Competition Act

This Act may be cited as the Competition Act.

obtain from a supplier more favourable terms; or

The object of the Act is to increase efficiency in the production, distribution and supply of goods and services.

Section 4 provides definitions and interpretive guidance: it defines 'competitor' and 'market', describes supply/acquisition concepts, lists factors including importation and economic circumstances, and sets numerical dominance benchmarks of not less than one-half for goods or services.

The Act applies to all persons, including the Government, state corporations and local authorities, insofar as they engage in trade; the Government is not liable to fines, penalties or prosecution under the Act.

Applies to "a citizen of Kenya or a person ordinarily resident in Kenya."

Subsection (2) requires that persons proposed under subsection (1)(f) be vetted and approved by Parliament through the relevant Committee before appointment.

Members of the Authority are entitled to be paid remuneration, fees, allowances and disbursements for expenses, subject to approval by the Cabinet Secretary.

Section establishes a Director-General appointed by the Authority with Parliament's approval, sets term limits, makes the Director-General an ex officio non-voting member, and designates the Director-General as the chief executive responsible for day-to-day management subject to the Authority.

Section 13 requires the Authority to employ staff, establish a competitive selection procedure, obtain written conflict-of-interest declarations before hiring, and include selection and employment practice statements in its Annual Report; it may engage consultants, direct conflicted persons to not participate, and share staff with other government entities; full-time employees must not take other paid work.

The section prescribes custody, use, judicial notice, and authentication rules for the Authority’s common seal: it must be kept in the custody of the Director-General or another person the Authority directs; it must not be used except on the Authority’s order; documents sealed and duly authenticated are to be judicially and officially noticed and authorizations by the Authority are presumed until proved otherwise; affixing the seal must be authenticated by signatures of the Chairperson and the Director-General (or a nominated member if one of them is absent).

Section 15 sets out that the Authority may delegate powers, has duties relating to making decisions under the Act, and may revoke or vary delegations.

Members, officers, staff and agents acting bona fide in execution of the Authority's functions are not personally liable; the Authority must pay court-approved expenses for such acts; no compensation is payable for loss caused by good-faith acts of the Authority or its authorised persons.

The Authority remains liable to pay compensation or damages to any person for injuries to them, their property or interests caused by exercise of powers under this Act or other law, or by failure of works.

The Authority may hold inquiries or sectoral studies to carry out its functions or when directed by the Cabinet Secretary; the Cabinet Secretary must specify a reporting period for such directions; the Authority must submit reports and identify sectors with unwarranted concentrations of economic power and advise on remedies; persons and organizations must provide information requested for inquiries or studies.

Section 19 allows the Authority to create divisions, requires the Authority to appoint Directors for those divisions, and vests day-to-day running and supervision of employees in the Director-General.

People who provide material to the Authority may claim confidentiality; the Authority must decide in writing and, if it denies confidentiality, treat the material as confidential for 14 days; under certain conditions the Authority must grant confidentiality; unlawfully disclosing confidential material is an offence.

Establishes the Competition Authority, requires it to be independent and to perform its functions and exercise its powers independently and impartially, and lists corporate powers including suing, property transactions, borrowing and other acts necessary for its functions.

The Authority must conduct and regulate its business as provided in the Schedule; except as provided in the Schedule, the Authority may regulate its own procedure.

Section 9 lists functions of the Authority, requiring it to promote and enforce the Act, handle complaints, educate the public, support and recognize consumer bodies, provide information and guidelines, conduct studies and investigations, liaise with and advise government and regulators, and publicise findings.

Agreements, decisions or concerted practices by undertakings that prevent, distort or lessen competition in trade in Kenya are prohibited, subject to statutory exemptions.

Section 22 treats certain trade association practices (exclusion of persons, pricing, terms of sale, recommendations) as restrictive trade practices, allows the Authority to examine association rules when assessing exclusions, deems certain recommendations to be restrictive practices, treats recommendations made to evade the Act as made by the association, treats membership as constituting agreement to comply with recommendations, allows a member to disassociate in writing to avoid being deemed a party, and makes contravention an offence punishable by up to five years' imprisonment or a fine up to ten million shillings.

Criteria for dominant position include controlling not less than one-half of goods or services in Kenya, or specified market-share thresholds of at least forty per cent but not more than fifty per cent, or less than forty per cent where market power exists.

Abuse of a dominant position in a market in Kenya (or a substantial part of Kenya) is prohibited; contravention by any person is an offence punishable on conviction by up to five years imprisonment or a fine up to ten million shillings, or both.

The Authority may monitor sectors or undertakings for abuse of buyer power and impose reporting and prudential requirements; it may require binding codes of practice; must be guided by existing agreements when investigating; must publish codes developed in consultation; and contravening subsection (1) is an offence punishable by up to five years imprisonment or a fine up to ten million shillings or both.

Applicants seeking an exemption for certain restrictive practices must apply in the prescribed form and manner, provide prescribed or Authority‑required information, indicate the nature of the exemption sought, and the Authority may call for written representations within thirty days of publication of the notice.

Section 26 lets the Authority grant exemptions, refuse and notify applicants with reasons, or issue certificates of clearance; exemptions can be granted only if exceptional and compelling public policy reasons exist and may be subject to conditions and time limits.

The Authority may revoke or amend an exemption or revoke a certificate of clearance if it was granted on materially incorrect or misleading information, circumstances have materially changed, or a condition of the exemption has not been complied with; the Authority may also apply to the Tribunal for a pecuniary penalty for non-compliance and the text sets out notice and a 30-day period to submit representations.

The Authority may, on application and subject to conditions it sets, grant exemptions for agreements or practices relating to exercising intellectual property rights.

Professional associations whose rules restrict competition must apply to the Authority in writing or in the prescribed manner for an exemption; the Authority must publish notice, allow 30 days for representations, consult relevant ministries, and may grant or reject the exemption with written reasons and Gazette publication; revocation follows notice, 30 days for representations and consultation; failure to apply or comply can be an offence punishable by up to five years imprisonment or a fine up to ten million shillings.

The Authority must publish in the Gazette notices of every exemption granted and every exemption revoked (with reasons). The Authority may, with the approval of the Cabinet Secretary and by notice in the Gazette, exclude categories of decisions, practices or agreements by or between undertakings from the application of this Part.

Section 31 requires the Authority to inform a complainant in writing if it decides not to investigate, and empowers the Authority to require persons or corporate officers to provide information, documents, appear to give evidence, and supply relevant records when investigating.

Authorized persons from the Authority may enter and inspect premises of traders or related persons, inspect goods, documents and records, search and copy computer data, seize computer outputs, and attach and remove items for examination (with receipt if removed); before inspecting they must inform the person in charge; the Authority may seek assistance from police and law enforcement agencies.

The Authority may receive evidence, take evidence on oath or affirmation, allow written statements as evidence, and a person attending has the same immunities and privileges as a High Court witness.

The Authority must give written notice of its proposed decision to each undertaking which may be affected by that decision.

The Authority convenes a hearing conference; it must keep a record; persons given notice may be accompanied; proceedings are informal; the Authority may terminate the conference if satisfied participants had a reasonable opportunity to express views.

After an investigation, the text provides for declaring the investigated conduct to be an infringement of the prohibitions in Section A, B or C of this Part.

The Authority may, by written order, direct one or more undertakings to stop and desist from specified conduct while an investigation continues, where subsection (1)(a) prevents serious irreparable damage or subsection (1)(b) protects the public interest.

The Authority may, at any time during or after an investigation into an alleged infringement of the prohibitions in this Part, enter into a settlement agreement with the undertaking(s) concerned.

The Authority must publish in the Gazette notice of any action under section 37 and of any agreement referred to in section 38.

A person aggrieved must appeal in writing to the Tribunal within thirty days of receiving the Authority's decision; a dissatisfied party may appeal the Tribunal's decision to the High Court within thirty days after notice, and the High Court decision is final.

Defines 'merger' as when one or more undertakings acquire or establish direct or indirect control over the whole or part of another undertaking's business, and lists forms and control criteria.

Section 42 allows the Authority to set merger thresholds (in consultation with the Cabinet Secretary and by Gazette notice), deems full payment by the acquiring undertaking to be implementation while a down payment up to 20% is not, makes unauthorized mergers without an authorizing order ineffective, creates an offence for contravention with penalties including up to five years' imprisonment or a fine up to ten million shillings, and empowers the Authority to impose a financial penalty up to 10% of prior-year Kenyan turnover.

When a merger is proposed, each undertaking involved must notify the Authority in writing or as prescribed; the Authority may request further information within thirty days of receiving the notification.

The Authority must make a determination on a proposed merger within specified time limits (60 days after notification; 60 days after receipt of requested information; 30 days after conclusion of a hearing), and the Authority may extend any of those periods by notice for up to a further 60 days if complexity warrants.

The Authority may decide to hold a conference about a proposed merger and may determine convening, the date/time/venue, and the matters to be considered.

The Authority may refer a proposed merger to an investigator and must inform the undertakings involved of that referral; any person may voluntarily submit documents or information about a proposed merger.

The Authority may revoke approval of a proposed merger on specified grounds; it must give written notice and allow persons thirty days to make representations; it may impose a financial penalty of up to ten percent of the preceding year's turnover.

Parties to a proposed merger may apply to the Tribunal for review of the Authority’s decision within thirty days after Gazette notice; the Tribunal must publish notice inviting submissions and may determine procedure and issue written reasons.

Approval of a merger does not excuse an undertaking from following other laws; a dissatisfied party may appeal the Tribunal's decision to the High Court within thirty days.

The Authority must prepare an annual report by 30 September each year covering the year up to the preceding 30 June and submit it to the Cabinet Secretary by 30 November; the Cabinet Secretary must transmit the report to the National Assembly within two months of receipt.

Section 84. Prohibition on disclosure of information

Staff must disclose private interests to the Chairperson; staff may not participate in related investigations unless the Authority directs; the Director-General, investigators and other Authority staff must not use confidential information for personal or others' advantage.

Investigations into alleged infringements cannot be started after three years from the date the infringement ceased.

A person must not hinder, oppose, obstruct or unduly influence anyone exercising a power or performing a duty under this Act.

If a person has been duly summoned to attend before the Authority and, without reasonable excuse, fails to do so

Anyone who contravenes or fails to comply with a lawful order of the Authority commits an offence.

The Authority may operate a leniency programme; an undertaking that voluntarily discloses a prohibited agreement or practice and cooperates with the Authority may not be subject to all or part of a fine.

Prohibits doing anything calculated to improperly influence the Authority or any member concerning matters connected with the exercise of any power or the performance of any function of the Authority.

A person convicted of an offence under this Act for which no penalty is specified may be punished by a fine up to five hundred thousand shillings, or imprisonment up to three years, or both.

A magistrate’s court has the power to impose any penalty provided for in this Act.

The Cabinet Secretary may, in consultation with the Authority, make rules to better carry the Act into effect.

The Authority must monitor production and distribution structures for harmful concentrations of economic power, investigate suspect sectors, and may require access to and copies of relevant ownership and market records.

The Authority may order a hearing when requested by an undertaking or when it considers appropriate, and where a hearing is contemplated or held the Authority must keep its determination on unwarranted concentration of economic power in abeyance pending conclusion of the hearing.

The Authority may order persons it deems to hold an unwarranted concentration of economic power to dispose of portions of their interests, and may also require them to observe other conditions to remove the concentration.

A person aggrieved by an order of the Authority may appeal to the Tribunal in the prescribed form; a party dissatisfied with the Tribunal's decision may appeal to the High Court within thirty days after service of notice, and the High Court's decision is final.

Anyone convicted of an offence under this Part is liable to imprisonment for a term not exceeding five years, or to a fine not exceeding ten million shillings, or both.

Defines false or misleading representations about goods being of a particular standard, quality, value, grade, composition, style or model, or having a particular history or previous use.

It is an offence for a person, in trade, to engage in conduct that is, in all the circumstances, unconscionable in connection with the supply or possible supply of goods or services to another person.

Suppliers must not engage in conduct that, in all the circumstances, is unconscionable in relation to supplying or acquiring goods or services.

If an investigation under subsection (1) is completed, the Authority must promptly publish in at least one national daily newspaper the results and any proposed action; the Authority may delegate the section's functions to relevant specialized government agencies.

A person must not supply goods that fail to comply with a prescribed consumer product safety standard or goods declared unsafe or permanently banned under this section; loss caused by a defect or lack of information is deemed to be caused by the supplying of the goods.

It is an offence in trade for a person to supply consumer goods that do not comply with a prescribed consumer product information standard, unless the person has complied with that standard.

The Authority shall, by notice, require a supplier to take actions (recall, identify defects/dangerous uses, dispose, repair, replace or refund within a specified period) where goods may cause injury or do not meet standards; the Authority must notify affected parties before publishing certain notices, consider representations and communicate its decision within twenty-one days; an aggrieved person may appeal to the Tribunal.

The Authority must notify the public that a specified standard (or part of it, with any specified additions or variations) is a consumer product safety standard under the Act.

An undertaking may be liable to a consumer for loss or damage when it supplies goods for a particular known purpose and the goods are not reasonably fit for that purpose, subject to certain exceptions.

A person who supplies defective goods in trade must compensate anyone who suffers loss or injury from the defect.

If the actual manufacturer cannot be identified, the section treats either (a) the person who manufactured the goods or (b) the supplier (in specified circumstances) as having manufactured the goods.

Lists defenses (grounds for exemption) to liability for defective goods, including defects not existing at supply, defects caused by compliance with a mandatory standard, defects undiscoverable given scientific/technical knowledge at time of supply by the actual manufacturer, and matters relating to design, markings, or instructions of the finished goods.

The Authority must consult with the Kenya Bureau of Standards on defining, specifying and grading goods by quality for the purposes of this Act.

The Authority may refer consumer complaints to specialised government agencies in appropriate circumstances; those agencies must decide on the complaints and inform the Authority and complainants.

Recognized consumer bodies may notify the Authority about alleged infringements; the Authority must investigate upon receiving a notification; notifying consumer bodies must cooperate with investigations.

A person who contravenes any provision of this Part commits an offence and, on conviction, may be sentenced to up to five years' imprisonment, or fined up to ten million shillings, or both.

The Authority may initiate investigations into a consumer complaint on its own initiative or after receiving information or a complaint from a person, government agency, Ministry, or consumer body.

Establishes the Competition Tribunal, sets composition and qualifications, quorum, member resignation and removal mechanisms, and entitles members to fees determined by the Cabinet Secretary.

The appellant must appear before the Tribunal in person or by an advocate at the day and time fixed for the hearing; the Tribunal may postpone the hearing if the appellant cannot attend for reasons such as absence from Kenya, sickness, or other reasonable cause.

Persons are entitled to appeal to the Tribunal.

The Tribunal may hold hearings in camera, may prohibit publication of reports or descriptions of proceedings (but must not prohibit publication of parties' names or Tribunal decisions), and may confirm, modify or reverse appealed orders.

The Tribunal may direct the Authority to reconsider an appeal instead of deciding it, and must advise the Authority of its reasons and give directions; the Authority must have regard to those reasons and directions when reconsidering.

The Tribunal may order that interim orders or conditions issued by the Authority need not be observed while an appeal is pending.

The Authority has a right to appeal to the High Court against any decision of the Tribunal.

The Authority must disclose the sources of its funds in its annual report; it may make rules setting filing and other fees; funds include grants, parliamentary allocations, fees and penalties, refundable litigation costs, and other incidental payments.

The Authority's financial year is a 12‑month period ending on 30 June each year.

The Authority must prepare and approve annual revenue and expenditure estimates at least three months before each financial year, submit approved estimates to the Cabinet Secretary, and no expenditure may be incurred except under those estimates or with prior written approval from the Cabinet Secretary and the Permanent Secretary to the Treasury.

The Authority must keep proper books and records of its accounts; the Authority's accounts must be audited and reported upon by the Auditor-General under the Public Audit Act (Cap. 412B).

The Authority may invest its funds in securities (including those in which trust funds may be invested) with Cabinet Secretary approval for other securities, and may deposit monies not immediately required in banks subject to the Cabinet Secretary for Finance's approval.

Applications and investigations that were ongoing immediately before this Act began must be taken over by the Authority.

Defines "appointed day" as the day the Act comes into force, and defines "Department" as the Monopolies and Prices Department of the Treasury existing immediately before the appointed day.

Public officers must, without fee and on request by or for the Authority, take all lawful steps to complete the transfer of the Department's property described in subsection (1).

On the appointed day, all rights, powers, liabilities and duties that immediately before that day were vested in, imposed on or enforceable by or against the Government for and on behalf of the Department are transferred to, vested in, imposed on or become enforceable by or against the Authority.

On and after the appointed day, pending legal proceedings by or against the Government on behalf of the Department must be carried on or prosecuted by or against the Authority.

Employees of the Department in office on the appointed day shall be deemed seconded to the Authority (subject to subsection (2)); such employees may opt to remain in the Authority and terms may be agreed; entering an agreement terminates Government service without severance pay; the Department's annual estimates for that year are deemed Authority estimates and the Authority may vary them with Cabinet Secretary approval.

The Restrictive Trade Practices, Monopolies and Price Control Act (Cap. 504) is hereby repealed.