The outgoing Competition Authority of Kenya’s director general has asked legislators and his successor to consider increasing the financial penalties for companies and businesses engaging in commercial malpractices.
Mr Wang'ombe Kariuki said although fines in place are in line with global standards, they need to be improved by charging repeat offenders more.
“The culture of penalising people in the economy has to be put on, and I agree we need to increase the percentage of the average penalties we have to a higher one, especially where there is recidivism,” said Mr Kariuki.
CAK financial penalties as provided in the Competition Act, allow the regulator to fine offenders up to 10 percent of the immediately preceding year’s gross annual turnover.
However, the authority has been penalising firms below the threshold already. Some companies have been fined between hundreds of thousands and millions of shillings that often amount to less than 10 percent of their turnover.
In the event of a settlement, the law provides that an agreement may include any amount proposed to be imposed as a pecuniary penalty.
“The penalty regime under our law reflects the international provisions…When I look at other agencies they consider recidivism, for us we are creating awareness but we have to consider recidivism and, therefore, the penalty has to increase as you repeat the offense,” said Mr Kariuki.
The charges include restrictive trade practices and abuse of buyer power, mergers implemented without authorisation by the regulator and revocation of approval of a proposed merger.
“The unquestionable case regarding a supermarket that hiked the price of sanitisers and the USSD code cases remain some of the high-profile cases that touched the core of the Kenyan economy,” said Mr Kariuki.
Mr Wang’ombe said cartels and firms abusing their dominance, in particular, should face more punitive enforcement actions.
