The East African Community law on competition will come into force in December promising a boost to cross-border trade. The EAC Competition Act 2006 seeks, among other things, to promote fair trade and ensure consumer welfare and to establish the EAC Competition Authority.
It grants consumers the legal right to take on unscrupulous traders who sell them substandard products and those who offer poor quality services.
The EAC Council of Ministers recently decided that the law should become operational in December bringing to an end an eight-year delay occasioned by intermittent haggling and backpedalling by partner states.
Trade specialists say that while some EAC partner states had enacted national competition Acts, these laws are deemed inadequate to deal with cross-border and multi-jurisdictional competition cases. They add that co-operation at the bilateral level may be enough to redress some non competitive and restrictive business practices, but a regional framework provides a more consistent and sustainable way of addressing these regional issues.
The East African Business Council executive director, Mr Andrew Luzze said that as the cross border trade grows, a regional competition law becomes crucial to check unfair trade practices.
Available statistics show that the EAC’s total intra-regional trade soared from $2 billion in 2005 to $5.8 billion in 2012, while the total intra-regional exports grew from $500 million to $3.2 billion in the period under review.
“Without regional competition law, monopolies or firms with a lion’s market share can easily abuse their market dominance by engaging in such activities as price fixing, sharing of markets and compromising quality to the detriment of consumers” Mr Luzze said.
According to him the EAC competition law will create a level playing ground for major and small companies, contrary to the current environment where major merchants tend to collude and fix prices.
EAC spokesperson, Richard Owora said that the Secretariat is working overtime to establish a regional competition authority to oversee the operationalisation of the law.