KENYATTA UNIVERSITY UNIVERSITY EXAMINATIONS 2011/2012 FOURTH YEAR FIRST SEMESTER EXAMINATION FOR THE DEGREE OF BACHELOR OF LAW

COURSE CODE: LCC 403 COURSE TITLE: COMPETITION LAW Instructions: i) Plagiarism will result into automatic referral to disciplinary action and awarding of zero marks. ii) Assignment must be typed and not to exceed 4 pages, Times New Roman, 1.5 spacing
iii) Assignment to be handed in at 5: 00 PM on 9th March 2012 at the Private Law Department.

iv) No extension will be granted for late submission of the assignment. Zero marks will be awarded. v) Proper referencing style to be used. vi) One point is one mark. Question Discuss the competition policy in Kenya and analyze whether it meets international standards of best practice. (15 Marks)

History....

Kenyas current competition law aims to protect the process of competition. It emphasises reducing entry barriers and restrictive business practices, irrespective of which group they affect. The Act covers three main areas: Restrictive Trade Practices (RTPs, section 4-21): Addresses associations, discrimination in supply, predatory trade practices, collusive tendering and collusive bidding at an auction; Control of Monopolies (sections 22 to 32): Defines provisions for the control of monopolies, mergers and takeovers; and Control and Display of Prices (sections 33 to 39): Defines the provisions relating to price control, which are now being revoked. The law depicts a broad range of entities, key among them consumers, customers, distributors, monopoly undertakings, retailers, trade association and wholesaler, all falling under Section 2 of the Act.

Best practice features of a competition authority Independent, insulated from political interference. Transparent, well-designed administrative mechanisms, regulations and procedures. Separate investigation, prosecution and adjudication functions. Checks and balances with rights of appeal, reviews of decisions, and access to information on legal and economic interpretations. Expeditious and transparent proceedings which safeguard sensitive business information. Provisions for imposing significant penalties.

In short, the current Act (Cap.504) departs from what is increasingly considered desirable in terms of international best practice. Best practice would be to include measures in the act which ensure the autonomy of the competition agency, separate the responsibilities for investigation and adjudication, and enable the competition agency to impose sanctions at a level which act as an effective deterrent. A new Competition Bill, (2009) has been presented to parliament and may be passed in the near future. This Bill does seem to address a number of the current deficiencies in the law.

Currently, the national competition law is mainly embodied in the Restrictive Trade Practices, Monopolies and Price Control Act (MPCA), Cap.504 of the Laws of Kenya, which established the Monopolies and Prices Commission (MPC), within the Finance Ministry. It seems that the current Kenyan competition law was meant to be a transitional measure to move the country from a price control regime to one based on free market principles. The Government of Kenya established a Task Force to review the law in May 2005. The Team submitted a report to the Minister, and in March 2009, a draft Competition Bill was published and presented for discussion in the National Assembly. The Bill has gone through two readings in Parliament and is currently being discussed by the Finance, Planning and Trade Committee. Administrative deficiencies in the law have been highlighted in the voluntary peer review on competition policy conducted by UNCTAD in Kenya1. These deficiencies have also been re-iterated in a recent speech made by Peter Kanyi of the MPC2.

The Kenyan competition authority has limited formal independence in that it is an integral part of the Ministry of Finance, its budget is within the Ministrys budget and the Minister appoints its Commissioner. The MPC has limited powers of its own, and to some extent appears to operate as an advisory body to the Minister. The Minister is not bound to accept its advice, but it seems that Ministers have generally been reluctant to reject advice publicly, though we understand that there have sometimes been discussions around the need for the MPC to alter its advice. In addition, investigations into unwarranted market concentration cannot be independently initiated by the MPC (monopolies control commision) only on the instructions of the Minister.

There is presence of competition law and authority in Kenya but it is not independent from the government. The activity level of the competition authority can however be said to be moderate.

United Nations Conference on Trade and Development (2005)

Peter Kanyi (3rd September 2009)

Bibliography
1. http://www.cuts-

international.org/ARC/Nairobi/Competition_in_Energy_Sector/pdf/Competition_Law_in_Kenya.pdf
2. www.unctad.org/templates/Download.asp?docid=6467&lang. 3. www.ifc.org/...CompetitionPolicyTanz.../Conferences_... 4. www.compcom.co.za/.../Overview-ofKenya-Competition-Law.ppt

5. www.unctadxi.org/templates/Event____2939.aspx?selected=doc 6. www.kenyalaw.org/Downloads/Bills/2009/200903.pdf 7. www.cak.go.ke/index.php?option=com_content&view...id... 8. www.cak.go.ke/index.php?option=com_content&view...id... 9.