The Competition Authority of Kenya (CAK) resolved most of the 82 cases of abuse of buyer power it flagged in the year ending June 2024, helping suppliers recover KSh 89.52 million in delayed payments.
- •According to CAK, the recovery rate was 97% higher than in FY 2022/2023 due to iterated regulatory frameworks and improved stakeholder engagement.
- •38% of the cases of abuse of buyer power were in the finance sector, which was significantly higher than other sectors.
- •About 668 consumers that year lodged cases with the authority mostly complaining about services in the financial sector, and in the wholesale and retail trade sector.
“Complaints relating to delayed payments were the highest, contributing to 76.24% of the total complaints. Other conducts investigated included unilateral termination of contract, demand for preferential terms, transfer of costs, unilateral variation of contract terms, transfer of commercial risk, demands for preferential terms, and reducing prices by a small but significant amount where there is difficulty in substitutability of alternative buyers, each accounting for 5.94% of the matters, respectively,” CAK notes in its annual report.
The anti-trust authority intervened in a case between Occidental Insurance Company and Mash Auto Garage, facilitating the settlement of over KSh 8 million in delayed payments. Another case was between ICM SPA Ltd and Flamingo Networks, which saw the settlement of US$313,343.
Cartels, and the Growing Angst with Digital Lenders
The regulator investigated 73 cases involving Restrictive Trade Practices that year, with 42 cases being coordinated cartel conduct and 25 being abuse of market dominance. It fined nine steel manufacturing companies KSh 338.8 million for price fixing, which saw consumers pay higher prices for their products.
Complaints in the finance sector were mainly against digital lenders and microfinance institutions. This sector as a whole had the highest year-on-year increase with many of the cases being about false and misleading representations and unconscionable conduct.
CAK received 63 cases against digital lenders, up from 16 the previous year, continuing an upward trend that is driven by the rapid growth of the sector. Complaints against the Microfinance sector have declined, and now account for 29% of consumer welfare case while complaints against banks have increased marginally.
“Generally, there has been an upward trajectory in the number of complaints relating to digital credit concerning exorbitant interests, lack of disclosure of Terms and Conditions (T&Cs), unilateral alteration of T&Cs, aggressive and harsh loan recovery methods, including harassment of customers’ mobile phone contacts,” CAK says.
The competition watchdog CAK reviewed 107 merger notifications that year to assess how acquisitions will skew the market. The Manufacturing sector accounted for 34% of the propositions, followed by distribution and logistics at 15%, and Finance & Insurance at 10%.
