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Kenya strengthens competition regulation but leaves grey areas

11 August 2017
– 3 Minute Read

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Kenya strengthens competition regulation but leaves grey areas

Kenya is making good progress with its latest efforts to strengthen competition regulation but there are still question marks over some key areas.

These include the rules that will govern the work of the newly established Competition Tribunal and, more controversially, a High Court ruling in early June 2017 restoring the competition powers of the Communications Authority of Kenya (Communications Authority), the regulator of that sector.

Tribunal could speed up competition reviews

“The establishment of the Kenya Competition Tribunal is a welcome development,” says Xolani Nyali, senior associate at the Cape Town office of pan-African law firm Bowmans. “Until now, companies wanting to appeal a decision of the Competition Authority had to appeal to the High Court – with all the attendant costs and time.”

A grey area, however, is that the rules under which the Competition Tribunal will operate have not yet been set. “We will only know when the rules are published whether Kenya will really have an effective Tribunal,” Nyali says. 

“Hopefully, once the Tribunal has its rules in place and is able to start hearing appeals, the amount of time between an application for a review and a decision will be reduced, and competition matters will be resolved in a more cost effective manner ,” he says. “Another likely benefit is that the Competition Authority, although known as one of the best-performing competition authorities in Africa, will further sharpen its analysis of cases as its decisions could be contested before a specialist body.”

Competition powers of the Communications Authority restored

While time will tell how soon the new Tribunal is able to make its presence felt, a somewhat contentious development that competition law experts are watching closely is the reinstatement of the competition powers of the Communications Authority.

“This is quite controversial and changes the dynamic of competition regulation in the telecommunications sector,” says Joyce Karanja-Ng’ang’a, partner at Bowmans in Nairobi. “It will be interesting to see if other sector regulators will want to follow a similar approach.”

She is referring to the High Court decision in June 2017 to strike down the legal obligation that the Communications Authority has to consult both the Competition Authority and the Minister of Information, Communications and Technology before punishing an operator for abuse of dominance.

This consultation requirement was part of the Miscellaneous Amendments Bill 164, passed into law in December 2015. “Given that the Competition Act was enacted in 2011, one could argue that the thinking of Parliament at the time was that there should be one competition authority to look at competition matters in Kenya holistically; this decision seems to completely turn that around,” says Karanja-Ng’ang’a. 

She notes that the Competition Authority views itself as the primary regulator for competition matters in Kenya. “While seeing itself as the primary competition regulator, it has over the years engaged with certain sector-specific regulators to enter into MoUs on how they will consult on competition matters.”

Given the latest court ruling, which essentially re-establishes concurrent jurisdiction between the Competition and Communications authorities, competition law stakeholders will be watching developments closely, says Karanja-Ng’ang’a. “It will be interesting to see if the High Court decision will be appealed.”