The Competition Authority of Kenya (CAK) has silently published its Final Consolidated Administrative Remedies and Settlement Guidelines (Guidelines), which outline the general methodology and analytical framework that the CAK will follow and apply in determining both administrative remedies as well as settlement arrangements for infringements of the Competition Act No. 12 of 2010 and the Competition (General) Rules, 2019.
These Guidelines are not binding and as such, would not fetter the CAK’s ultimate discretion in the calculation of administrative penalties or settlement terms. The Guidelines further prescribe that in the event of any inconsistency with the Competition Act or the Rules, the Competition Act and the Rules would prevail.
The CAK sets out that the objectives of the Guidelines include enhancing transparency, predictability and consistency in the determination of administrative penalties and are aimed at providing a cost-effective and efficient dispute resolution mechanism for micro, small and medium enterprises.
For all the contraventions covered in the Guidelines, the starting point and the maximum administrative penalty that can be imposed shall not exceed 10% of the gross annual turnover in Kenya of the undertaking in question.
In the case of failure to notify a merger or providing misleading or incorrect information in relation to a merger filing, the CAK will consider the gross annual turnover in the year preceding implementation of the merger.
For anti-competitive practices, penalties will be based on the total gross annual turnover of an undertaking in its preceding financial year – this is a significant departure from the previous Guidelines which applied penalties on the turnover that has been affected by or relevant to the anti-competitive conduct in question (as is the case in jurisdictions such as South Africa, the United Kingdom and the European Union).
These Guidelines supersede previously issued Guidelines in relation to settlements, namely the Fining and Settlement Guidelines, 2018, Administrative Remedies Guidelines for Consumer Protection, 2017 and the Competition Administrative Penalties and Settlement Guidelines, 2020.
Accordingly, it covers the following broad areas of contravention: restrictive trade practices, control of mergers, abuse of buyer power, and violations under consumer welfare as well as the procedure for pursuing settlements. The Guidelines note that any investigation that was instituted before its publication will be considered under Guidelines that were previously applicable.
