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Jurisdiction does not produce any actual negative effect. Therefore, non-written or tacit
agreements relating to illegal conduct are also caught by the rules.
5 What is the test for determining whether a vertical restraint
will be subject to antitrust law in your jurisdiction? Has the Parent and related-company agreements
law in your jurisdiction regarding vertical restraints been
applied extraterritorially? Has it been applied in a pure 11 In what circumstances do the vertical restraints rules apply
internet context and if so what factors were deemed relevant to agreements between a parent company and a related
when considering jurisdiction? company (or between related companies of the same parent
company)?
Considering that consumer welfare is the ultimate purpose underlying
competition regulation and policy, any RMP or vertical restraint having or In order for a vertical restraint to apply and be deemed illegal, no economic
intending to have an impact thereon will be subject to the Commission’s interest shall be shared among the parties involved, otherwise they may be
scrutiny, regardless of where it is taking place or the nationality of the par- considered to be a single economic agent or an economic interest group,
ties involved, as long as it has an impact on Mexican customers. for instance when a parent company dictates the resale price to a subsidi-
ary or an affiliate company. Even under a franchise model the Commission
Agreements concluded by public entities has ruled that the identity of economic interest pursued by the franchisor
and the franchisee will exclude them from engaging in illegal conduct for
6 To what extent does antitrust law apply to vertical restraints a market allocation or resale price maintenance. An economic interest
in agreements concluded by public entities? group, which is a more relevant definition than related company for com-
petition purposes in Mexico, exists when a group of individuals or legal
Public entities at any level – federal, state, or municipal – are expressly sub- persons with commercial and financial consonant economic interests
ject to the Competition Law, precisely in order to avoid any misconception coordinate their activities to achieve a common objective. Other elements
as to its scope. However, the public entity must be acting in the capacity of may occur such as control, autonomy and unity in their market behaviour.
private law entity, meaning by doing commerce or trade acts with private Such control may be actual from a controlling firm over its subsidiaries, or
parties, and not acting as an authority enforcing any law or regulation it is latent when its exertion is potential through persuasive measures, even
empowered to apply. when there is no centralised or legal link. Therefore there must be analysis
as to whether any person may directly or indirectly coordinate the activi-
Sector-specific rules ties of others to operate in the market and to exert decisive influence or
control over the others.
7 Do particular laws or regulations apply to the assessment of
vertical restraints in specific sectors of industry (motor cars, Agent–principal agreements
insurance, etc)? Please identify the rules and the sectors they
cover. 12 In what circumstances does antitrust law on vertical
restraints apply to agent–principal agreements in which an
No particular laws or regulations apply to the assessment of vertical undertaking agrees to perform certain services on a supplier’s
restraints in specific sectors. With the recent creation of IFT, it is reason- behalf for a sales-based commission payment?
able to expect that some laws or regulations in this regard will be issued,
applicable to broadcasting and telecommunications activities, including of Criteria for agent–principal agreements are much the same as for related
course any prohibited vertical restraints. companies (see question 11). However, an agent following a principal’s
instructions derives its relationship from an independent economic inter-
General exceptions est, whereas the agent bears the very same interest as the principal, acting
as its representative.
8 Are there any general exceptions from antitrust law for
certain types of agreement containing vertical restraints? If However, should the principal be a dominant firm using its agent in
so, please describe. order to engage in illegal conduct, then both may be held liable. In other
words, the agent may not have market power, which is a requirement for
There are no general exclusions or exemptions under the Competition engaging in infringing conduct, but still may refuse to deal with a third
Law. party or discriminate against it. Therefore, since it is acting on behalf of a
principal who may be abusing its market dominance, a vertical restriction
There are exceptions for some specific activities that are under- may take place through the vertical agreement entered into between the
taken by federal government entities and considered to be strategic, legal agent and a third party downstream.
monopolies under the Competition Law. However, this does not mean that
federal entities carrying out these activities are completely exempt from 13 Where antitrust rules do not apply (or apply differently) to
the scope of the Competition Law. For example, Petroleos Mexicanos, the agent–principal relationships, is there guidance (or are there
state oil company solely in charge of upstream activities, is still subject to recent authority decisions) on what constitutes an agent–
the Competition Law should it attempt to restrict supply sources, impose principal relationship for these purposes?
tying arrangements or refuse to deal or carry out other similar practices in
downstream markets. There is no guidance provided in the Competition Law on what constitutes
an agent–principal relationship.
Agreements
Intellectual property rights
9 Is there a definition of ‘agreement’ – or its equivalent – in the
antitrust law of your jurisdiction? 14 Is antitrust law applied differently when the agreement
containing the vertical restraint also contains provisions
There is no such definition in the Competition Law. However, this is where granting intellectual property rights (IPRs)?
the Federal Civil Code provides a definition of such general terms. So an
agreement is the concurrence of wills by two or more parties in order to Whereas it is quite common to have several restrictions in agreements
create, transfer, modify or to extinguish obligations. An RMP may take involving IPRs, the question is whether such restrictions are in place in
place not only by an agreement or contract but also by a unilateral act, or order to legitimately protect such rights. In other words, the IPR-holder
combination of different firms with a purpose or effect of engaging in anti- may not abuse the exclusiveness granted thereby by requesting, for
competitive conduct. instance, a licensee to do certain things beyond the rightful protection of
his rights. Thus exclusivity in order to maintain quality, or definition of the
10 In order to engage the antitrust law in relation to vertical specific territory where the product or service may be offered, in order to
restraints, is it necessary for there to be a formal written maintain service levels, may call for a different analysis from the competi-
agreement or can the relevant rules be engaged by an tion point of view. Therefore, as long as there is a valid business reason
informal or unwritten understanding? behind restrictions involving IPRs, and efficiencies resulting from the
restriction are demonstrated, a different analysis and application of the
Competition law in Mexico applies both to formal and informal agree- Competition Law will be given.
ments. An objective or intention to engage in illegal conduct is enough to
constitute a violation of the Competition Law and its regulations, even if it

148 Getting the Deal Through – Vertical Agreements 2015
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