Many times dominance is achieved through innovation.
A section of large corporations and multinationals may fall under the Competition Act as dominant.
The Act says a dominant company produces or supplies at least 50 per cent of goods and services within a market.
Dominant companies are regulated to prevent them from abusing their positions.
They are prohibited from charging unfair prices, for example, by unilaterally increasing their rates knowing that consumers do not have a choice.
They should neither limit production and sale nor discriminate.
In Kenya, some companies breach these regulations.
The Competition Authority has powers to prohibit abuse of positions.
Abuse of intellectual property (IP) rights is another way a dominant player can abuse its position without observers realising it is past what is allowed.
An IP right grants the holder an almost monopolistic position for controlling sale, production, and distribution of goods.
If a third party wants to distribute or produce the goods, he would have to get permission from the right holder, usually in exchange for royalties and licences.
Unfairly limiting distribution then is an abuse of the right.
For example, when a pharmaceutical company withholds distribution of an essential medicine like ARVs then this means that the consumers’ rights are endangered.
The Constitution provides for right to health.
At times, the fundamental right of a person may be pitted against the IP right of the producer.
In such a case, the dominant player may be prohibited and a compulsory licensing may be done to allow third parties to produce the good with payments to the right holder.
Unfair enforcement of IP rights is also an abuse of the same. For example, resorting to an unfair litigation.
I know of a company whose global IP strategy may be deemed abusive.
It registers trademarks globally and thereafter carries out aggressive litigation in those same markets in so far as the right is concerned. This can be considered as abuse of intellectual property rights.
The Competition Act provides a severe penalty for companies that abuse dominant positions, including a fine of Sh10 million and imprisonment.
Despite the existence of this provision, abuse of dominance is commonplace in Kenya, hurting consumers.
However, the law on abuse of dominance also needs to be balanced with the need to reward a company for innovation.
Many times dominance is achieved through innovation.
Last year, a dominant company found itself facing a parliamentary scrutiny on allegations of abusing its position.
The company, however, argued there was no breach, rather it was innovation that enabled it to achieve the lofty position.
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