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  • General Questions Open or Close

    What Is Competition?
    Competition is the rivalry of firms for customers, market shares and profits. They compete to offer greater value to customers by offering them the most favourable terms in comparison to others. Competition can be fair or unfair. When firms leverage superior technology, human resource capacity, have the ability to innovation, it will be able to produce more for less. Such a situation also results in firms developing new products, services and technologies to attract consumers. Competition will therefore results in: lower prices, improved choices, higher quality and ease of access to products and services.

    What Is Competition Law?
    Competition law is an instrument that aims to protect the process of competition and not competitors. It is a set of rules geared towards curbing anti-competitive business practices (ACPs). It is intended to level the playing field to have a situation where markets are contestable and players can enter and exit at will depending on their performance. A competition law is a sub-set of Competition Policy. The provision of the Competition Law sets up the Competition Authority of a particular country.

    What Is Competition Policy?
    Competition Policy is the commitment made by a national government to promote competition in all sectors of the economy. It is an aggregate of different sets of policies aimed at creating an enabling environment for trade, competition, economic growth. The arsenal that constitutes competition policy include: trade policy, industrial policy, investment policy, public procurement policy, etc. Under normal circumstances, a competition law should derive from the provisions of a competition policy. Interestingly, many countries have a competition law, but do not have a competition policy.

    What Is A Competition Authority?
    The provisions of the Competition Law serve to establish the competition authority of a country. The competition authority is the structure put in place to regulate anti-competitive business practices and to advocate for fair markets that deliver superior value to customers, producers and investors.It has investigative functions (that is what Competition  Commissions do) and sometimes adjudicative functions (that is the role assigned to Competition Tribunals). Competition Authorities also perform the function of competition advocacy with a view to promoting a healthy competition culture.

    What Is The Role Of A Competition Authority?Why Do We Need Competition Authorities?
    Competition authorities receive complaints pertaining to suspected breaches of the prohibitions of restrictive agreements; undertake investigations; authorize the gathering of information required for assessment of cases; conduct hearings; publish decisions on cases; determine what penalty or remedy is appropriate; monitor compliance with a penalty or remedy; publish, promote and advertise the provisions of the Act and the activities of the commission.
    They also act as advocates for competition; undertake general studies on the effectiveness of competition in individual sectors of the economy; collect information for the performance of the commission’s functions and perform other functions imposed by legislation.

    How Does Competition Authority Protect The Consumer?
    By regulating market conduct, both unilateral and concerted. This is aimed at ensuring, among others, that: prices are determined by forces of supply and demand; dominant firms do not abuse their positions for example by barring new entrants, pricing unfairly and refusing to deal, and; competitors do not share markets/territories. Nonetheless, the Authority shall be exempting certain indispensable restrictive practices aimed at increasing our exports, enhancing efficiency in production and maintaining quality of services.
    The Authority is developing relevant guidelines to ensure transparency, predictability and certainty in the exemption process. In addition, the Authority is mandated to prohibit: mis-leading/deceptive advertising and unconscionable conduct and ensure that consumers are compensated in regard to detriment, economic or physical, occasioned by condition of goods. The Authority will profile the consumer lobby organizations in order to build coalitions to facilitate enforcement of the consumer protection provisions.

    What Are The Penalties Of Flouting Competition Laws?
    Depending on the crime, one could face a fine of up to Kshs. 10 Million, or 5 years in jail or both. In some instances, administrative penalty can be executed.

    What Else Is The Competition Authority Mandated To Do?
    The Authority has the primary jurisdiction in regard to competition and consumer welfare matters in the economy and is the Government’s advisor on competition matters. It shall also be studying government policies, procedures and legislation to assess their effects on competition and consumer welfare. All mergers/acquisitions shall require the Authority’s authorization before they are consummated.
    This is aimed at ensuring that the transaction does not lead to concentrated market structures with ramifications on the competition process.
    However, to create predictability and certainty to the business community, the merger evaluation process is time-bound. Also in case of disapproval, the Authority is expected to publish the reasons.
    The Authority has already published the market definition guidelines, merger applications and withdrawal forms and it will soon publish the merger filling fees and threshold guidelines. These guidelines and regulations are intended to enhance predictability and certainty while also minimizing the transaction costs.

    What Are Some Of The Cases The Competition Authority Is Handling At The Moment?
    The Authority currently is carrying out investigations in Pay-TV; Mobile Money Transfer; Shipping lines; carbonated soft drinks and Insurance industry.
    We are also undertaking various market inquiries including in Banking; Artificial Insemination; seed and Tea Sectors. Moreover, we are conducting a Product Market Indicative Study aimed at identifying legislation that may be impeding competition in some specific sectors.

    What Are Your Successes?
    Specifically, the Authority has so far analyzed and determined 75 merger applications on time; 3 exemptions applications, and; 17 anticompetitive investigations, in various sectors, are in the final stages. In addition, we have developed various guidelines relating to market definition; public policy criteria test in merger analysis, and; exemptions guidelines;
    undertaken various advocacy activities, targeting trade associations; legal firms and sector and economic wide regulators. More so, the Authority has been sponsoring various initiatives targeting practitioners and stakeholders.
    These include Competition courses for practitioners and also Workshops in regard to regional competition laws.

  • Merger Filing Open or Close

    Who Should File The Merger?

    According to the Competition Act No 12 of 2010, Each of the undertakings involved in a transaction shall notify the Authority in writing or in the prescribed manner.

    How Much Does It Cost To File For A Merger?

    The Merger Filing Fees is based on the combined turnover or assets of the merging parties in Kenya, whichever is higher. The fee is in Kenya Shillings and is as follows:-

    Thresholds (KShs)

    Fees per proposed merger (KShs)

    500 Million -1 Billion

    0.5 Million

    1 Billion -50 Billion

    1 Million

    50 Billion and above

    2 Million

    How Do I Notify The Competition Authority Of A Merger?

    A merger filing must include a dully filled Merger Notification form including:-

    1. A complete list of shareholders and their respective shareholding, for the acquiring and target undertaking and of any undertaking that directly or indirectly controls the acquiring undertaking;
    2. The products that the parties deal in, and
    3. Strategic documents of the merging parties in relation to the affected markets including, but not limited to, the following: Business plans, marketing documents, high-level strategic presentations and board minutes.

    The forms may be hand delivered to the Competition Authority’s Registry or may be e-mailed or posted.

    As a confirmation of receipt of the documents, the date of receipt will be issued to the notifying party.

    The Merger filing fees must be remitted into the following Competition Authority of Kenya bank account:-

    Account Name: Competition Authority of Kenya
    Bank: Kenya Commercial Bank
    Branch: KICC Branch
    Account No: 1136286179
    Bank/Branch Code: 01104

    The Application should then be accompanied by proof of payment to the above bank account and shall be in Kenya Shillings.

    Where Do I Obtain The Merger Forms?

    The Merger notification forms can be obtained in the following manner:
    1. On the Competition Authority’s website at www.cak.go.ke.
    2. At the Competition Authority’s offices.

    What Would The Authority Consider To Be A Complete Merger Filing?

    In order to ensure that the parties provide a full and complete filing, the Authority proposes the following requirements as constituting a complete merger filing:

    • Duly filled Merger Notification forms by all parties;
    • Merger Agreement including a copy of the Sale Purchase Agreement and the shareholder’s Agreement;
    • Board Minutes, Reports and presentations of the Acquiring undertaking;
    • Board Minutes, Reports and presentations of the Target undertaking;
    • Annual financial statements for the preceding three years – Acquiring undertaking;
    • Annual financial statements for the preceding three years – Target undertaking;
    • Current business plans – Acquiring undertaking;
    • Current business plans – Target undertaking;
    • Claim for confidentiality– Acquiring undertaking;
    • Claim for confidentiality-Target undertaking ; and
    • Evidence/proof of remittance of the fees;
  • Consumer Welfare Open or Close

    Who Is A Consumer?

    A consumer refers to a natural person or a corporate body.

    What Are Consumer Rights?

    • These include the right to satisfaction of basic needs - To have access to basic, essential goods and services: adequate food, clothing, shelter, health- care, education, public utilities, water and sanitation.
    • The right to safety - To be protected against products, production processes and services which are hazardous to health or life.
    • The right to be informed - To be given the facts needed to make an informed choice, and to be protected against dishonest or misleading advertising and labelling.
    • The right to choose - To be able to select from a range of products and services, offered at competitive prices with an assurance of satisfactory quality.
    • The right to be heard - To have consumer interests represented in the making and execution of government policy, and in the development of products and services.
    • The right to redress - To receive a fair settlement of just claims, including compensation for misrepresentation, shoddy goods or unsatisfactory services.
    • The right to consumer education - To acquire knowledge and skills needed to make informed, confident choices about goods and services, while being aware of basic consumer rights and responsibilities and how to act on them.
    • The right to a healthy environment -To live and work in an environment which is non-threatening to the well-being of present and future generations.

    What Is The World Consumer Rights Day (WCRD)?

    WCRD is a day set aside by the international consumer community to influence debate on consumer protection issues by highlighting consumers' concerns and urging both national governments and international organizations to take meaningful action.

    Why Is Consumer Protection An Important Agenda For Governments?

    Ensuring the welfare of consumers is an important concern for governments because the quality of life of its citizens is prerequisite cornerstone of growth and development. No nation can claim to be developed while its people languish in poverty and ignorance.

    What Has The Government Of Kenya Done To Protect The Welfare Of The Kenyan Consumer?

    In order to achieve the Vision 2030 objective of transforming the economy to a middle income status with high standards of living for it citizens, the Government has provided for consumer protection under the Bill of Rights. Article 46 of the Constitution grants the consumers the right to:

    • Goods of reasonable quality and price
    • Information in order to make informed purchase decisions
    • Redress in instances where they are aggrieved by actions of suppliers and service providers and the
    • Right to a healthy environment.

    Which Government Bodies Are Entrusted With Protecting Consumers?

    • Competition Authority of Kenya (CAK)
    • Kenya Bureau of Standards (KEBS)
    •  Kenya Industrial Property Institute (KIPI)
    • Communication Commission of Kenya (CCK)
    • Anti-counterfeit Agency
    • Kenya Consumer Protection Advisory Committee (KECOPAC)
    • Department of Weights and Measures
    • Various sector regulators such as:-
    1. Central Bank of Kenya(CBK),
    2. Insurance Regulatory Authority (IRA),
    3. Energy Regulatory Commission (ERC), and
    4. Medical Practitioners & Dentists Board.

    What Is A Consumer Organization?

    A consumer organization is an advocacy group that seeks to protect people from corporate abuses such as unsafe products, predatory lending, false advertising, unconscionable conduct and pollution. A consumer organization may operate through protests, campaigning or lobbying.

    How Many Of Such Organizations Exist In Kenya?

    There are various consumer organizations in the country but the Authority has profiled four (4) registered ones. They are:-

    • Consumer Unit Trust Society (CUTS),
    • Consumer Federation of Kenya (COFEK),
    • Consumer International Network (CIN), and
    • Kenya Consumer Organization (KCO).

    What Does The Competition Act Say About Such Bodies?

    The Act shall:-

    • promote the creation of consumer bodies and the establishment and the establishment of good and proper standards and rules to be followed by such bodies in protecting competition and consumer welfare;
    • recognize consumer bodies duly registered under the appropriate national laws as the proper bodies, in their areas of operation,  to represent consumers before the Authority. 
  • Restrictive Trade Practices Open or Close

    What Is The Mandate Of The Competition Authority Of Kenya?

    Promoting and safeguarding competition in the national economy and, to protect consumers from unfair and misleading market conduct.

    What Is Competition?

    Competition generally is a process in which producers or distributors, of goods and services, strive freely and independently to attract customers with a view to achieving specific economic goals, e.g. sales, profits or market shares. Therefore, competition is often described as rivalry based on prices, quantities, qualities, services, among others.

    What Are The Benefits Of Competition?

    For enterprises, competition brings both opportunities and risks. It therefore follows that mistaken individual decisions are compensated on the market either by losses or profits/gains thereby forcing the players to exhibit high level of prudence. Competition therefore enhances efficiency, offers variety and high quality goods and services.

    Why Do We Need Competition Regulation Law?

    Although competition tends to result in price reductions, offers variety and better quality goods and services, it would, however, be more lucrative for the individual businesses to sell at higher prices. There is therefore an incentive for the companies to impede or eliminate competition, for example, through (a) agreements or (b) abusive practices. Policies and legislative frameworks in the form of competition policy/law are, therefore, prerequisite antidotes to such market distortions.

    What Is Dominance?

    The Act defines “dominant undertaking” as an undertaking which controls not less than one-half of the total goods or services of any description supplied or rendered in Kenya or any substantial part thereof.

    Is Dominance Per Se Prohibited Under The Competition Act?

    No, only abuse of a dominant position is prohibited. Examples of abuse of dominance are:
    directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;

    •  limiting or restricting production, market outlets or market access, investment, distribution, technical development or technological progress through predatory or other practices;
    • applying dissimilar conditions to equivalent transactions with other trading parties;
    • making the conclusion of contracts subject to acceptance by other parties of supplementary conditions which by their nature or according to commercial usage have no connection with the subject-matter of the contracts; and
    • abuse of an intellectual property right.

    Which Type Of Agreements/Concerted practices Are Prohibited?

    Section 21 of the Act prohibits Agreements between undertakings, decisions by associations of undertakings or concerted practices which have as their object or effect the prevention, distortion or lessening of competition.

    Which Practices Of Trade Associations Are Prohibited?

    The following practices conducted by or on behalf of a trade association are also prohibited:

    • the unjustifiable exclusion from a trade association of a person, or
    • the making, directly or indirectly, of a recommendation by a trade association to its members its members which relates to;
      1. the prices charged or to be charged; or
        ii. the terms of sale.
      2. How To Launch Complaints Against Restrictive Trade Practices?

    Any person may lodge complaint with the Authority under section 31 (1) of the Act by filling in Complaint Form available at the Authority’s website.

    How To Apply For Exemption From Restrictive Trade Practice?

    Any undertaking or association of undertakings may apply to the Authority to be exempted in respect of prohibited agreement, Intellectual Property Rights or trade association by filling in appropriate forms available in the Authority’s website. The application must be accompanied by such information as may be prescribed or as the Authority may reasonably require.

    The Authority may grant an exemption if it is satisfied that there are exceptional and compelling reasons of public interest.

    What Is Confidential Information?

    Material/information is of a confidential nature if, among others:

    • is not available to the public;
    • its disclosure could adversely affect the competitive position of any person; or
    • is commercially sensitive for some other reason.

    How To Claim For Confidentiality?

    Any person who gives or discloses any material to the Authority may claim confidentiality, in terms of section 20 (2) of the Act by filling confidentiality claim form, in respect of the whole or any part of the material. The Confidentiality claim form is available in the Authority’s website.

    In the case of oral evidence, the claim may be made orally at the time of giving the evidence and in all other cases it shall be in writing, signed by the person making the claim specifying the material and stating the reason for the claim.

  • Faq On Enforcement & Compliance Open or Close

    FAQ On Enforcement & Compliance

    {slider=What is an Agreement?}
    An agreement when used in relation to a restricted practice, includes a contract, arrangement or understanding, whether legally enforceable or not;

    {/slider}

    {slider=What is a Concerted Practice?}
    A concerted practice” means co-operative or coordinated conduct between firms, achieved through direct or indirect contact, that replaces their independent action, but which does not amount to an agreement;

    {/slider}

    {slider=What is Market power?}
    Market power means the power of a firm to control prices, to exclude competition or to behave to an appreciable extent, independently of its competitors, customers or suppliers.

    {/slider}

    {slider=What is Predatory Practice?}
    Predatory practice means the practice or strategy of seeking to drive competitors out of business or to deter market entry;

    {/slider}

    {slider=What is an Undertaking?}
    An undertaking means any business activity intended to be carried on, or carried on, for gain or reward by a person, a partnership or a trust in the production, supply or distribution of goods or the provision of any service.

    {/slider}