Cofece fines Infra and Cryoinfra

Mexico‘s Federal Economic Competition Commission (Cofece) informed that it fined Infra and Cryoinfra for failing to comply with commitments acquired to restore competition in the industrial oxygen, nitrogen and liquid argon markets.

The Plenary of the Cofece imposed fines totaling 296 million 323,915 pesos to both companies for failing to comply with those commitments, which were established on the occasion of the request for the early closing of case DE-006-2014 and accumulated, for the possible performance of relative monopolistic practices.

In April 2014, the Investigating Authority initiated an investigation derived from a complaint for the possible participation of various economic agents in acts, contracts or agreements with the purpose or effect of unduly displacing their competitors or preventing their access to the market.

Specifically, the markets in which the probable anticompetitive conducts were investigated were the distribution and commercialization of oxygen, nitrogen and industrial liquid argon in bulk by means of cryogenic pipes unloaded in a cryogenic container at the customer’s domicile, with a regional geographic dimension.

Infra

Oxygen, nitrogen and liquid argon serve as inputs in the production of other goods and are used in various industries, e.g. aerospace, aviation, automotive, food, chemical, oil and gas, metallurgy, pharmaceuticals and biotechnology, refining, water treatment and/or in welding and metal fabrication.

Through the use of the instrument provided in the Federal Economic Competition Law (LFCE) of 1992, Infra and Cryoinfra requested in 2018 the anticipated closing of the proceeding followed in the form of a trial, for this purpose they presented to the Plenary of the Commission several commitments to suppress the investigated conduct and restore the process of competition and free concurrence, which were accepted.

However, as a result of the verification process, it was evidenced that the economic agents failed to comply in a generalized manner with several of the commitments assumed. This violated the verification process and the corrective effect of the resolution of the Plenary to restore competition in the markets.

Infra and Cryoinfra failed to comply with the obligations of the agreed commitments by untimely submitting or not submitting the information related to the verification process, as well as by not modifying the current contracts to eliminate the exclusivity clauses or the automatic renewal of the contracts for more than one year.

Sanctions

The Plenary resolved the non-compliance by Infra and Cryoinfra and imposed fines of 296 million 323,915 pesos.

In addition, it granted them a term of 45 business days from the date of notification of the resolution to prove compliance with all commitments. Otherwise, they may be fined up to the equivalent of 1,500 times the daily value of the Unit of Measurement and Actualization for each day that elapses without complying with the order.