Mexico's digital economy has grown at a pace that existing legislation was not built to handle. Regulators have responded. A new wave of digital services regulation now imposes direct compliance obligations on technology companies operating in or providing digital services into Mexico. obligations that carry real consequences for those who fail to act before the applicable deadlines.
Mexico's evolving digital services regulatory regime introduces mandatory requirements for technology companies covering algorithmic accountability, software liability, and technology licensing. Companies providing digital services to Mexican users – regardless of where they are incorporated – must assess their exposure and complete initial compliance steps within 90 days of the regulatory measures entering into force. Failure to act risks administrative sanctions, service suspension orders, and reputational harm in one of Latin America's largest technology markets.
This alert identifies which business categories are affected, what the threshold criteria are, and what immediate actions international companies should take now.
What has changed and when it takes effect
Mexico's federal legislature and regulatory authorities have advanced a package of measures targeting digital services. The changes build on existing consumer protection and telecommunications legislation. They extend into new territory: algorithmic accountability, data-driven recommendation systems, and digital intermediation.
The core legislative development introduces a defined category of servicios digitales (digital services) subject to supervision by Mexico's federal consumer protection authority. Procuraduría Federal del Consumidor (PROFECO), as well as the telecommunications regulator, Instituto Federal de Telecomunicaciones (IFT). The measures draw on and expand obligations already present in Mexico's tax legislation and electronic commerce rules, which previously addressed digital service providers for value-added tax purposes. The new layer addresses conduct, not merely tax collection.
The effective date for primary obligations is aligned with secondary regulatory instruments expected to be published in the Diario Oficial de la Federación (Official Gazette of Mexico). The compliance window for affected entities runs 90 days from publication. Companies that have not begun their internal assessment cannot realistically complete it within that window without dedicated legal and technical support.
Secondary rules on software liability. addressing responsibility for defects in digital products and automated systems. are expected to follow within six months of the primary measures. Creating a rolling compliance horizon through the remainder of 2025 and into 2026.
Who is affected and what the threshold criteria require
The new rules apply to any entity that provides digital services to users located in Mexico. Physical presence in Mexico is not required for the obligations to bite. The threshold criteria are service-based, not entity-based.
Affected business categories include:
- Online intermediation platforms connecting buyers and sellers of goods or services
- Search engine and content recommendation systems deployed to Mexican users
- Software-as-a-service providers whose tools are used by Mexican businesses or consumers
- Cloud infrastructure providers offering services to Mexican enterprises or public bodies
- Digital advertising networks operating in the Mexican market
The threshold criteria for the most demanding obligations – including algorithmic transparency reports and technology licensing disclosures – apply to providers that exceed a defined scale of users or transaction volume in Mexico. Practitioners advising in this area note that the thresholds are set at a level that captures most mid-size and large international operators. Smaller providers face a lighter set of requirements but are not excluded from the regime.
For companies in scope, the following obligations apply from the compliance deadline:
- Registration with the relevant federal authority
- Publication of terms of service in Spanish that comply with consumer protection legislation
- Disclosure of algorithmic ranking and recommendation criteria in accessible language
- Designation of a legal representative resident in Mexico for regulatory correspondence
- Maintenance of records sufficient to demonstrate compliance with software liability standards
A non-obvious risk for international groups is the extraterritorial application. A company headquartered in the United States or Europe that provides a business-to-business software tool used by a Mexican subsidiary of a multinational may be caught. The rule looks at where the user is located, not where the contract is signed. Groups that assumed their Mexican exposure was covered by their parent entity's compliance programme should re-examine that assumption now. For a parallel perspective on how digital services obligations are developing in adjacent markets, see our alert on digital services regulation developments in the United States.
To receive an expert assessment of your company's exposure under Mexico's digital services regulatory regime, contact us at info@ferrazwhitmore.com.
Immediate actions for international companies
The 90-day compliance window is short. International companies should treat the following as priority actions.
First: map your Mexican user base. Determine whether your services reach users in Mexico – directly or through intermediaries. This mapping exercise drives every subsequent step. If you cannot confirm the answer within days, the compliance risk is already materialising.
Second: assess threshold applicability. Once you have confirmed a Mexican user base, assess whether your volume crosses the threshold for enhanced obligations. Under Mexico's digital services legislation, this calculation requires both a user-count analysis and a transaction or revenue component. Legal counsel familiar with the applicable rules is essential here, as the methodology is not self-evident from the primary text alone.
Third: review your terms of service. Mexico's consumer protection legislation requires that terms of service for digital products be in Spanish and meet specific clarity standards. Many international companies use terms drafted for English-speaking markets. A translation is necessary but not sufficient – the terms must be restructured to meet local requirements.
Fourth: identify and appoint a local representative. The requirement to designate a resident legal representative is a hard administrative prerequisite. Without one, registration cannot be completed. Appointing a qualified representative takes time. Starting this process in week one of the compliance window, rather than week eight, is strongly advisable.
Fifth: prepare your algorithmic accountability documentation. For companies using recommendation engines, ranking algorithms, or automated decision systems directed at Mexican users, the new rules require accessible disclosure of how those systems work. This is a substantive exercise. It requires collaboration between legal, product, and engineering teams. Companies that have already addressed AI Act compliance obligations in European markets will find the methodology familiar – but the Mexican regulatory vocabulary and disclosure standards differ in important respects.
Companies with intellectual property assets embedded in their digital services – software, databases, branded interfaces – should also review their intellectual property protection position in Mexico as part of this compliance exercise. Technology licensing arrangements may need to be updated to reflect the new software liability rules.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising technology companies, digital platforms, and multinational businesses on legal matters across 46 jurisdictions. Our AI and technology law practice in Mexico covers digital services regulation, algorithmic accountability, software liability, and technology licensing for companies entering or expanding in the Mexican market. As a law firm advising international clients in Mexico and across the Americas, we help businesses build compliant digital services operations from the ground up. Our team combines civil law expertise with cross-border regulatory experience, supporting in-house legal teams who need a lawyer in Mexico with an understanding of international compliance frameworks. To discuss how these regulatory changes affect your business, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.