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Firms operating in Kenya with a footprint in the region are increasingly finding themselves on the radar of a regional watchdog for violation of consumer rights.
The Comesa Competition Commission has in recent weeks said it will probe Airtel and Kenya Airways for what it said was unconscionable conduct when dealing with customers.
The two firms add to a growing list of companies that are being investigated by the regional body for incidents such as failure to make full disclosures to consumers when charging them or generally failing to fulfil contractual obligations.
The commission has recently launched investigations on agreements that Coca-Cola had made with bottlers and distributors and also flagged two fertiliser firms for using their dominant positions to retain the high cost of agricultural input, and in turn, sustain the high cost of production.
A consumer rights lobby, Consumers Federation of Kenya (Cofek), noted that the rise in the number of cases being investigated not just at the regional level but also locally is due to a mix of factors including a decline in customer service among companies and also the regulatory authorities increasingly being responsive to consumer complaints.
There is also improved surveillance that is seen in regulators initiating their investigations into different firms.
Cofek secretary-general Stephen Mutoro said a challenging business environment has seen many firms cut costs in certain areas, and in some instances use questionable methods to grow earnings.
“There has been a lot of laxity among firms in offering customer service. With the business environment being unpredictable, many firms might be employing the wrong tactics to remain afloat,” he said.
"Regulatory bodies have also improved on service delivery and are increasingly looking at issues raised by consumers as well as initiated probes based on their investigations in the market."
The Comesa Commission last week said it had started a probe into Airtel’s mobile money transfer operations in the region including Kenya for allegedly failing to disclose all charges that consumers incur when using its international mobile money transfer service.
“The commission has commenced investigation into possible violations of Articles 27 and 28 of the Regulations by international money transfer (IMT) service provided by Airtel Mobile Commerce BV,” said the Commission.
Article 27 of the Comesa Competition Regulations prohibits firms from giving false or misleading representations to consumers while Article 28 prohibits companies from engaging in "conduct that is, in all circumstances, unconscionable".
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“In the case of Airtel Mobile Kenya, the charges displayed to the sender before confirming the transaction is, in some instances, different from actual charges indicated in the final confirmation message and details of the intermediary parties, as well as the exchange rate use are not disclosed to consumers.”
Other Airtel subsidiaries that are under probe by the commission include Airtel Mobile Commerce Malawi and Airtel Uganda.
“The alleged conduct is considered misleading and unconscionable as it denies consumers the right to material information required to make informed decisions,” said the commission, adding that it would investigate to determine whether the firm had violated the regulations.
It has also opened a similar investigation on MTN Group’s mobile money unit in Uganda for failure to make full disclosures to customers making international mobile transfers as well as displaying different amounts to the sender while the recipient receives a different amount.
National flag carrier Kenya Airways is also being probed for alleged mishandling of its passengers through major delays that resulted in missed flights, while it was reluctant to assist them get to their final destination.
The commission on January 24 said it is probing Kenya Airways following an allegation of a delay in one of its flights that caused major inconvenience to its customers, some of whom missed their connecting flights.
“The commission became aware, through complaints raised to Kenya Airways by four passengers that on August 18, 2024, while travelling with KQ… from Entebbe to Nairobi on their way to Livingstone, they experienced an unexpected delay of their flight at Entebbe International Airport for over six hours causing a significant disruption to their connecting flights.
“As a result, the passengers missed their connecting flights from Nairobi to Lusaka (a KQ flight) … and from Lusaka to Livingstone (Zambia Airways flight).”
In addition to the six-hour delay at Entebbe, the passengers would spend another seven hours at the Jomo Kenyatta International Airport (JKIA) before they could travel on a rebooked KQ flight to Lusaka.
“(The complaint) further alleged that KQ did not make an effort to reroute the passengers to their destination,” said the commission.
The carrier however did not offer assistance including meals and accommodation in Lusaka after the passengers missed their flight.
KQ, according to the commission—citing correspondence between the carrier and the passengers after they complained via email—said: “Accommodation, meals and new flight connections were outside their contract of carriage as its contract with the passengers had terminated on landing in Lusaka.”
The commission also said it had received another complaint from a different passenger flying from JKIA to Entebe whose flight was delayed for over six hours.
The December 2 flight was set to depart at 1.35am but left at 7.30am. The airline did not provide meals or accommodation, with passengers having to make their own private arrangements while others spent the night at the airport.
“KQ may not be in line with the code of practice in the industry as well as other international conventions governing the aviation industry and its terms of carriage,” said the commission.
Kenya Airways also made headlines last week after an altercation between its staff and a Nigerian passenger who claimed to have been mistreated by the airline.
The passenger, identified as Gloria Omisore, had been travelling from Lagos to Manchester through Nairobi and Paris.
The carrier said that on arrival in Nairobi for her connecting flight to Paris, it was discovered that Omisore did not have a Schengen Visa, which is a requirement for passengers entering any European Union country.
KQ said the passenger was offered an alternative to travel through London and onward to Manchester, which she declined.
“Unhappy with this option, the guest demanded accommodation, which Kenya Airways does not provide in cases where boarding is denied due to visa requirements," the airline said in a statement.
"It is the responsibility of passengers to ensure they have the necessary documentation for their journey.”
There followed an altercation with KQ staff at the transfer desk that was recorded on video and would later go viral online.
KQ described the event as distressing as the “guest resorted to inappropriate behaviour by removing and throwing three used sanitary pads at our employees”.
“Our employees deserve to work in a safe and dignified environment, and we do not tolerate any abuse from our employees or guests,” said the carrier, adding that “the incident has been reported and is under investigation by the relevant security agencies.”
The carrier would later be on the receiving end of anger from Nigerians, including the country’s civil aviation authorities.
The Nigerian Civil Aviation Authority (NCAA) said it had summoned KQ to address the matter including an allegation of a history of mistreating Nigerian passengers.
Locally, Mutoro noted that the Competition Authority of Kenya (CAK), which has in recent months named firms abusing consumer rights and at some point imposed record fines, has also been proactive but he wondered if it can sustain the regulatory heat.
“We appreciate that CAK has new management and they have upped their game, the only question we have is whether they will be able to sustain it.
“The challenge has been that being a regulator charged with overseeing sectors that also have their regulatory bodies, there are sectors where CAK has not been visible,” he said.
Mutoro also noted that many local firms take advantage of clauses in the Competition Act that allow them to settle disputes, adding that CAK should press on and see the cases to their conclusion, a move that can see the firms “pay dearly for consumer rights violations and serve to deter other companies from violating the rights of Kenyans”.
Section 38 of the Competition Act allows CAK to agree to settlement with the firm being investigated “any time, during or after an investigation”.
The agreement may include an award of damages to a complainant and the imposition of a penalty.
“There are also instances where complaints never get to a conclusion as the companies exploit a clause of the act on settlement of complaints.
"So anytime customers complain or the regulator does investigations, the companies will pay a settlement,” said Mutoro.
“That is why while CAK might be good with raising issues, it does not follow through as firms exploit this clause. We hope the management sustains the heat but also ensures that the settlement clause is not abused so that criminal acts can be punished to the full extent of the law and not let people go scot-free.”
In October, the Comesa Commission started investigating Coca-Cola for alleged anti-competitive behaviour.
It noted that the company had concluded “restrictive bottler’s and restrictive distribution agreements or arrangements with affiliates in Africa, which affect trade between member states and have as their object or effect the prevention, restriction or distortion of competition within the Common Market.”
The Comesa consumer watchdog in November last year flagged two of the largest fertiliser suppliers in Kenya—Yara and ETG—for taking advantage of their dominant position in the market to sell their products at exorbitant prices.
The firms have a combined market share of 80 per cent at 40 per cent each, while OCP is at distant third with a market share of about 20 per cent.
The commission noted that the two leading firms could be sharing information and using this to keep prices high such that even when prices drop internationally, local prices remain high.
It found that local fertiliser prices were higher by up to 142 per cent than they should ideally be on account of the firms using their market positions to retain high costs.
“The position of the two leading suppliers has also been reinforced by being the only firms contracted under the fertiliser subsidy programme to supply large volumes,” said the commission in its report.
“The large companies appear to work closely together, sharing shiploads at times and appear to prepare monthly cost build-ups using standard costs from benchmarks.
"The companies can track market shares quite closely, appearing to reflect high levels of information exchange in this concentrated market.”
“The market outcomes reflect prices which have not reduced in line with international prices and increased mark-ups to Kenyan buyers.”
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The Standard Group Plc is a
multi-media organization with investments in media platforms spanning newspaper
print operations, television, radio broadcasting, digital and online services. The
Standard Group is recognized as a leading multi-media house in Kenya with a key
influence in matters of national and international interest.
join