To amparo or not to amparo?

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José Alberro, director at Berkeley Research Group in California, examines stock market punishment and enforcement of the Mexican Federal Competition Commission decisions

In the Mexican legal system, the recurso de amparo (or juicio de amparo, or amparo) is a remedy for the protection of constitutional rights. Introduced in the mid-nineteenth century, an amparo is an injunction or stay of action that suspends the effects of an act of authority until the merits of the case are litigated.

Companies have used amparos to challenge Mexico’s Federal Competition Commission (CFC) resolutions for 20 years. For the past two decades, the CFC’s decisions have been suspended pending conclusion of the appeal process, which may take many years and thus limit effectiveness. Amparos have come to be identified as significant obstacles to the CFC’s authority. A recent Organisation for Economic Co-operation and Development report laments that while the CFC repeatedly demonstrated its willingness to confront and aggressively apply the law to powerful companies, the cascade of judicial challenges to CFC decisions rendered it powerless. A World Bank report affirmed that powerful interests have used the amparo to hold legal decisions at bay for years pending appeal. As a result, some observers have argued that large companies are more likely to engage in monopolistic practices and, if sanctioned, they are more likely to obtain amparos to escape enforcement.

Originally published on the the Global Competition Review Website - April 8, 2013.

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