| | |  Business News 
Mexico Calderon Eyes Higher Fines, Jail for Monopolies
 Cyntia Barrera Diaz - Reuters
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April 16, 2010
 |  | A relatively compact but powerful group of family-run companies in Mexico controls industries ranging from cell phone services to beer making. |  | | |
Mexico City - Mexican President Felipe Calderon wants to impose fines of up to 10 percent of annual sales on companies found to be acting as monopolies under a plan he submitted on Monday to overhaul competition laws.
The proposal would toughen controls on companies in a country often criticized for a lack of competition.
The maximum fine for collusion under current laws is around 86 million pesos ($7 million), Eduardo Perez Motta, head of competition watchdog Cofeco, told reporters in a conference call.
"Higher sanctions mean ... companies will think twice before carrying on (with monopolistic practices)," he said.
Calderon's plan also includes up to 10 years of jail time for those found guilty of promoting these practices, Perez Motta added.
The president submitted his 10-point proposal to the lower house of Congress on Monday afternoon. It seeks to simplify the way investigations are conducted and would force companies to openly hand over information when they are the subject of a probe.
Companies subject to a probe will be given the chance to settle in a bid to cut the often lengthy investigations, Perez Motta said.
A relatively compact but powerful group of family-run companies in Mexico controls industries ranging from cell phone services to beer making. New companies find it tough to break into their turfs.
In the past, telecoms companies belonging to tycoon Carlos Slim, the world's richest man according to Forbes magazine, beverage giant FEMSA and cement maker Cemex have been probed by Cofeco because of the dominant positions they hold in their markets.
In February, Cofeco fined U.S. pharmaceutical Eli Lilly and Co and three other medical companies for colluding to inflate prices in Mexican government tenders for medicine.
These companies, which often make billions of dollars in annual sales, were fined $1.7 million each, the maximum allowed under the law at the time that the investigations began. The Mexican government strengthened its competition laws in 2006.
Calderon, who took office over three years ago, has promised to improve competition but progress has been slow.
($1 - 12.25 pesos)
(Additional reporting by Tomas Sarmiento. Editing by Robert MacMillan and Carol Bishopric)
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