The competition watchdog will get powers to attach and auction properties to recover fines imposed for breaches in fresh amendments seeking to boost compliance with fair market practices and protection of consumers’ rights.
The additional enforcement powers are lined up in fresh amendments to the Competition Act.
While most individuals and businesses have made payments for the offences, the Competition Authority of Kenya (CAK) notes that some parties have failed to honour the penalties despite the exhaustion of all appeal avenues against the decision of the authority.
“The new amendment is intended to provide the Authority with a civil option of recovering penalties that remain unpaid after a party has exhausted their rights of appeal to the Tribunal and the High Court,” the CAK noted in written responses to the Business Daily.
The changes will serve to improve the watchdog’s role while growing its revenues from enforcement actions.
The CAK will be required to seek approval from the Competition Tribunal for an order to recover from a person, any amount payable under the penalty notice which remains outstanding.
“The Authority may enforce an order by attachment and sale, or by sale without attachment, of any property’ attachment of debts; appointing a receiver; or in such a manner as the nature of the relief granted may require,” says the draft amendment Bill.
The CAK normally uses a mix of soft enforcement through advocacy initiatives and hard enforcement through the levying of fines, penalties, and issuance of declaratory orders.
Last August, for instance, the competition watchdog fined nine steel manufacturers Sh338 million for price-fixing and causing artificial shortages of key construction materials in what was then a record of the largest penalty served by it.
The nine penalised firms, which have since appealed the decision of the watchdog, are managed or owned by billionaire families in Kenya and include Devki Steel Mills, Doshi & Hardware, Corrugated Steel Industries and Tononoka Rolling Mills.
In December, the CAK imposed a record Sh1.1 billion fine on retailer Majid Al Futtaim Hypermarkets Limited, which operates as Carrefour, over its dealings with suppliers, a decision later appealed by the supermarket chain.
In the financial year ended in June 2023, the competition watchdog collected penalties for infringement of the law amounting to Sh15.7 million, an increase from Sh12.8 million in fines levied previously.
The penalties were a result of enforcement action against businesses engaging in restrictive trade practices, mergers implemented without approval and consumer rights violations.
At present, the CAK does not have the power to make such enforcements to recover fines as it can only initiate criminal prosecution through the Office of the Director of Public Prosecutions (ODPP).
The authority usually budgets to receive fines and penalties from the results of various cases it was investigating.
Outcomes that are unfavourable to the CAK, including notices of appeal against the findings, however, delay the conclusion of those cases and the expected revenue.
In the year to June 2023, for instance, the competition watchdog missed its target of raising Sh50 million through levies, fines and penalties.
The CAK notes that the majority of those penalised in the past have abided by the law and have honoured the payment of fines within the set timelines. However, a few businesses are yet to settle the payments even after exhausting appeal avenues.
The competition watchdog says the amendments to its principal Act will make the legislation more responsive to emerging regulatory challenges.
“The objective of the proposed amendments to the Competition Act is to ensure that our law is robust enough to enable the Authority to respond to emerging regulatory issues in the economy, including in the digital market, as well as incorporate learnings from our enforcement experience. We have also taken into consideration international best practice,” the CAK added.
