Authority puts 17 firms on notice over unethical business practices

By NICHOLAS WAITATHU

The Competition Authority is investigating local and international companies for applying unethical business practices in the market.

The Authority’s Director-General Wang’ombe Kariuki yesterday said 17 companies across various sectors are under probe.

The firms — including telecommunications, cement, and tea industry —have been accused of abusing their market dominance to restrict entry of new and smaller firms.

“Some of these companies are known to enjoy over 50 per cent dominance thus giving them undue advantage in the market,” Kariuki said.

 “As a result of their near-monopoly power in the market, some of the big companies have applied restraining tactics to segment the market,” he added. 

 “This destabilises operations of relatively smaller competitors and bar entry of new firms into the business.”  Kariuki said the resulting unfair trade practices have left consumers exposed to exploitation through high commodity prices, poor services as well as sub-standard goods.  This has directly or indirectly impacted on the health of Kenyans.

“Under the law, no market player is allowed to apply obstructive actions over the others as the same will impact negatively on the State and health of consumers,” noted Kariuki.

 He condemned unhealthy competition in the beverage market — where competitors have gone at each other with hammer and tongs, hijacking competitor’s products on transit and destroying them.

In the past, others have destroyed each other’s tools of advertising like uprooting billboards of rival companies billboards and banners.

“Ultimately, it is the consumers and the economy as a whole that suffer as a result of these unethical business practices,” Kariuki said. 

Kariuki said the Authority is monitoring the oil and dairy sectors to find out whether some of the supply chain constraints have been abused.

 “The supply chain controls have to some extent contributed to quality of commodities produced and, most of which are sold at very prices beyond majority’s reach,” he said.

This was during an interview at the sidelines of a  two-day African competition forum workshop on agency’s effectiveness at a Nairobi hotel.

Since its inception, the Authority has approved eight mergers and acquisitions and eight more applications are awaiting approval.

Most of the expected mergers and acquisitions are in hospitality and information communication technology industries.