.

What’s to hate

Senator Monreal’s intention through the mix is to save money. Meaning government efficiency and accuracy aren’t so much a concern for his proposed INMECOB.

Moreover, a governmental institution with a lower budget doesn’t automatically mean that bureaucrats will be more efficient. If anything it may mean processes could become slower.

The IFT and Cofece may occasionally run in the same circles but adding the CRE—an institution that oversees the energetic sector—sticks out like a sore thumb within this threesome.

One think tank, México Evalúa, was concerned that this measure may centralize decision-making power as well as water down its expertise.

What’s next for the IFT, Cofece, and CRE?

The President of Mexico approves of the senator’s proposal. 

Nonetheless, creating a constitutionally autonomous agency like the INMECOB would require legislative approval. So Senator Monreal will have to convince other Mexican legislators—the majority of whom belong to his party—that his proposal is worth it.

But what do you say? Yay or nay?

Related articles: Tech and startups from Mexico!

-ML

Correction: A previous version of the headline of this article stated that “Mexico has fused its antitrust regulators”, that has in fact not happened yet.