In January Mastermind filed a complaint against BAT for allegedly under pricing their products so as to drive out rivals. Photo/FILE
The new law on competition will come into force from July, giving businesses hope that unfair trade practices will be checked.
The law will also offer consumers the legal muscle to take on merchants who sell them goods of poor quality and those who offer shoddy services.
Finance minister Uhuru Kenyatta said at the African competition regulators forum that the new law would level the playing field for producers and protect buyers as international trade becomes more complex.
Business climate
The law is supposed to enhance the business climate to ensure fair competition between enterprises and industries and control monopolistic or cartel-like behaviour that exploits consumers or limits application of market forces.
Competition Act 2010 will be enforced by the Competition Authority that replaced the Monopolies and Prices Commission, which had acted under the control of Treasury.
The new authority is intended to act independently and to have more power than its predecessor.
Mr Kenyatta said that the government recognised the importance of competition regulation as the business world became increasingly complex.
The new law comes into force amid increasing complaints relating to abuse of market dominance, particularly in mobile telephony, tobacco, and the beer industries.
Some players have accused their rivals of using underhand tactics to gain or retain market share.
In January, for example, Mastermind Tobacco filed a complaint against British American Tobacco for allegedly under pricing their products so as to drive out rivals.
BAT, however, denied the allegations saying it believed in honesty and transparency.
In late January, Telkom Kenya filed a complaint against rival Airtel about a price cut, wanting the Communications Commission of Kenya to investigate what it alleged to be price undercutting.
Telkom said that Airtel’s pricing was not compliant with price laws and that its low pricing could hurt the sector in the long-run.
The Competition Act allows the new authority more jurisdiction to review mergers and allows for individual criminal penalties, class action as well as higher fines with the maximum penalty for price fixing at Sh10 million. Individuals can be jailed for up to five years.
Value of development
Mr Kenyatta was addressing experts on competition regulation.
They had gathered at the Nairobi Serena to discuss the value of development of a strong competition regime in Africa.
The workshop was organised by The International Development Research Centre, a Canadian nongovernmental organisation.
