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Opinion & Analysis

Competition watchdog must focus on consumer protection

The Competition Authority of Kenya (CAK) has been in the news lately, mainly in relation to two high-profile cases that it has been handling touching on well-known companies.

The first case was between telecommunication companies Safaricom and Airtel; while the second was between supermarket chains Tuskys and Ukwala.

In both matters, the competition watchdog has made reasonable rulings that have, on the balance, been more leaning on the side of consumer protection rather than bending over to big corporate interests.

It is a commendable start for CAK, whose presence is only starting to be felt now after it was given autonomy to operate as a regulator independent of the Treasury.

As Kenya’s economy continues to grow, there will definitely be more test cases for the Authority to arbitrate on. The Safaricom-Airtel case was a particularly important one for CAK.

The Authority was being called upon to arbitrate on a tussle involving the M-Pesa mobile phone money transfer system, which has achieved global fame due to its rapid acceptance by millions of Kenyans.

Being the huge entity that Safaricom is, the possibility to see Airtel’s complaint as just another grumble by a disgruntled competitor was always there. But CAK approached the matter by relying on the rules book.

It ordered the end of exclusive business contracts between M-Pesa agents and Safaricom, in a ruling that partially lowered the entry barrier for rival telecommunication companies that may want to grow their mobile cash payments business.

On the matter of inter-operability between M-Pesa and rivals such as Airtel and Orange money, CAK declared that it did not have the sole mandate to arbitrate, pointing out that other regulatory agencies such as the Communications Authority and the Central Bank should also have their input on the matter.

Though Airtel and Safaricom may have their own views on the ruling, consumers stand to be the beneficiaries from the partial opening up of M-Pesa to more competition.

In the Tuskys and Ukwala case, CAK has asserted its authority by declaring Tuskys a dominant retailer within the Central Business District that cannot be allowed to amass more market share, which could be detrimental to consumers.

The persistent complaints about big global retailers’ treatment of employees, suppliers and small businesses are an authoritative case study on why no single entity should be allowed to dominate the sector.

As long as CAK stays focused on protecting the public interest, consumers are likely to remain the biggest winners, while big companies will be forced to play by the rules.

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