The Competition Authority of Kenya (CAK) is seeking a nod from the parliament to amend some of its laws in response to emerging issues in the market, including expanding its oversight on abuse of buyer power and allowing public participation in proposed mergers.
- The authority has developed a draft competition bill after review of existing provisions and considering enforcement experience and international best practices.
- Key areas the bill seeks to amend touch on abuse of buyer power, mergers, criteria of determining dominant position, and clarity on failure to comply with an order among others.
- If amended, the authority will have powers to appoint a receiver and attach property to recover from a person any amount payable under the penalty notice which remains outstanding.
A recommendation in the bill, known as the competition (amendment) bill 2024, seeks to delete the words ‘abuse of buyer power’ and replaces it with the words ‘abuse of superior bargaining position’.
Those found culpable shall on conviction be liable to imprisonment for a term not exceeding five years or to a fine not exceeding Ksh10 million or to both.
The bill says a conduct that amounts to abuse of superior bargaining position includes delays in payment of suppliers without justifiable reason in breach of agreed terms of payment, unilateral termination or threats of termination of a commercial relationship without notice or on an unreasonably short notice period, unilateral variation of contractual terms, transfer of costs to a counterparty, and the transfer of commercial risks meant to be borne by a party to the counterparty.
Other elements of abuse of superior bargaining position include demands for preferential terms unfavorable to the counterparty, imposing purchase prices below competitive levels or service fees above competitive levels, unreasonable collection of data of the counterparty, imposing unduly difficult conditions for the termination of service and obstruction of business activities or interference in the counterpart’s management of its business.
“The Authority may where it establishes that a sector or an undertaking is experiencing or is likely to experience incidences of abuse of superior bargaining position, monitor the activities of the sector or undertaking and ensure compliance by imposing reporting and prudential requirements,” the CAK proposes in the amendments.
CAK may also develop a code of practice, impose reporting requirements and regulations to ensure compliance especially where the authority determines that a sector is experiencing incidences of abuse of superior bargaining position.
The draft laws would expand the public’s participation in proposed merges, as the new bill allows the competition authority to invite the public to give information on the proposed deals.
Read the whole bill here.
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