MEXICO CITY — Mexico’s Senate on Thursday approved changes in the country’s competition law that will give the regulator greater powers and increase penalties for companies and individuals found engaging in monopolistic practices.

The Senate voted 91-0 in favor of the bill, which was also unanimously approved two weeks ago by the lower house of Congress.

The changes in the law are aimed at giving the Federal Competition Commission, or CFC, increased powers to investigate and impose sanctions for anticompetitive practices. The CFC welcomed the passage of the bill, saying in a statement that the amended law will bring benefits to consumers and greater competition to the economy.

The original bill, submitted a year ago by President Felipe Calderon, underwent several changes during its passage through the Congress. Mr. Calderon is expected to sign the bill into law.

In presenting the bill last year, Mr. Calderon cited estimates that 30% of household spending in Mexico is made in markets that have problems with lack of competition, and that as a result Mexicans pay about 40% more than they would if there were more companies offering those services under more competitive conditions.

Mexico is considered to be deficient in terms of competition in a number of industries that are dominated by a couple or a handful of players. They include telecommunications, television broadcasting, cement and brewing.

The CFC said the amended law increases the maximum fine for monopolistic practices to 8% or 10% of annual revenue, depending on the kind of practice, without it needing to be a repeat offense. It also establishes prison sentences from three to 10 years for individuals convicted of “absolute monopoly practices,” such as forming cartels or price-fixing among competitors.

It allows the CFC to conduct surprise visits to premises when carrying out investigations, as long as the information collected is relevant to matters of competition.

The bill also makes changes affecting commission procedures, including speeding up notifications on proposed mergers and allowing for out-of-court settlement of antitrust cases.

Earlier this month, the CFC fined Telcel, the local mobile unit of telecommunications giant America Movil SAB, around $1 billion on grounds that it uses its market weight and high interconnection charges to displace competitors. The commission said it applied the maximum fine because it was a repeat offense. Telcel plans to appeal against the ruling, and denies that it is a repeat offender.

Source: online.wsj.com