The East African Competition Authority has started operations with a focus on investigating firms and trade associations engaged in malpractices and exploitation of consumers through price fixing.
The authority is also undertaking sector studies to inform the competitiveness of the regional economy.
The EastAfrican has learnt that the Authority which is based in Arusha has begun its work, although the public are yet to be notified when they can start engaging with it as provided for in the EAC Competition Act, 2006 and the EAC Competition Regulations, 2010.
“The Authority is already operational,” said Lilian Mukoronia, the Authority’s deputy registrar in-charge of mergers and acquisitions.
Ms Mukoronia said the Authority is already undertaking market studies in selected sectors to inform of the prevalent malpractices.
The director- general of the Competition Authority of Kenya (CAK) Wang’ombe Kariuki had earlier raised concerns over the creation of cartels among firms operating across the borders with a view of exploiting consumers.
“There is a serious problem of cartels as some of these companies operate across the region,” he said.
The operationalistaion of the EAC Competition Authority comes even as some partner states struggle to enact competition laws and set up institutions to deal with trade malpractices and anti-competitive behaviours in the market.
Kenya and Tanzania are the only two countries that have national competition laws together with respective institutions.
Burundi has a competition law and establishment of the national competition agency is awaiting approval while Rwanda has a competition law while the establishment of a national competition agency was approved and gazetted by Parliament. South Sudan and Uganda have both drafted competition Bills.
The EAC Competition Authority handles matters with a regional dimension and therefore there is no obligation for partner states to have enacted competition laws and set up institutions to enable the Authority to implement its mandate.
The EAC Competition Act 2006 which came into force in December 2014 mandates the Authority to promote and protect fair competition in the Community and to provide for consumer welfare. The Act prohibits among others anti-competitive trade practices and abuse of market dominance.
It provides for notification of mergers and acquisitions, notification of subsidies granted by partner states and regulates public procurement.
The Authority has appointed five commissioners — each partner state nominated one commissioner. The Commissioners were considered and appointed by the Council of Ministers and were sworn into office in 2016.
The authority is also reviewing the EAC Competition regulatory framework and developing laws.
In 2015, Kenya launched investigations into the conduct, practices and procedures of trade associations, which have come under the spotlight for colluding with its members to fix consumer prices.
This was after it was established that despite clear provisions in the Kenyan competition law, many trade associations continued to have rules, practices and procedures that contravene the Act.
These trade malpractices are also undermining the region’s competitiveness as an investment destination.
Top on the list of trade associations investigated include those in the financial, agriculture and agro-processing sectors.
Kenya introduced the Special Compliance Programme, to ensure Kenyan firms complied with the competition law.
Individuals found engaging in restrictive trade practices are, if convicted, liable to imprisonment for a term not exceeding five years or to a fine not exceeding $107,526.88.
Trade associations have been blamed for being at the centre of many cartels, which are partly responsible for the high prices of goods and services in Kenya.
According to CAK, the high cost of living in the country is partly driven by unscrupulous practices and a cartel-like business environment.