Spotlight turns on Monopolies office’s potency

Monopolies Commissioner Wang’ombe Kariuki will on Friday host a group of agitated visitors, a team from seven companies that have joined forces to oppose the proposed merger of the country’s biggest advertising agencies ScanGroup and Ogilvy East Africa.

The advertisers say the merger, which will see ScanGroup acquire a 50 per cent stake in Ogilvy East Africa, will create a large entity that will stifle competition.

Before Mr Kariuki can skim through the volumes of the petition by the advertisers, a fellow senior government official just streets away will be making final arrangements to fly in experts from the US to look at a similar issue.

This will perhaps be the most recent indirect act that potentially punches holes in the role, effectiveness and capacity of the office of the Monopolies and Prices Commission.

This is the body charged with promoting fair competition in the economy which, among other things, entails ensuring that companies are not involved in anti- competitive behaviour or price fixing.

Information and Communications minister Samuel Poghisio says he plans to hire experts on competition and pricing from the US to help it unravel the controversy surrounding the new set of telecoms regulations which have left players sharpening their spears with leading mobile operator Safaricom saying the rules are meant to clip its growth wings.

But on Thursday, the ministry announced it had temporarily suspended the implementation of the rules, pending a review by experts.

Safaricom singled out two of the regulations as unacceptable; the fair competition and equality treatment, and the Tariff regulations and compliance — specifically sections, 8 and 9 of the Tariff Regulations which state that dominant operators cannot review or reduce retail tariffs without the approval of CCK.

Chief executive officer Michael Joseph says part of the rules are aimed at punishing a dominant operator irrespective of whether or not that operator had acted in an anti-competitive manner and in abuse of its position.

Most operators agree that the regulations will benefit the industry even as some of their counterparts vigorously oppose them.

The decision to hire experts to help redraft the controversial new telecoms regulations, a move that was announced by Information permanent secretary Bitange Ndemo on Tuesday, puts the Monopolies Commission under scrutiny.

Industry players say the mandate falls right at the doorstep of the Monopolies Commission.

“This commission has not been able to keep in pace with the rapidly developing sectors such as telecommunication which are experiencing stiff competition and require closer monitoring and regulations that ensure that all operators are treated equally and playing at a level field,” said Dr Ndemo.

Legal experts reckon that the commission’s lack of legal clout to punish firms found guilty of unfair practices and the light sentences meted out are unlikely to deter culprits.