Issues related to competition laws


The regulatory framework governing transportation, telecommunications, natural gas and the system of saving for retirement, includes specific measures that contribute to facilitate and strengthen the development of the process of competition and free access in its field of application. This objective is envisaged in the application of the Federal Law of Economic Competition (FLEC) together with the verification by the Commission that there exist conditions of effective competition in the light of this legislation.

The Commission exercises concrete powers established in the Ports Act; Highways, Bridges and Federal Vehicle Transportation Act; Navigation Act; Railroad Services Regulatory Act; Regulatory Act on Constitutional Article 27 in the Branch of Oil; Civil Aviation Act; Federal Telecommunications Act and Airports Act and in the Systems of Saving for Retirement Act Decree.

The Commission interprets and applies the precepts of competition legislation when dealing with the following areas:

- Market share. The Federal Telecommunications Act envisages the establishment of obligations for concessionaires of public networks holding substantial market shares in tariffs, quality and information.

The Satellite Communications Regulation and the local Telephone Rules give the Commission the power to fix the market share of the economic agents that participate in the sector and the power to issue opinions on the aspects of competition inherent in all administrative acts.

- Effective competition. The Commission must determine that there is an absence of conditions of effective competition for sectorial authorities to be able to establish tariff bases or regulations in railroad, air, airport, shipping, port and highway transportation services and in the first-hand sales of natural gas and in the services that distribute, commercialize, transport and store this product. The Commission must rule that there exists effective competition for such regulations to be lifted.

- Concessions and permits. Participation in bidding processes for concessions to use the radio spectrum, exploit satellite orbits and provide railroad services require, in accordance with the respective sectorial legislation, a favorable ruling parties by the Commission. In general terms, the Natural Gas regulation establishes that parties interested in obtaining permits to distribute, transport, store and commercialize natural gas must declare their intention to the Commission. In accordance with the same regulation, participants in bidding processes for natural gas distribution permits must obtain a favorable ruling by the Commission.

The granting of concession, permits, authorizations or licenses to provide air and highway transportation services, and to participate in the ports sector, must comply with effective competition provisions and criteria, in accordance with the applicable sectorial legislation. These provisions have been implemented in the ports sector by means of bidding processes for concessions and permits, and the creation of facilitates for coordination with the Commission.

Where the granting of air and highway transportation concessions is concerned, the Commission has not been consulted on the effective competition criteria applied. However, it has issued general opinions on the aspects of competition of these procedures in civil aviation. Likewise, it has issued recommendations on particular cases that have arisen in vehicle transportation. Transparency in these procedures is particularly necessary in air services, given the characteristics and structure of their markets.

- Cession of concessions and permits. Transactions of this type involving railroad services and services to distribute, transport and store gas must be reported to the Commission. The same provision applies to the cession of public network and radio spectrum concessions, when the grantor and the grantee coincide in the same zone.

The procedure of privatization established in the Inter-Ministerial Divestiture Commission (IDC) envisages the reporting of the participation of economic agents in bidding processes for public enterprises and assets. Since 1993, the disincorporated enterprises develop these procedures rapidly and in accordance with the FLEC provisions on concentrations.

The work carried out was performed in the context described. With its efforts the Commission has established a close coordination with the regulatory authorities that has pervaded most of the aspects where there is a relationship among their respective responsibilities. This has helped to avoid anticompetitive situations and excessive accumulation of market share, and to guarantee entry and development of competitors.