Article 16 of the Mexican Constitution establishes the inviolability of private communication. A violation of this freedom and of privacy attracts criminal penalties. The only exceptions to this right are when one of the parties involved in the communications voluntarily provides them to the authorities, or when a judicial warrant is issued. However, article 16 expressly prohibits judges from granting judicial warrants that would allow administrative authorities to intercept private communications.
Currently, the interpretation of this and other legal provisions is generating considerable debate. As discussed below, opposing views regarding COFECE’s powers to intercept private communications prevail, primarily between COFECE’s Board of Commissioners and private antitrust practice in Mexico.
Given that dawn raids, by their nature, are such invasive procedures, the FCA establishes that a dawn raid must be ordered by, and substantiated by a warrant issued by, the head of the Investigative Authority of COFECE. The warrant must comply with certain requirements, including that: (i) it must comply with the FCA; (ii) must contain a factual basis (i.e., the specific circumstances that substantiate it being issued); (iii) the name of the undertaking to be visited and the address (domicile) at which the dawn raid will take place; (iv) its purpose; (v) the signature of the public official issuing the warrant; (vi) the names of the public officials authorized to conduct the dawn raid; and (vii) warnings about the implications of refusing to allow the dawn raid to be conducted.
Article 75 of the FCA contemplates these formalities and sets out the scope of the powers of the Investigative Authority when conducting a dawn raid. These powers include:
a. Access to any office, premises, computer, or any other device that may contain relevant information; and
b. The ability to reproduce or copy any document, file, or paper that may contain relevant information.
Considering the scope of the powers provided for in Article 75 of the FCA, when accessing documents, computers and other electronic devices, questions of privacy arise. While it is clear that public officials are entitled to access private communications (such as e-mails, instant messages, and physical mail), the question is whether the powers outlined in Article 75 allow COFECE to intercept, use, and/or disclose such private communications without the consent of the individuals concerned.
Furthermore, a consideration of the scope of COFECE’s powers to intercept private communications during dawn raids necessitates the consideration of the right of the individuals concerned to privacy of communications, as provided for in Article 16 of the Mexican Constitution. As mentioned above, there is a constitutional prohibition directed at authorities (in particular, administrative authorities), from intercepting, using, or disclosing private communications without consent being given (the exception being in criminal procedures in which interception is allowed if authorized by a judge in terms of a warrant).
This issue is currently under discussion, not only within the judiciary but also within the antitrust private practice in Mexico and inside COFECE’s Board of Commissioners. Given the constitutional prohibition and the absence of specific provisions in the FCA, differing interpretations of the scope of COFECE’s powers to intercept private communications have emerged, primarily between COFECE’s Board of Commissioners, on the one hand, and private antitrust practitioners in Mexico, on the other.
COFECE’s Board of Commissioners interprets the scope of the powers of COFECE’s Investigative Authority in a broader manner than private practitioners do. COFECE’s stance on the right to privacy of communications has been restrictive, particularly in cases such as the 2022 investigation into the gas industry, where COFECE argued that the right to privacy of communications only applies when the personal and private spheres of an individual’s life are at stake. Such an approach means that all e-mails and other communications which may contain business or commercial information, seized in a dawn raid, are not protected by the right to privacy of communication. Consequently, such communications could be used as evidence to establish liability for anti-competitive practices without violating the right to privacy of communications, even without the individual’s consent.
This interpretation was based on case law that originated from a precedent regarding the National Banking and Securities Commission (“NBSC”). However, it is important to note that the NBSC operates under a very specific and rigorous regulatory framework, making its precedent arguably unsuitable in the context of antitrust matters.
By contrast, a valid opposing argument is that the powers of COFECE’s Investigative Authority are far more limited than COFECE considers them to be, on the basis that the right to privacy of communications extends to all private communications, regardless of their content.
Such an interpretation is supported by the constitutional prohibition set out in Article 16, which states that COFECE’s Investigative Authority cannot intercept this type of communication while conducting a dawn raid without the consent of the relevant individual or individuals, given that a judicial warrant may not be issued to allow this as it is an administrative procedure. Also, it is important to note that this interpretation relies on case law, primarily criminal law, which is more suitable for consideration in the context of antitrust matters, given the similarities between the enforcement of criminal law and the enforcement of administrative law.
The debate in this regard reached the courts through an amparo procedure stemming from an investigation into the airline industry in Mexico. Although the amparo remains sub judice, it is interesting to note how the issue is being addressed by the judiciary. In the first instance of this proceeding, the judiciary favored the private practitioners’ interpretation, emphasizing the limitations of COFECE’s Investigative Authority’s powers and recognizing the right to privacy of all communications, regardless of their content.
Facing this challenge and the fact that this proceeding could impact dawn raids in Mexico significantly, COFECE requested the Supreme Court’s intervention. The Supreme Court accepted the request and is currently deliberating on this judgment. In short, the Supreme Court must determine whether the right to privacy on the part of an individual whose communications are seized outweighs the benefits that may come about as a result of COFECE’s investigations, which impact consumers, or vice versa. This decision will determine whether or not COFECE may seize private communications during its dawn raids without consent.
If the Supreme Court were to determine that COFECE has the power to intercept private communications when conducting dawn raids, this would mean that either this is not a violation of the right to privacy, or that a violation would be justified in terms of the proportionality test.
On the other hand, if the Supreme Court determines that COFECE does not have the power to seize private communications from computers or other devices during a dawn raid, this could hinder its ability to obtain important evidence in relation to market division or price-fixing between competitors, or other anti-competitive behavior, in circumstances where key data and information may reside in private communications and digital records. Obtaining evidence that reflects anti-competitive conduct, which harms consumers and hinders economic growth is an important objective. As such, a limitation on COFECE’s investigative powers could undermine the enforcement of competition law in Mexico, to the detriment of consumers and the economy.
Finally, it is important to note that the Supreme Court does not have the power to issue specific guidelines or regulatory provisions outlining a special procedure that could resolve the issues raised. Thus, in the absence of clear instructions on how COFECE should proceed while avoiding extracting private communications or handling such communications appropriately, the responsibility may shift to undertakings and their legal representatives to “negotiate” with COFECE on how to address this situation. Such an approach, in light of the privilege claim precedent, could be beneficial, as it empowers undertakings to have a voice and to actively participate in shaping the outcome of future investigations.
Allowing undertakings to express their opinions and collaborate with COFECE in finding mutually agreeable solutions may foster a more cooperative and transparent regulatory environment. It promotes a sense of fairness and ensures that the unique circumstances and perspectives are taken into account in each case. Nevertheless, in order for this approach to be successful, it is essential that such “negotiations” follow established legal principles and incorporate safeguards to maintain the integrity of competition policy enforcement and protect the interests of consumers and the overall economy.
