Description

The Competition Authority of Kenya  will on 25th September 2020 host its 7th Annual Competition Law & Policy Symposium. This event will be held virtually and under the theme Competition Policy in Times of Crisis.   The panel discussions will focus on, among others, whether buyer power regulation is necessary, responsible manufacturing for consumer benefits and competition law enforcement in the next decade.

During a crisis, businesses may seek to engage in practices that have the effect of limiting or eliminating competition in markets, including engaging in collusive conduct, unconscionable increases in prices and/or hoarding or abusing their dominance. Indeed, immediately after the first patient with Covid-19 was announced in Kenya, the country witnessed price gouging especially among some retailers of sanitizers and face masks which are essential in curtailing the spread of the virus.

Pursuant to the Authority’s suo moto powers under Section 70A of the Act, and in order to ensure that Kenyans continue accessing key products such as hand sanitizers and face masks at competitive prices, the Authority initiated investigations of over 100 businesses in 15 counties. The Authority took enforcement action against retailers who were acting contrary to the provisions of the Competition Act. The prices of these products have since stabilized.

The Authority also issued an Order to major manufacturers and distributors of essential foodstuffs and commodities, who had entered into exclusive agreements without its approval, to expunge them immediately. The Order applied to manufacturers and distributors of; maize flour, wheat flour, edible oils, rice, sanitizers and toilet papers.

The agreements facilitate allocation of distributorship territories, brand exclusivity, quantities supplied, and deter manufacturers of competing brands from accessing the same distributors to deliver their products to retail outlets contrary to section 21 (1) of the Competition Act. Such exclusive arrangements distort allocation of optimal prices for these commodities, ultimately denying consumers in some regions of the country from accessing the commodities at competitive prices. This situation may be exacerbated further by the COVID-19 pandemic.

Further, amendments to the Competition Act, which came into force in January 2020, now clearly provide for acts constituting abuse of buyer power while providing the minimum requirements of contracts, including terms of payment, payment dates, interest payable, and mechanism of dispute resolution, among others.

The amended law also gives the Authority the power to issue Prudential and Reporting Orders to businesses found culpable, as was evidenced in the aforementioned retail sector investigation. The Authority has prioritized continuous engagement with its stakeholders regarding the Buyer Power provisions in the Competition Act, with a focus on the import of the recent amendments to the law.

These are some of the issues that will be deliberated during the Symposium. The panelists are drawn from the business community, regulators, national and regional competition agencies, consumer bodies, among others.

Stakeholders can register to attend the Symposium via the e-mail:symposium2020@cak.go.ke Queries can be directed to Mr. Benard Ayieko on +254 722 484 805

NB: Participation is free of charge.