Firms found in breach of competition laws have been granted a window of mitigation as the Competition Authority of Kenya (CAK) moves to reduce the severity of fines.
The watchdog said administrative action against firms in breach of the Competition Act would be subject to remedial measures to accommodate special cases such as first-time offenders, inadvertent breaches as well as offenders who cooperate.
“The base percentage (penalty prescribed under the Competition Act) may be decreased where the authority finds that there were mitigating factors,” the CAK said.
Adano Wario, the CAK acting director-general, said under the new mitigation rules all cases would be addressed under uniform terms.
“Previously, all four technical departments of the Authority— mergers and acquisitions, enforcement and compliance, buyer power and consumer protection — referenced separate guidelines when negotiating settlements and penalties with stakeholders,” he said.
“This disjointed approach was ineffective for all parties concerned, necessitating us to collapse all matters about administrative and the settlement process into one reference document but with some improvements to accommodate our experiences and learnings when implementing the Competition Act,” Dr Wario added.
Under the new regulations, an entity willing to acknowledge liability for an infringement will, for instance, see its respective sanctions or fines reduced by one percent, while the provision of information to CAK promptly offers a 0.5 percent cut.
The immediate termination of what breaches the law earns a reprieve of one percent while a two percent relief applies when the conduct occurred inadvertently.
The CAK said it implemented the mitigation rules on December 16, 2023 to enhance transparency, efficiency, predictability, and consistency in determining remedy.
“Specifically, these guidelines are aimed at achieving proportionality on the remedies imposed against the gravity of contravention and ensure the availability of effective consumer dispute resolution mechanisms and redress for loss or injury arising from the infringement of the rights of consumers,” the CAK said.
Maximum threshold
The watchdog has nevertheless listed aggravating circumstances that may push up the size of sanctions to the maximum threshold.
Among the aggravating factors listed by the authority are the impact of the contravention of aspects such as jobs. Others cover the duration of the conduct, market share of entities found in contravention, recidivism, and public interest concerns.
The CAK's investigative process begins with the receipt of a complaint or a self-initiated investigation followed by a preliminary investigation to determine the existence of executable evidence after which the competition watchdog offers a notice of full investigation.
The accused party is then allowed to respond to the charge from which it can then offer some mitigation before the watchdog’s final verdict.
