Tighten noose on price-fixing


Mr Wang’ombe Kariuki, Competition Authority of Kenya boss. PHOTO | EVANS HABIL

The recent efforts by the Competition Authority of Kenya (CAK) to clamp down on price-fixing and cartel-like conduct by consumer goods, financial services and manufacturing firms are commendable and will go a long way towards eliminating this behaviour.

This type of practice hurts consumers and distorts the market, making it harder for those doing clean business to survive.

Going forward, the regulator and legislators must consider the rising number of companies that are being caught flouting the rules as an indicator that the penalties being levied are not punitive enough to act as a fully effective deterrent to rogue players.

For instance, a paint manufacturer who moves hundreds of millions of shillings worth of product every month is unlikely to be swayed by a fine of Sh20 million.

It might be more of a deterrent if the firms are levied a percentage of turnover for breaches.

For long-term deterrence, Kenya’s market overseers ought to borrow from the US, where regulatory breaches are met with such a tough action that firms actively fear falling foul of any laws.