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Competition Act

· The Competition Act Was Enacted For The Regulation Of Competition In The Markets Within Kenya And To Prevent Unfair Competition.

· By Regulating Competition In The Markets The Act Has The Effect Of Increasing Efficiency In Production, Distribution And Supply Of Goods And Services, Promote Innovation And Maximize The Efficient Allocation Of Resources. Regulation Is Also Meant To Ensure That Investors Are Encouraged To Participate In The Economic Activities And Ultimately Protect The Consumer.

  • The Act applies to all persons engaging in trade including the Government, state corporations and local authorities. (Section 5).
  • Engagement in trade is defined under section 5(5) to mean the sale or acquisition of a business, part of a business or an asset of a business carried on by the Government, a state corporation or a local authority constitutes engaging in trade. 
  • However where the Government is engaged in the imposition or collection of taxes, the grant or revocation of licenses, permits and authorities, collection of fees for licenses, permits and authorities or internal transactions within the Government, a state corporation or a local authority shall NOT be deemed to be engaging in trade.
  • Section 5 (3) provides for co-operation by the Competition Authority with other public bodies charged with regulation of matters touching the Act.
  • However, where there is any conflict in cases involving competition and consumer welfare, the Competition Authority shall have the final say.
  • Under Section 6 of the Act all Kenyan citizens and corporate bodies and persons registered in Kenya and carrying on business or engaging in trade outside Kenya shall be subject to the provisions of the Act

This Authority is established by section 7(1) of the Act, which authority is an independent body corporate with perpetual succession and a common seal.

 

Section 10 gives the membership of the Authority as:-

  1. A non-executive Chairman, appointed by the Cabinet Secretary;
  2. The Permanent Secretary in the Ministry for the time being responsible for finance or his representative;
  3. The Permanent Secretary in the Ministry for the time being responsible for trade or his representative;
  4. The Attorney-General or his representative;
  5. The Director-General , who is the chief executive officer of the Authority, appointed with approval of Parliament. He/she must be a person knowledgeable and experienced in matters to do with. The Director general holds office on terms to be determined by the Authority and for a renewable term of five years.
  6. Five other members appointed by the Cabinet Secretary from among persons experienced in competition and consumer welfare matters, one of whom shall be experienced in consumer welfare matters. These five members must be vetted and approved by the concerned Parliamentary committee.

Functions of the Authority(section 9) are to:-

  1. promote and enforce compliance with the Act
  2. receive and investigate complaints from legal or natural persons and consumer bodies
  3. promote public knowledge, awareness and understanding of the obligations, rights and remedies under the Act and the duties,functions and activities of the Authority
  4. promote the creation of consumer bodies and the establishment of good and proper standards and rules to be followed by such bodies in protecting competition and consumer welfare;
  5. recognize consumer bodies duly registered under the appropriate national laws as the proper bodies, in their areas of operation, to represent consumers before the Authority
  6. make available to consumers information and guidelines relating to the obligations of persons under the Act and the rights and remedies available to consumers under the Act
  7. carry out inquiries, studies and research into matters relating to competition and the protection of the interests of consumers
  8. study government policies, procedures and programmes, legislation and proposals for legislation so as to assess their effects on competition and consumer welfare and publicise the results of such studies
  9. investigate impediments to competition, including entry into and exit from markets, in the economy as a whole or in particular sectors and publicise the results of such investigations
  10. investigate policies, procedures and programmes of regulatory authorities so as to assess their effects on competition and consumer welfare and publicise the results of such studies
  11. participate in deliberations and proceedings of government, government commissions, regulatory authorities and other bodies in relation to competition and consumer welfare
  12. make representations to government, government commissions,regulatory authorities and other bodies on matters relating to competition and consumer welfare
  13. liaise with regulatory bodies and other public bodies in all matters relating to competition and consumer welfare;
  14. advise the government on matters relating to competition and consumer welfare.

Powers of the Authority:

· Section 13(1) empowers the Authority to appoint relevant staff to enable it carry out its mandate. The Authority may also employ the services of consultants or experts as the need arises(section 13(2) and determines the terms of engaging consultants, expert or employees

· As provided under section 13(4) the terms must include notification/ declaration in writing of a conflict of interest as, and when it arises, failure of which shall be grounds for summary dismissal. However before employing or engaging any person, the Authority shall obtain from the person a written declaration of any existing conflict of interest(section 13(5)

· Issues of conflict of interest is further been supported by section 14 (6) which prohibits the fulltime employees from engaging in other forms of paid employment.

· Section 13 (7) empowers the Authority to engage services of employees in other government departments and agencies upon agreement with the concerned department

· Selection of employees and other competitive procedures undertaken by the Authority must be included in its annual report for purposes of transparency-section 13(8)

· The Director General is the custodian of the common seal (Section 14)and this common seal shall not be used except upon the order of the Authority.

· Section 14(2) provides that the common seal shall be judicially and officially noticed, and unless and any such documentation shall be prima facie evidence of any such order or authorization by the Authority unless there is proof to the contrary.

· Section 14(3) the affixing of the common seal of the Authority shall be authenticated by the signature of the Chairman of the Authority and the Director-General. The Authority has power to nominate one member of the Authority to authenticate the seal in the absence of either the Chairman or the Director-General

· Section 16 (1)of the Act protects members of the Authority form personal liability for actions done in the execution of its mandate as provided under the Act. 16. Protection from personal liability. This protection extends to employees, officers or agents of the Authority.

· Section 16(2) provides that no compensation shall be payable to any person for any loss, damage or harm directly or indirectly caused by anything done or intended to be done in good faith by the Authority or any person authorized by the Authority under the Act. Consequently, any expenses incurred by any person in any suit or prosecution brought against him in any court in respect of any act which is done or purported to be done by him under the direction of the Authority shall, if the court holds that such act was done in good faith, be paid out of the general funds of the Authority, unless such expenses are recovered by him in such suit or prosecution(section 16(3).

· However under section 17 the Authority must compensate anyone who suffers damage or injury to himself or his property resulting from the exercise of the Authority’s mandate or by failure, whether wholly or partially, of any works.

· The Authority may hold inquiries or studies where the need arises and submit to the Cabinet Secretary a report at the conclusion of the said inquiry/study -section 18(1).

· Under section 18(5) the Authority must issue a notice of the intended inquiry or study by publishing a notice in the Kenya Gazette and in at least one daily newspaper of national circulation specifying the subject matter of the intended inquiry/study and inviting members of the public to submit their opinions and other information relevant to the inquiry/study.

· Notice may also be sent to persons or entities whose engagements the Authority considers to be relevant to the inquiry/study.

· Section 84 (1)prohibits a member of the Authority or of a committee, the Director-General, any other employee of the Authority, and any other person required or permitted to be present at any meeting of the Authority or of a committee or at any investigation in terms of the Act, from disclosing in any way any information relating to the affairs of any person or undertaking that has come to such person’s knowledge

· Section 85(1) provides for disclosure by the Director-General, an investigator or any other person employed by the Authority who has a financial or other personal interest in any matter which is the subject of an investigation by the Authority

· Section 85(2) prohibits members or employees of the Authority from using confidential information to their financial advantage or to the advantage of any other person.

· Section 78(1) provides that the funds of the Authority shall consist of grants, donations, bequest, funds allocated to the Authority by Parliament, fees and penalties collected by the Authority or litigation costs refundable to the Authority. Details of funds held by the Authority must be disclosed in the annual report.

· The Authority has power under section 82(1) to invest the funds in securities in which it may by law invest, trust funds, or in any other securities which the Cabinet Secretary approves.

· Section 81 provides for audit of the accounts of the Authority by the Controller and Auditor-General. Accounts must be submitted for audit within three months after the end of each financial year

· Section 83(1)- the Authority must prepare an annual report before thirtieth September each year, in respect of the year up to the immediately preceding thirtieth June and submit it to the Cabinet Secretary before 30th November in that year. The report shall be tabled before the National Assembly by the Cabinet Secretary within two months after receiving the annual report.

· Section 20(2) provides that any person disclosing any material or information to the Authority, whether under compulsion of law or otherwise, may claim confidentiality in respect of the whole or any part of the information or material. Section 20(1) defines material to include any information, document or evidence relating to any matter to which this Act applies.

· However where such information is disclosed to persons outside the Authority before a claim for confidentiality is made, the Authority shall not be held liable.-section 20(3)

· A claim of confidentiality may be made orally at the time of giving the material/information in the case of oral evidence-

· A claim of confidentiality must be in writing in the case of documentary or other material

· The reasons for claiming confidentiality must be explained to the Authority at the time of making the claim- section 20(4).

· If the material provided meets the threshold of confidentiality as determined by the Authority and the disclosure of any such material would adversely affect competition, or is commercially sensitive ,the Authority shall grant confidentiality for the material(section 20(5).

· Under section 20(6) the Authority must communicate in writing the decision whether or not to grant confidentiality to the person claiming it. Where confidentiality is not granted, the Authority shall treat the material as confidential for fourteen days after giving such notification.

· Section 20(7)-if a claim for confidentiality is made in relation to material supplied to the Authority voluntarily and the Authority decides not to grant confidentiality in whole or in part for the material, the person who supplied the material may, within the fourteen days notification period, withdraw the material from the Authority

 

· Under section 20 (8), where confidentiality has been granted, the Authority may, nonetheless disclose the material at any time without notice to any other person if the disclosure is made to another person who is also performing a function under this Act, or if the disclosure is made with the consent of the person who gave the material; or where the disclosure is authorised or required under any other law; or where the disclosure is authorized or required by a court or a tribunal constituted by law.

 

· Disclosure may also be made by the Authority if the Authority is of the opinion that disclosure of the material would not cause detriment to the person supplying it or the person to whom it relates; or although the disclosure of the material would cause detriment to the person supplying it or the person to whom it relates, the public benefit in disclosing it outweighs the detriment, and the Authority has given fourteen days prior written notice to that person of its intention to disclose the material pursuant to this provision.

· Section 20(9) gives a right to appeal to the Tribunal against any decision not to grant confidentiality within the fourteen days notification period. Once an appeal is lodged at the Tribunal, the Authority is obliged to treat the material as confidential until such appeal is heard and determined.

· Section 21(1)prohibits restrictive trade practices . The section defines restrictive trade practices as agreements between undertakings, decisions by associations of undertakings, decisions by undertakings or concerted practices by undertakings which have as their object or effect the prevention, distortion or lessening of competition in trade in any goods or services in Kenya, or a part of Kenya.

· However , section 21(8) provides that it shall not be deemed to be a restrictive trade practice where it involves an agreement entered into between, or a practice engaged in by a company and its wholly owned subsidiary or a wholly owned subsidiary of that subsidiary company; or undertakings other than companies, each of which is owned or controlled by the same person or persons.

 

· Section 21 (3) lists down specific practices that are restrictive to competition. These include any practice that:-

(a) directly or indirectly fixes purchase or selling prices or any other trading conditions;

(b) divides markets by allocating customers, suppliers, areas or specific types of goods or services;

(c) involves collusive tendering;

(d) involves a practice of minimum resale price maintenance;

(e) limits or controls production, market outlets or access, technical development or investment;

(f) applies dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;

(g) makes the conclusion of contracts subject to acceptance by other parties of supplementary conditions which by their nature or according to commercial usage have no connection with the subject of the contracts;

(h) amounts to the use of an intellectual property right in a manner that goes beyond the limits of legal protection;

(i) otherwise prevents, distorts or restricts competition.

 

· However Section 21(4) provides that a supplier or producer of goods can recommend a resale price for any commodity or service as long as the same is expressly stipulated by the supplier or producer to the reseller or provider that the recommended price is not binding; and if any product, or any document or thing relating to any product or service, bears a price affixed or applied by the supplier or producer, and the words “recommended price” appear next to the price so affixed or applied.

· Section 21(6)Any act that is deemed to be a restrictive trade practice may be rebutted if an undertaking or a director or shareholder concerned establishes that a reasonable basis exists to conclude that any practice in which any of the undertakings engaged was a normal commercial response to conditions prevailing in the market.

· Section 21(7) defines who a director is in relation to responsibility for the conduct of restrictive trade practices. These include:-

(a) a director of a company as defined in the Companies Act (Cap. 486)

(b) in relation to an undertaking conducted by a society, a person responsible jointly with others for its management;

(c) a trustee of a trust; or

(d) in relation to an undertaking conducted by an individual or a partnership, the owner of the undertaking or a partner of the partnership;

(e) in relation to any other undertaking, a person responsible either individually or jointly with others for its management.

· Section 22(1) extends the prohibition on restrictive trade practices to trade associations engaged in:-

(a) the unjustifiable exclusion from a trade association of any person carrying on or intending to carry on in good faith the trade in relation to which the association is formed

(b) the making, directly or indirectly, of a recommendation by a trade association to its members or to any class of its members which relates to price or terms of sale

· Under section 22 (4) any trade practice or agreement entered into by a trade association is deemed also to have been entered into by the members personally.

· Section 22 (5) – members of a trade association may disassociate themselves from such restrictive engagement, agreement or recommendation of the trade association by expressly notice to the trade association to that effect.

 

Exemption

· However under section 25 any person or undertaking may apply to the Authority for exception from prohibited trade practices. Such an application must be published in the Kenya Gazette(25(3) and the same shall be considered by the Authority after which a determination shall be made and all concerned parties notified of such determination.

 

· Section 27- exemption issued may be revoked or amended as the Authority deems fit, and in particular, where:-

(a) the exemption was granted or the certificate of clearance was issued on materially incorrect or misleading information

(b) there has been a material change of circumstances since the exemption was granted or the certificate was issued

(c) a condition upon which an exemption was granted has not been complied with

 

· Section 27(2) If the Authority proposes to revoke or amend an exemption or to revoke a certificate of clearance it shall give notice in writing of the proposed action to the person to whom the exemption was granted or the certificate of clearance was issued, and to any other person who in the opinion of the Authority is likely to have an interest in the matter and call upon such persons to submit to the Authority, within thirty days of the receipt of the notice, any representations which they may wish to make in regard to the proposed action.

 

· Section 27(3) empowers the Authority to apply to the Tribunal for the imposition of a penalty where any person does not comply with conditions for exemption

· Section 28(1) exemption may be granted by the Authority where there is any agreement or practice relating to the exercise of any right or interest acquired or protected in terms of any law relating to copyright, patents, designs, trademarks, plant varieties or any other intellectual property rights.

· Section 29(1)A professional association whose rules contain a restriction that has the effect of preventing, distorting or lessening competition in a market may apply in writing to the Authority for an exemption and the Authority may exempt all or part of the rules of a professional association.

Section 30- all exemptions granted or revoked by the Authority must be published in the Kenya Gazette as soon as possible . The notice must include reasons for every exemption and revocation must also be stated in the aid notice

· Section 23(1) defines dominant undertaking to mean an undertaking which produces, supplies, distributes or otherwise controls not less than one-half of the total goods or services of any description which are produced, supplied or distributed in Kenya or any substantial part thereof

· Section 24(1) prohibits any conduct that abuses a dominant position. These acts are outlined under section 21(2) to include:-

(a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions

(b) limiting or restricting production, market outlets or market access, investment, distribution, technical development or technological progress through predatory or other practices

(c) applying dissimilar conditions to equivalent transactions with other trading parties

(d) making the conclusion of contracts subject to acceptance by other parties of supplementary conditions which by their nature or according to commercial usage have no connection with the subject matter of the contracts and

(e) abuse of an intellectual property right.

 

  • Who can lodge a complaint – any person who feels their consumer rights have been infringed

 

  • Where - the person lodging the complaint can do so via post, email telephone or by physically going to the Authority offices

 

  • How – a complaint is lodged by filling in a consumer complaint form provided for in the Authority’s website

 

Power of authority in dealing with complaints

Investigation of complaints(section 34(1) which involve the following;

  • Parties are given notice of intended investigation
  • Entry and search of premises by authority personnel(section 32(1)

· Section 32(3)- The investigators may use any computer system on the premises, or require assistance of any person on the premises to use that computer system, to:-

(a) search any data contained in or available to that computer system;

(b) reproduce any record from that data;

(c) seize any output from that computer for examination and copying;

(d) attach and, if necessary, subject to the issuance of a receipt to that effect, remove from the premises for examination and safekeeping anything that has a bearing on the investigation.

· Section 32(4) permits the Authority to use police officers in the performance of investigations as the need arises.

  • Power to take evidence (rules of evidence apply)-section 33(1)

 

Hearing Conference (section 35)

  • Done upon request by an undertaking that wishes to make oral presentations to the Authority
  • Done only when required and which upon approval by the authority, is convened within 21 days
  • Held at a date, time and place as determined by the authority

· The party subject to the proceedings may be accompanied by an advocate or by any person whose assistance he may require at the conference-section 35(2)

  • Proceedings are carried out in an informal manner and such records of proceedings are kept by the authority for future reference
  • Once the objective of the hearing conference has been achieved the proceedings are terminated

 

 

Action after investigation (section 36-38)

The authority upon completing the investigations may recommend the following actions:

· declare the conduct which is the subject matter of the Authority’s investigation, to constitute an infringement of the prohibitions contained in the Act

· restrain the undertaking or undertakings from engaging in that conduct

· direct any action to be taken by the undertaking or undertakings concerned to remedy or reverse the infringement or the effects thereof

· impose a financial penalty; or

· interim relief while investigations are still ongoing(section 37(1)

· grant any other appropriate relief.

 

The authority then publishes its decision in the Kenya gazette indicating the name of the undertaking and the nature of conduct that is the subject of the action and the settlement agreement reached by the authority

 

However, under Section 86 of the Act an investigation into an alleged infringement of the provisions of this Act may not be initiated after three years from the date the infringement has ceased

 

Appeals

  • The authority decision is not final and such a party has a right of appeal to the tribunal - section 40(1) by making an application in writing to the authority within 30days
  • Appeal from the tribunal lies in the high court .The decision of the high court is final - section 40(2)

 

 

 

· Section 41 defines mergers and the different ways of forming mergers

· Section 41(3) A person controls an undertaking if that person

(a) beneficially owns more than one half of the issued share capital of the undertaking;

(b) is entitled to vote a majority of the votes that may be cast at a general meeting of the undertaking, or has the ability to control the voting of a majority of those votes, either directly or through a controlled entity of that undertaking;

(c) is able to appoint, or to veto the appointment of, a majority of the directors of the undertaking;

(d) is a holding company, and the undertaking is a subsidiary of that company as contemplated in the Companies Act (Cap. 486);

(e) in the case of the undertaking being a trust, has the ability to control the majority of the votes of the trustees or to appoint the majority of the trustees or to appoint or change the majority of the beneficiaries of the trust;

(f) in the case of the undertaking being a nominee undertaking, owns the majority of the members’ interest or controls directly or has the right to control the majority of members’ votes in the nominee undertaking; or

(g) has the ability to materially influence the policy of the undertaking in a manner comparable to a person who, in ordinary commercial practice, can exercise an element of control referred to in paragraphs (a) to (f).

Formation of mergers

· All mergers to which the Act applies must be approved by the Authority-section 41(3)

· mergers may be formed where more than one undertaking join to form one undertaking in any particular industry

· The Act also considers certain joint transactions as mergers, and the same must also be notified to the Authority

· Mergers must meet the threshold provided by the Guidelines issued by the Authority in terms of monetary value of the proposed undertakings, or he proposed transaction.

· Any proposal for a merger must be notified to the Authority –Section 43(1)

· The Authority may consider the proposed merger in accordance with the Guidelines for mergers . The Authority applies both the competition and public interest tests in determining whether a merger should be approved declined or approved with conditions.

· Section 43(2)- the Authority may, within thirty days of the date of receipt of such notification, request such further information in writing from any one or more of the undertakings concerned, and make a determination within 60 days , or if a hearing conference is convened in accordance with section 45, within thirty days after the date of conclusion of the conference (section 44)

· The Authority may also involve an investigator for the purpose of considering a proposed merger who shall investigate the proposal and give a report to the Authority on his findings regarding the proposed merger.

· Section 47-a proposal for merger may be revoked if the decision was based on materially incorrect or misleading information for which a party to the merger is responsible; or any condition attached to the approval of the merger that is material to the implementation is not complied with.

· Section 48- Appeals against the decision of the Authority on a merger may be referred to the Tribunal which appeal must be determined within four months after the date of the making of an application for a review was made. Further appeal may be made to the High Court whose decision shall be final

 

· Section 50(1) of the Act gives the Authority the responsibility of ensuring that the structure of production and distribution of goods and services in Kenya is constantly reviewed to determine where concentrations of economic power exist and if the same is economically detrimental and/or defeats the functions and purpose of the Act

 

· Section 50 (4) provides that unwarranted concentration of economic power shall be deemed to be prejudicial to the public interest if, having regard to the economic conditions prevailing in the country and to all other factors which are relevant in the particular circumstances, the effect thereof is or would be to:-

(a) unreasonably increase the cost relating to the production, supply, or distribution of goods or the provision of any service; or

(b) unreasonably increase(i) the price at which goods are sold; or (ii) the profits derived from the production, supply or distribution of goods or from the performance of any service; or

(c) lessen, distort, prevent or limit competition in the production, supply or distribution of any goods (including their sale or purchase) or the provision of any service;

(d) result in a deterioration in the quality of any goods or in the performance of any service; or

(e) result in an inadequacy in the production, supply or distribution of any goods or services.

· In the event of a determination of unwarranted concentration of economic power any the undertaking(s) under investigation may request or the Authority may decide to conduct a hearing conference- section 54(1)

· The Authority shall give a notice in writing of the intended hearing conference and the Authority’s determination as to whether or not an unwarranted concentration of economic power exists shall be kept in abeyance pending conclusion of the hearing(section 51(3).

· Section 52(1) -after completion of its investigation, the Authority may make an order directing any person whom it deems to hold an unwarranted concentration of economic power in any sector to dispose of such portion of his interests in production, distribution or the supply of services as it deems necessary to remove the unwarranted concentration.

 

· Section 52(2) In addition the Authority may order, separately or together with the order to dispose of interests made under that subsection, the person in question to observe such other conditions as may be deemed necessary to remove the unwarranted concentration.

· However, no order shall be issued which would have the effect of subdividing a manufacturing facility whose degree of physical integration is such that the introduction of independent management units controlling different components reduces its efficiency and substantially raises production costs per unit of output.

 

 

· Section 56(1) and 57(1)of the Act prohibits unconscionable conduct in trade and business transactions

· Under Section 56(2) The Authority shall determine what may be termed as unconscionable conduct having regard to certain factors including the relative strengths of the bargaining positions of the person and the consumer; whether, as a result of conduct engaged in by the person, the consumer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the person; whether the consumer was able to understand any documents relating to the supply or possible supply of the goods or services; whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the consumer or a person acting on behalf of the consumer by the person acting on behalf of the person in relation to the supply or possible supply of the goods or services;and the amount for which, and the circumstances under which, the consumer could have acquired identical or equivalent goods or services from another supplier.

· Section 56(5)- Institution of legal proceedings involving the supply of goods and services shall not be deemed to be unconscionable conduct

· Section 56(3)prohibits imposition of unilateral charges and fees, if the charges and the fees in question had not been brought to the attention of the consumer prior to their imposition or prior to the provision of the service where it involves the provision of banking, micro-finance and insurance services,

· Further the Act provides that a consumer must be informed by a service provider of all charges and fees intended to be imposed for the provision of a service-(section 56(4).

· However section 56(8) provides that the provisions on unconscionable conduct do not apply to the supply of goods for the purpose of re-supply or for the purpose of using them up or transforming them in trade.

· The Act empowers the Authority to put public notices regarding certain goods informing the public that the goods are under investigation to determine whether the same may cause injury as well as the risks involved in consuming such goods–section 58(1) . Once the investigations are complete the Authority shall publish its findings in a daily newspaper with nationwide circulation

· Section 59(2)provides that damage shall be deemed to have been suffered by a consumer where:-

o the supply of goods by a person constitutes a contravention of this section by reason that the goods do not comply with a prescribed consumer product safety standard;

o a person suffers loss or damage by reason of a defect in, or a dangerous characteristic of, the goods or by reason of not having particular information in relation to the goods; and

o the person would not have suffered the loss or damage if the goods had complied with that standard, the person shall be deemed for the purposes of this Act to have suffered the loss or damage by the supplying of the goods.

Section 59(3) of the Act provides that a consumer will be deemed to have suffered damage regardless of whether there was a notice issued by the Authority to the effect that the goods were not fit for consumption

 

· Section 60(1) places no legal responsibility on a supplier to comply with set standards where the goods are to be used outside Kenya

· Where it appears to the Authority that a supplier has supplied or intends to supply goods which are the subject of an investigation or regarding which there is a notice on safety, or where the goods fail to comply with certain prescribed standards, the Authority is empowered to require the supplier to recall the goods within a period specified and disclose to the public, or to a class of persons specified, in the matter and do any other act that the Autority deems fit to mitigate on the damage/loss-section 61(1)

· Under section 61(3) the Authority has the responsibility to inform the supplier of it’s intended action to publish a notice warning the public of the condition of the goods , whereupon the supplier shall be given an opportunity to be heard as to why such notice should not be published.

· Section 63 provides for circumstances where a supplier,or entity will be held liable to compensate the consumer or buyer for loss or damage . These incude where:-

(a) an undertaking, in trade, supplies goods manufactured by the undertaking to another person who acquires the goods for re-supply

(b) a person (whether or not the person who acquired the goods from the undertaking) supplies the goods, otherwise than by way of sale by auction, to a consumer

(c) the goods are acquired by the consumer for a particular purpose that was, expressly or by implication, made known to the corporation, either directly, or through the person from whom the consumer acquired the goods or a person by whom any prior negotiations in connection with the acquisition of the goods were conducted;

(d) the goods are not reasonably fit for that purpose, whether or not that is a purpose for which such goods are commonly supplied; and

(e) the consumer or a person who acquires the goods from, or derives title to the goods through or under, the consumer suffers loss or damage by reason that the goods are not reasonably fit for that purpose

· However the right to compensation shall not arise where the goods are not reasonably fit for the purpose intended by reason of an act or default of any person (not being the undertaking or a servant or agent of the undertaking) or by an Act of God occurring after the goods have left the control of the undertaking, or where the circumstances show that the consumer did not rely, or that it was unreasonable for the consumer to rely, on the skill or judgement of the undertaking.(section 63(2))

· Section 64(1) -Supplier of defective goods is liable to compensate the consumer for loss or injury suffered

· Where the manufacturer of the goods is unknown , a person instituting a suit for supply of defective goods may seek information from the supplier known to him identifying the person who manufactured the goods the supplier of the goods to the supplier requested.-section 65(1)

· Section 65(2) -if, thirty days after the person has made the request or requests under subsection (1), the person still does not know who manufactured the goods, the subject of an action, then the person, or each person, that is a supplier to whom a request was made; and who did not comply with the request, is taken, for the purposes of the action, to have manufactured the action goods.

 

· Under section 66.(1)where there is an action brought against an entity where goods supplied are defecrtive, the entity shall not be held liable if:-

(a) the defect in the action goods which is alleged to have caused the loss did not exist at the time of supply of the goods;

(b) they had that defect only because there was compliance with a mandatory standard for them;

(c) the state of scientific or technical knowledge at the time when they were supplied by their actual manufacturer was not such as to enable that defect to be discovered; or

(d) if they were comprised in other finished goods, that defect is attributable only to the design of the finished goods, markings on or accompanying the finished goods or the instructions or warnings given by the manufacturer of the finished goods.

· This is established under section 71(1) of the Act which consists of a chairman, who shall be an advocate of not less than seven years standing and not less than two and not more than four other members, appointed by the Cabinet Secretary.

· Section 71(3) members of the Tribunal hold office for a period of not more that five years unless he/she resigns or becomes unfit to be a member as determined by the Cabinet Secretary or that the member has failed to attend at least three consecutive meetings of the Tribunal.

· Appeals from the decisions of the Authority shall be made to the Tribunal-section 73

· Any person aggrieved by the decision of the Tribunal has a right to appeal to the High Court. The Authority may appeal to the High Court in its own right-Section 77

· Under section 76(1) where an appeal is brought against a decision of the Authority regarding restrictive trade practices, consumer welfare matters or abuse of dominant positions, the stop and desist order or any other interim order or conditions issued by the Authority shall be observed, unless the Tribunal otherwise orders, pending the determination of the appeal.

· Section 76(2)-where an appeal is against a determination of the Authority regarding mergers, the merger to which the appeal relates may not be finalised pending the determination of the appeal

Section 92 gives the Magistrates court the jurisdiction to impose any penalty provided for in the Act .

 

SECTION

PARTICULARS OF OFFENCE

PENALTY

20(10)

· disclosing confidential information

Imprisonment for a maximum term of 3 years or a fine of not more than Kshs 500,000 both.

 

21(9)

· engaging in restrictive trade practices

imprisonment for not more than 5 years or a fine not more than Kshs 10,000,000, or both

22(6)

· Contravening provisions on restrictive trade practices by trade associations

 

imprisonment for not more than 5 years or a fine not more than Kshs 10,000,000, or both

 

24(3)

· abusing dominant position

imprisonment for not more than 5 years or a fine not more than Kshs 10,000,000, or both

 

27(4)

 

 

 

 

42(5)

· Non-compliance with a condition of exemption from restrictive trade practices

 

 

 

Contravening the provisions related to mergers

 

Imprisonment for a maximum term of 3 years or a fine of not more than Kshs 500,000 both.

 

imprisonment for not more than 5 years or a fine not more than Kshs 10,000,000, or both

 

54(1)

Every person who, whether as principal or agent and whether by himself or his agent

· Contravening or failing to comply with an order of the Authority after having lodged no appeal within the time allocated for appeals against such an order

· Contravening or failing to comply with any portion of an order made by the Tribunal on appeal.

 

imprisonment for not more than 5 years or a fine not more than Kshs 10,000,000, or both

 

55

A person who when, in trade in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:-

(a) falsely represents that—

· goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use;

· services are of a particular standard, quality, value or grade;

· goods are new;

· a particular person has agreed to acquire goods or services;

· goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits they do not have;

· the product has a sponsorship, approval or affiliation it does not have;

(b) makes a false or misleading representation—

· with respect to the price of goods or services;

· concerning the availability of facilities for the repair of goods or of spare parts for goods;

· concerning the place of origin of goods;

· concerning the need for any goods or services; or

· concerning the existence, exclusion or effect of any condition,warranty, guarantee, right or remedy.

 

Imprisonment for a maximum term of 3 years or a fine of not more than Kshs 500,000 both.

 

56(1)

· A person, in trade in connection with the supply or possible supply of goods or services to another person, engaging in unconscionable conduct

 

imprisonment for not more than 5 years or a fine not more than Kshs 10,000,000, or both

 

57(1)

· A person engaging in unconscionable conduct in trade in connection with the supply or possible supply of goods or services to another person or the acquisition or possible acquisition of goods or services from another person

imprisonment for not more than 5 years or a fine not more than Kshs 10,000,000, or both

 

59(1)

A person, in trade, supplying goods that are intended to be used, or are of a kind likely to be used, by a consumer if the goods are of a kind:-

· in respect of which there is a prescribed consumer product safety standard and which do not comply with that standard

· in respect of which there is in force a notice under this section declaring the goods to be unsafe goods; or

· in respect of which there is in force a notice under this section imposing a permanent ban on the goods.

 

imprisonment for not more than 5 years or a fine not more than Kshs 10,000,000, or both

 

60(1)

· Supplying goods that are non-compliant with a prescribed consumer product information standard

imprisonment for not more than 5 years or a fine not more than Kshs 10,000,000, or both

 

87

· hindering, opposing, obstructing or unduly

influencing any person who is exercising a power or performing a duty conferred or imposed on that person by the Act.

 

Imprisonment for a maximum term of 3 years or a fine of not more than Kshs 500,000 both.

 

88

· Any person who having been duly summoned to attend before the Authority,

(a)without reasonable excuse fails to do so; or

(b) being in attendance as required

· refuses to take an oath or affirmation as lawfully required by the Authority;

· refuses, after having taken the oath or affirmation, to answer any question to which the Authority may lawfully require an answer or gives evidence which the person knows is false; or

· fails to produce any document or thing in his or her possession or under his or her control lawfully required by the Authority to be produced to it

 

Imprisonment for a maximum term of 3 years or a fine of not more than Kshs 500,000 both.

 

89

contravening or failing to comply with a lawful order of the Authority given in terms of the Act

 

 

Imprisonment for a maximum term of 3 years or a fine of not more than Kshs 500,000 both.

 

90

· doing anything calculated to improperly influence the Authority or any member concerning any matter connected with the exercise of any power or the performance of any function of the Authority;

· anticipating any decision of the Authority concerning an investigation in a way that is calculated to influence the proceedings or decision;

· doing anything in connection with an investigation that would constitute contempt of court had the proceedings occurred in a court of law

· knowingly providing false information to the Authority,

 

 

Imprisonment for a maximum term of 3 years or a fine of not more than Kshs 500,000 both.

 

 

Section5(4)- Notwithstanding the provisions of subsection (1), the Government shall not be liable to any fine or penalty under this Act or be liable to be prosecuted for an offence against this Act.

 

Physical Address: 
Kenya Railways Staff Retirement Benefit Scheme Block 'D', 1st Floor, 
Haile Selassie Avenue. 
P.O. Box 36265-00200 
Nairobi, Kenya

 

Telephone: 
Direct Line: +254 20 2628233 
Pilot Line: +254 20 2779000

 

Complaints: 
[email protected]

 

Compliments: 
[email protected]

 

Whistle blowing: 
E-mail: [email protected] 
Hotline: 0202779114/0202779000

 

Social Media: 
Facebook: https://www.facebook.com/pages/Competition-Authority-of-KENYA 
Twitter: https://twitter.com/CAK_Kenya

 

E-mail: 
[email protected] http://www.cak.go.ke

 

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