The Competition (Amendment) Bill, 2026

SPECIALISSUE

Kenya Gazette Supplement No.17 (National Assembly Bills No.4)

REPUBLICOFKENYA

KENYA GAZETTE SUPPLEMENT

NATIONALASSEMBLY BILLS,2026

NAIROBI,19th February,2026

CONTENT

| Bill for Introduction into theNational Assembly- | PAGE | |----------------------------------------------------|--------| | The Competition(Amendment) Bill,2026 | 67 |

THE COMPETITION(AMENDMENT)BILL,2026

A Bill for

AN ACT of Parliament to amend the Competition Act; and for connected purposes

ENACTED by theParliament ofKenya,as follows-

• 1.This Act may be cited as the Competition Short title. (Amendment) Act,2026.
• 2.The Competition Act,in this Act referred to as the "principal Act",is amended in section 2

by deleting the definition of "person"and substituting

therefor the following new definition-

• (a)"person"has the meaning assigned to it under
• Article 260 of the Constitution;
• (b) in the definition of "undertaking",by inserting the words"or a natural person"immediately after the
• words"trade association";
• (c) inserting the following new definitions in their proper alphabetical sequence

"business consumer"includes a business or economic entity thatpurchases or offers topurchase goods or services otherwise than for thepurpose of resale or conversion as an input in manufacturing or production of goods or articles for sale;

"counterparty"means the other party involved in a

transaction or agreement;

"digital activity"means the provision of a service

through theinternet,or provision of digital content whether for consideration or otherwise and whether or not such activity is multisided and includes-

• (a) online intermediation services,including online
• marketplaces and application stores;
• (b) online search engines;
• (c) online social networking services;
• (d) video-sharing platform services;

Amendment of section2ofCap.

504.

• (e) independent interpersonal communication services;
• (f) operating systems;
• (g) cloud computing services;and
• (h) online advertising services;

"digital market"means a market where goods or services are primarily exchanged through digital platforms or online channels encompassing virtual marketplaces and the confluence of supply and demand for digital goods, services and rights to access;

"intermediate a transaction"means to facilitate the completion of a transaction between buyers and sellers in a digital market.

"multi-home"means users engaging with multiple significant switching costs and inconveniences;

"privatization"has the meaning assigned to it under

section 2 of the Privatization Act;

"product information standard" means a standard relating to information,safety and health developed by the relevant government agency for the purpose of consumer

benefit;

"strategic market position"has the meaning assigned

to it under section 4(4);and

"superior bargaining position" has the meaning assigned to it under section 4(6).

• 3.Section 4 of the principal Act is amended by inserting the following new subsections immediately after subsection(3)
• (4) A person has a strategic market position in a
• market if the person influences market prices, quality, service,output or innovation to an appreciable extent independentof competitors,suppliers,users or consumers.
• (5) In addition to other relevant matters, in assessing or determining whether an undertaking has a strategic market in a digital market,whether the digital activity is undertaken in one or multiple digital markets,the Authority shall, take into account-

No.18of2025

Amendmentof

section4 of Cap. 504.

• (a) the direct and indirect effects of the network and the entry barriers arising in connection with the
• network effects;
• (b) the economies of scale and scope enjoyed by the undertaking,including their access to data relevant for competition;
• (c) the costs of switching for users and the ability and
• propensity for users to multi-home;
• (d) the competitive pressure driven by innovation; and
• (e) the importance of the intermediary services
• provided by the undertaking for accessing supply and sales market,including the size of the undertaking and the number of business and individual users it has and the period over which that level of importance hasbeen held.
• (6) A person has a superior bargaining position in a market if the person creates an imbalance in the rights and obligations relating to its commercial relations with a counterparty and the counterparty cannot find a viable and satisfactory alternative in the market.
• (7)Inassessing ordeterminingwhetheran undertaking has superior bargaining position in a market,it shall not be necessary to establish that the undertaking has a dominant market position or market power in the relevant market.
• 4.Section 9(1) of the principal Act is amended-
• (a) inparagraph word word
• (g),byinsertingthe "evaluations" immediatelyafter the "inquiries";
• (b) by deleting paragraph (n) and substituting therefor
• the followingnew paragraph
• (n) advice theCabinet Secretary,other government agencies and stakeholders on any matter relating to competition and consumer welfare;and
• following new paragraph
• (c) byaddingthef immediately after paragraph (n)

Amendment of section9 of Cap. 504.

Abuse of buyer power.

• (o) in consultation with the Cabinet Secretary,
• foster strategic partnerships with national,regional and international bodies on matters related to competition and consumer welfare.
• 5.Section 18 of the principal Act is amended in subsection (4) by deleting the words "competition abuse of buyer power or consumer welfare"and substituting therefor the words"competition, consumer welfare,abuse of buyer power or abuse of superior bargaining position"
• 6.Section 23 of the principal Act is amended
• (a)in subsection (l)(a),by inserting the words "intermediates a transaction"immediately after the word"distributes";
• (b) in subsection (2)
• (i) by deleting the words "though not dominant" appearing in paragraph (a);
• (i) by adding the following new paragraph
• immediately after paragraph (b)
• (c) in the case of a digital market, controls less than forty per cent of the market share but has market power including a significant market position.

7. The principal Act is amended by repealing section

• 24A.
• 8.Section 31 of the principal Act is amended in
• subsection (l) by inserting the following new paragraph immediately after paragraph (c)-
• (d) prohibitions relating to abuse of superior
• bargaining position.

9. The principal Act is amended by inserting the following new Part immediately after section 40-

PART IIA-UNFAIR MARKET

CONDUCT

• 40A.(l) A person shall not engage in any conduct that amounts to abuse of buyer power in a market in Kenya, or a substantial part of Kenya.

Amendmentof section 18of Cap. 504.

Amendment of section23ofCap. 504.

Repeal of section

24A of Cap.504.

Amendment of section31 of Cap. 504.

Insertionofanew Part in Cap.504.

• (2) Without prejudice to the generality of

2. subsection (1), conduct amounting to abuse ofbuyer power includes- 3. (a)delays in paymentof suppliers without justifiable reason in breach 4. of agreed terms of payment; 5. (b unilateral termination or threats of termination of a commercial relationship without notice or on an unreasonably short notice,and without an objectively justifiable reason; 6. C refusal to receive or return any goods or part thereof without justifiable reason in breach of agreed contractual terms; 7. (d) transfer of costs or risks to suppliers of goods or services by imposing a requirement for the suppliers to fund the cost ofpromotion of the goods or 8. services; 9. transfer of commercial risks meant to be borne by the buyer to suppliers; 10. f demandsfor preferential terms unfavourable to the suppliers or demanding limitations on supplies to 11. g reducing prices by a small but significant amount where there is difficulty in substitutability of alternative buyers or reducing prices below competitive levels;or 12. other buyers; 13. (h) bidding up prices of inputs by a buyer undertaking with the aim of excluding competitors from the market.

• (3) The Authority may require industries and sectors in which instances of abuse of buyer power are likely to occur, to develop a binding code of practice to regulate the terms and conduct between buyers and

15. suppliers.

Abuse of superior bargaining position.

• (4) The Authority shall publish the code of practice developed under subsection (3), which shall be developed after consultation with the relevant stakeholders and relevant government agencies.
• (5) When investigating abuse of buyer power complaints, the Authority shall be guided by any existing agreement,whether written or not,between a buyer undertaking
• (6) In determining a complaint relating to abuse of buyer power,the Authority shall all relevant circumstances,
• and supplier undertaking.
• consider including-
• (a) thenature anddeterminationof contract terms between the concerned undertakings;
• (b) the payment requested for access to
• (C)
• (d) variation reasonable notice;and
• infrastructure;
• the price paid to suppliers;
• e)
• (7)A person who contravenes the offence and shall be liable,on conviction,to imprisonment for a term not exceeding five
• the conditions for termination and ofthecontractwith
• the mechanism for the resolution of disputes in respect of the contract.
• provisions of subsection (l) commits an years or to a fine not exceeding ten million shillings, or to both.
• (2) Without prejudice to the generality of subsection (1),conduct amounting to abuse of superior bargaining position includes imposing trading conditions that are more
• 40B. (1) A person shall not engage in any conduct that amounts to abuse of superior bargaining position in a market in Kenya,or a substantial part of Kenya.

unfavourable than would be expected in lightof normal business

practices including-

• (a) delays in the payment of suppliers without justifiable reason in breach of agreed terms of payment;
• (b) unilateral termination or threats of termination of commercial relationship without notice or on an unreasonably short notice and without a justifiable reason;
• C failing to provide the counterparty with terms,conditions or other rules associated with the transaction or service prior to the transaction or provision of the service;
• (d) unilateral variation of contractual terms,conditions,orother rules associated with the transaction or service without prior notice to the counterparties;
• e)
• transfer of costs to a counterparty;
• transfer of commercialrisks meant to bebornebyapartytothe counterparty;
• (g) demandsfor preferential terms unfavourable to the counterparty;
• imposing purchase pricesbelow competitive levels or service fees
• (h) above competitive levels;
• unreasonable collection or processing
• of data of the counterparty;
• imposing unduly difficult conditions
• for the termination of service;and
• (k) obstruction of businessactivities or interference in the management of the business of a counterparty.

• (3) Where the Authority determines that a sector or an undertaking is experiencing or is likely to experience incidences of abuse of superior bargaining position, the Authority may-

2. (a) monitor the activities of the sector or undertaking; 3. (b) impose reporting prudential requirements and regulations to ensure compliance;and 4. C in consultation with the relevant stakeholders,develop and publish a code of practice to regulate the terms

• (4) In determining any complaint on the abuse of superior bargaining position, the Authority shall consider allrelevant

6. and conduct between counterparties. 7. circumstances,including- 8. (a) the degree of dependence by the affected undertaking or undertakings on transactions with the party under investigation; 9. (b) the position of the undertaking in the 10. market;

• C) thepossibilityofthe affected undertaking to change its business counterpart;and
• d) whether the party under investigation is an unavoidable trading partner or a critical business partner in the relevant market.
• (5) When investigating a complaint on the abuse of superior bargaining position, the Authority shall consider, among other factors, any existing agreement, whether

14. (6)Aperson who contravenes the provisions of subsection (1) shall be liable, 15. written or not,between the counterparties. 16. on conviction,to imprisonment ofa term not

Investigation into complaints on the abuse ofsuperior exceeding five years or a fine not exceeding ten million shillings, or to both.

• 40C.(1) The Authority may,on its own initiative or upon receipt of information or a complaint from any person, government agency,Ministry,or consumer body,initiate investigations into the abuse of superior bargaining position.

bargaining position.

• (2) The provisions of sections 31,32,33, 34,35,36,37,38,39and40oftheAct shall apply mutatis mutandis to the investigation of complaints under thisPart.

2. 10.Section 41 of the principal Act is amended in subsection (2) by inserting the following new paragraph immediately after paragraph (h) 3. (i) privatization of Government agencies and state corporations that engage in trade as defined under section5(5) of this Act. 11. Section 55 of the principal Act is amended- 5. (a) in paragraph (a),by inserting the following new subparagraph immediately after subparagraph (vi)(vii) goods or services are in such other manner other than the manner specified; 6. (b)in paragraph (b), by inserting the following new 7. subparagraph immediately after subparagraph (v) 8. (vi) concerning any other relevant information in connection with the supply or promotion of goods or 9. services to the consumer; 10. (C) by inserting the following new paragraph immediately 11. after paragraph (b)— 12. (c)withholds material information on the quality and use of a good or service. 12. Section 70A of the principal Act is amended 14. (a) in the marginal note,by deleting the word"complaints" and substituting therefor the words"consumer welfare 15. matters" 16. (b) in subsection (l),by deleting the words "consumer complaintappearing at the end of the sentence and

Amendment of section 41 of Cap 504.

Amendment of

section 55 cf Cap 504.

Amendment of section70Aof 504.

substituting therefore the words "consumer welfare matter";

• (C) in subsection (2),by deleting the word "complaints" and substituting therefor the words"consumer welfare matters"
• 13.Section 89 of the principal Act is amended by inserting the words"and shall be liable on conviction to a fine of up to ten percent of the undertaking's gross annual turnover of the preceding year"immediately after the word "offence"
• following new section immediately after section 91-
• 91A. (l) Without prejudice to any other provision of this Act,the Authority may take such administrative enforcement action,against any person,for the breach of any provisions of this Act, the regulations, rules,guidelines,notices or directions made hereunder.
• (2)The enforcement action under

Administrative enforcement action.

• subsection (1) may include
• (a) issuing a written warning to the undertaking for the cessation of the non-compliance and require the specific action to remedy or reverse the infringement or the effects thereof;
• (b) issuinga direction tothe undertaking takeremedial action orto make specific arrangements to remedy the noncompliance within such timeframe as may be specified;
• in question;
• (C) imposing an administrative penalty of up to ten percent of the immediately preceding year's gross annual turnover in Kenya of the undertaking or undertakings
• d) suspending,revoking or varying any right,benefit or privilege
• granted under this Act;

Amendment of Section89of504.

Insertion of a new section in Cap. 504.

MEMORANDUM OFOBJECTSAND REASONS

(Cap. 504) to broaden the mandate of the Competition Authority in addressing anti-competitive conduct in digital markets and unfair market conduct arising from the abuse of superior bargaining position.

The principal object of this bill is to amend the Competition Act

Clause 1 of the Bill provides the short title of the Act.

Clause 2 of the Bill proposes the amendment of section 2 of the Competition Act to include new definitions of terms used in technical sense but not defined.

Clause 3 of the Bill proposes the amendment of section 4 of the Act to include parameters for assessing dominant position in the case of digital activities. Additionally, it includes a proposed interpretation of the expression strategic market position and superior bargaining position in a market.

Clause 4 of the Bill seeks to amend section 9 of the Act to provide additional functions of the Authority including fostering strategic partnerships with national,regional and international bodies.

Clause 5 of the Bill seeks to amend section 18of the Act to empower the Authority to conduct inquiries into any matter affecting abuse of superior bargaining position.

Clause 6 of the Bill proposes the amendment of section 23 of the Act toprovide for the regulation of intermediaries that are considered to be in a dominant position.

Clause 7 of the Bill proposes the repeal section 24A on abuse of buyer power due to improper logical placement in the Act. The abuse of buyer power is not a restrictive trade practice and as such the current position under Part IlI on Restrictive Trade Practices is considered an anomaly.Accordingly,the provision is reintroduced under clause 9 of the Bill which seeks to introduce a new Part in the Act on unfair market conduct; and particularly, the introduction of sections on the abuse of buyer power and abuse of superior bargaining aforementioned conduct deals with where a party with greater influence position.The over the outcome of negotiations uses that advantage to bring about excessive imbalances in the rights and obligations in the business engagement to the detriment of the other party.

Clause 8 of the Bill seeks to amend section 31 of the Act to empower the Authority to investigate any conduct constituting an abuse of superior bargaining position Clause 10 of the Bill seeks to amend section 41 of the Act to broaden the definition of a merger to include privatization of Government agencies and state corporations that engage in trade.

include offences on providing false or misleading representations on goods or services by:

Clause 11 of the Bill proposes to amend section 55 of the Act to

• a) falsely representing that good or services are in such other manner other than the manner specified;

2. (b) making false or misleading representation concerning any other relevant information in connection with the supply or promotion 3. of goods or services to the consumer;or 4. withholding material information on the quality and use of a 5. C product.

Clause 12 of the Bill proposes to amend section 70A of the Act to

Clause 13 of the Bill seeks to amend section 89 of the Act to enhance clarity by providing for the penalty for penalty for failure to comply with a lawful order of theAuthority.

replace the word complaints with consumer welfare issues in line with International Best Practices in theregulation of competition in Kenya.

Clause 14 of the Bill seeks to insert a new provision in the Act empowering the Authority to enforce administrative sanctions against any person who violates theprovisions of the Act.

Statement on the delegation of legislative powers and limitation of

fundamental rights and freedoms

The Bill does not delegate legislative powers and it does not limit fundamental rights and freedoms.

Statement that the Bill concerns county governments

pursuant to the Fourth Schedule to the Constitution.

The Bill does not affect the functions of the county governments

Statement that the Bill is not a money Bill within the meaning of Article 114 of the Constitution

The enactment of this Bill shall not occasion additional expenditure of public funds.

Dated the 30th January,2026.

Section 2 of the Competition Act which it is proposed to amend

2.Interpretation

In this Act,unless the context otherwise requires-

"agreement"when used in relation to a restricted practice, includes a contract,arrangement or understanding,whether legally enforceable or

not;

intangible,intellectual property,goodwill,chose in action,right,licenc, cause of action or claim and any other asset having a commercial value;

"asset" includes any real or personal property,whether tangible or

"Authority"means the Competition Authority established by section

7;

"buyer power"means the influence exerted by an undertaking or

group of

undertakings in the position of purchaser of a product or service to-

• (a) obtain from a supplier more favourable terms;or
• (b) impose a long term opportunity cost including harm or withheld benefit,which,ifcarried out,would besignificantly disproportionate to any resulting long term costto the undertaking or group of undertakings.

"Cabinet Secretary"means the Cabinet Secretary for the time being responsible for finance;

"competition"and "competitor"have therespective meanings assigned in section 4;

"concerted practice"means co-operative or co-ordinated conduct between firms,achieved through direct or indirect contact,that replaces their independent action,but which does not amount to an agreement;

"consumer includes any person who purchases or offers to purchase

goods or services otherwise than for the purpose of resale,but does not include a person who purchases any goods or services for the purpose of using them in the production or manufacture of any goods or articles for sale;

"consumer body"includes residents' associations and registered consumer groups by whatever name called;

"County government" means the county government established by

Article 76(1)of the Constitution;

""customer" includes any person who purchases or offers to purchase goods or services;

"Director-General"means the Director-General appointed under section 12;

"dominant position in a market"has the meaning assigned in section 4 and "dominance" shall be construed accordingly;

"enterprise"means an undertaking;

"goods"includes-

• (a) ships, aircraft and vehicles;
• (b) animals,including fish;
• ()minerals, trees and crops,whether on,under,or attached to land
• ornot;and
• (d) gas, water and electricity;

"licence"means a licence,permit or authority that allows the licensee to supply or acquire goods or services or to carry on any other activity;

"intermediate goods" means goods used as inputs in manufacturing;

"local authority" deleted by Act No. 49 of 2016, s. 2;

"manufacture" includes any artificial process which transforms goods in order to add value to them for the purpose of resale and any operation ofpacking or repacking not linked to a form of transportation within a single enterprise;

"market"has the meaning provided for in section 4;

"market power" means the power of a firm to control prices, to exclude competition or to behave to an appreciable extent,independently ofits competitors,customers or suppliers;

"member",in connection with the Authority,means the Chairperson and any other member of the Authority;

"merger" means an acquisition of shares, business or other assets, whether inside or outside Kenya,resulting in the change of control of a

business, part of a business or an asset of a business in Kenya in any manner and includes a takeover;

"person"includes a body corporate;

drive competitors out of business or to deter market entry;

"recognized consumer body" means a consumer body recognized by the Authority for the purposes of this Act;

"sale" includes an agreement to sell or offer for sale, and an "offer for

sale" shall be deemed to include the exposing of goods for sale, the furnishing ofa quotation,whether verbally orin writing,and any other act or notification whatsoever by which willingness to enter into any transaction for sale is expressed;

"service" includes any rights (including interests in, and rights in relation to,real orpersonal property),benefits,privileges orfacilities and, without limiting the generality of the foregoing, includes the rights, benefits,privileges or facilities provided, granted or conferred under any contract for orin relation to-

• (a) the performance of work,including work of a professional nature,
• whether with or without the supply of goods;
• (b) the provision of, or the use or enjoyment of facilities for, amusement, entertainment,transport, broadcasting, tourism, recreation,education or instruction;
• (c) insurance;
• (d) banking;
• (e) the lending of money;
• (f) consultancy;
• (g)private professional practice,and any right,benefit or privilege
• for which remuneration is payable in the form of a royalty, tribute,levy or similar charge,but does not include the performance ofwork or the supply of goods under a contract of employment;

"state corporation" has the meaning assigned to it in the State Corporations Act (Cap.446);

"supply"-

• (a) in relation to goods, includes supply or re-supply by way of sale,
• exchange,lease,hire or hire purchase;and
• (b) in relation to services, includes provide, grant or confer, and
• "supplier" shall be construed accordingly;

"substantial part of Kenya"means a part of Kenya which constitutes

a district,a town council,a municipal council or a city council;

"trade'includes commerce;

"trade association" means a body or person (whether incorporated or not) which is formed for the purposes of furthering the interests of its members or persons represented by its members;

"Tribunal" means the Competition Tribunal established by section 71;

"undertaking" means any business intended to be carried on, or carried on for gain or reward by a person, a partnership or a trust in the production,supply or distribution of goods or provision of any service, and includes a trade association;and

"unwarranted concentration of economic power"means the existence

of cross directorship between two distinct undertakings or companies producing substantially similar goods or services and whose combined market share is more than forty per cent.

Section 4 of the Competition Act which it is proposed to amend-

4.Interpretation of expressions

• (1) The following expressions referred to in the Act shall be

2. interpreted in accordance with this section- 3. (a)"competition"means competition in a market in Kenya and refers to theprocesswhereby two ormorepersons- 4. i supply or attempt to supply to; or 5. (ii) acquire or attempt to acquire from, the people in that 6. market the same or substitutable goods or services; 7. (b) a person is a "competitor" of another person if they are in competition with each other or would,but for an agreement to which the two persons are parties, be likely to be in competition with each other; 8. (c)"market"means a market in Kenya or a substantial part of Kenya 9. and refers to the range of reasonable possibilities for substitution in supply or demand between particular kinds of goods or services and between suppliers or acquirers,or potential suppliers or acquirers,of those goods or services.

• (2) In assessing effects on competition or determining whether a

11. person has a dominant position in a market, the following matters, in addition to other relevant matters,shall be taken into account 12. (a) the importation of goods or the supply of services by persons not 13. resident or carrying on business in Kenya;and

• (b) the economic circumstances of the relevant market including the market shares of persons supplying or acquiring goods or services in the market, the ability of those persons to expand their market shares and the potential for new entry into the market.
• (3)A person has a dominant position in a market if the person
• (a) produces, supplies, distributes or otherwise controls not less than one-half of the total goods of any description that areproduced
• supplied or distributed in Kenya or any substantial part thereof;or
• (b) provides or otherwise controls not less than one-half of the services that are rendered in Kenya or any substantial part
• thereof.

Section 9 of the Competition Act which it is proposed to amend-

• 9.Functions of the Authority
• (1) The functions of the Authority shall be to-
• (a) promote and enforce compliance with the Act;
• (b) receive and investigate complaints from legal or natural persons and consumer bodies;
• (c)promote public knowledge,awareness and understanding of the obligations,rights and remedies under the Act and the duties, functions and activities of the Authority;
• (d)promote the creation of consumer bodies and the establishment of good and proper standards and rules to be followed by such
• bodies in protecting competition and consumer welfare;
• (e) recognize consumer bodies duly registered under the appropriate national laws as the proper bodies,in their areas of operation,to
• represent consumers before the Authority;
• (f)make available to consumers information and guidelines relating to the obligations of persons under the Act and the rights and
• remedies available to consumers under the Act;
• (g) carry out inquiries, studies and research into matters relating to
• competition and theprotection of the interests of consumers;
• (h) studygovernment policies,procedures and programmes, legislation and proposals for legislation so as to assess their effects on competition and consumer welfare and publicise the
• results of such studies;

• (i) investigate impediments to competition,including entry into and exit from markets,in the economy as a whole or in particular sectors and publicise the results of such investigations;
• D investigate policies,procedures and programmes of regulatory authorities so as to assess their effects on competition and consumer welfare and publicise the results of such studies;
• (k)participate in deliberations and proceedings of government, government commissions,regulatory authorities and other bodies in relation to competition and consumerwelfare;
• 11 make representations to government,government commissions, regulatory authorities and other bodies on matters relating to competition and consumer welfare;
• (m)liaise with regulatory bodies and other public bodies in all matters relating to competition and consumer welfare;
• (n) advise the government on matters relating to competition and consumer welfare.

Section 18 of the Competition Act which it is proposed to amend-

18.Power tohold inquiries

• (1) The Authority may conduct an inquiry or a sectoral study where-
• (a) it considers it necessary or desirable for the purpose of carrying out its functions;
• (b) upon a direction by the Cabinet Secretary in writing to the Authority,requiring it to conduct an inquiry or a sectoral study into a matter specified in the direction.
• (2) A direction by the Cabinet Secretary under subsection (1)(b) shall specify a period within which the Authority shall submit itsreport to the Cabinet Secretary.
• (3) In appropriate cases,after conclusion of an inquiry or a sectoral study,the Authority shall in its report to the Cabinet Secretary identify sectors where factors relating to unwarranted concentrations of economic power subsist and give advice regarding measures which may ameliorate such situations.
• (4) At the request of a regulatory body,or at its own instance, the Authority may conduct an inquiry into any matter affecting competition

abuse of buyerpower or consumer welfare and provide a report within a reasonableperiod.

• (5) The Authority shall give notice of an intended inquiry or sectoral

2. studyby- 3. (a) publishing a notice in the Gazette and in at least one daily newspaper of national circulation specifying- 4. (i 5. the subject matter of the intended inquiry; 6. (ii) inviting submissions on the subject from members of the public within a specified period;and 7. (ii) in the case of an inquiry conducted at the direction of the Cabinet Secretary, the terms of reference issued by the Cabinet 8. Secretary; 9. (b) sending written notice of the inquiry,including the information in paragraph (a) to- 10. (i) undertakings whose interests the Authority considers likely to be affected by the outcome of the inquiry; 11. (i) industry and consumer organizations which the Authority considers may have an interest in the matter; 12. (ii) the Cabinet Secretary. 13. (6) Every person,undertaking, trade association or body shall be under an obligation to provide information requested by the Authority in fulfilment of its statutory mandate for conducting an inquiry or sectoral study regulated by this section.

Section 23 of the Competition Act which it is proposed to amend-

• 23.Criteriafor determining dominant position
• (1) For purposes of this section,"dominant undertaking"means an undertaking which-
• (a) produces,supplies, distributes or otherwise controls not less than one-half of the total goodsof any description which areproduced,
• supplied or distributed in Kenya or any substantial part thereof; or
• (b) provides or otherwise controls not less than one-half of the
• services which are rendered in Kenya or any substantial part thereof.
• (2) Notwithstanding subsection (l),an undertaking shall also be
• deemed to be dominant for the purposes of this Act where the undertaking-

• (a) though not dominant, controls at least forty per cent but not more than fifty per cent of the market share unless it can show that it does not have market power;or
• (b) controls less than forty per cent of the market share but has
• marketpower.

Section 24A of the Competition Act which it is proposed to amend-

24A.Abuseofbuyerpower

• (1) Any conduct that amounts to abuse of buyer power in a market in Kenya,or a substantial part of Kenya,is prohibited.
• (2) Where the Authority establishes that a sector or an undertaking is experiencing or is likely to experience incidences of abuse of buyer power, it may monitor the activities of the sector or undertaking and ensure compliance by imposingreporting and prudential requirements.
• (3) The Authority may require industries and sectors, in which instances of abuse of buyer power are likely to occur,to develop a binding code of practice.

4. (4) In determining any complaint in relation to abuse of buyer power, the Authority shall take into account all relevant circumstances, including- 5. (a) the nature and determination of contract terms between the 6. concerned undertakings; 7. (b) the payment requested for access to infrastructure; and 8. (c) the price paid to suppliers.

(5) Conduct amounting to abuse of buyer power includes-

• (a) delays in payment of suppliers without justifiable reason in
• breach of agreed terms of payment;
• (b)unilateral termination or threats of termination of a commercial relationship without notice or on an unreasonably short notice period,and without an objectively justifiablereason;
• (c) refusal to receive or return any goods or part thereof without
• justifiable reason in breach of the agreed contractual terms;
• (d) transfer of costs or risks to suppliers of goods or services by imposing a requirement for the suppliers to fund the cost of a promotion of the goods or services;
• (e) transfer of commercial risksmeant to be borne by the buyer to the
• suppliers;

• ()
• demands for preferential terms unfavourable to the suppliers or demanding limitations on supplies to other buyers;
• (g)reducing prices by a small but significant amount where there is difficulty in substitutability of alternative buyers or reducing
• prices below competitive levels;or
• (h) bidding up prices of inputs by a buyer undertaking with the aim
• ofexcluding competitors from the market.
• (6) When investigating abuse of buyer power complaints,the Authority shall be guided by any existing agreement, whether written or not, between a buyer undertaking and supplier undertaking.
• (7) An agreement between a buyer undertaking and a supplier undertaking shall include-
• (a) the terms of payment;
• (b) the payment date;
• (c) the interest rate payable on late payment;
• (d) the conditions for termination and variation of the contract with reasonable notice;and
• (e) the mechanism for the resolution of disputes.
• (8) The Authority shall publish the code of practice which shall be developed inconsultation with the relevant stakeholders, relevant Government agencies and the Attorney-General.
• (9) Any person who contravenes the provisions of subsection (1) commits an offence and shall be liable on conviction to imprisonment for a term not exceeding five years or to a fine not exceeding ten million shillings or to both.

Section 31 of the Competition Act which it is proposed to amend-

• 31.Investigation by Authority
• (1) The Authority may, on its own initiative or upon receipt of information or complaint from any person or Government agency or Ministry,carry out an investigation into any conduct or proposed conduct which is alleged to constitute or may constitute an infringement of
• (a) prohibitions relating to restrictive trade practices;
• (b) prohibitions relating to abuse of dominance; or
• (c) prohibitions relating to abuse of buyer power.

• (2) If the Authority,having received from any person a complaint or a request to investigate an alleged infringement referred to in subsection (1), decidesnot to conduct an investigation,the Authority shall inform that person in writing of the reasons for its decision.
• (3) Deleted byL.N.23/2011,Sch.

3. (4) If the Authority decides to conduct an investigation, the Authority may,by notice in writing served on any person in the prescribed manner, require thatperson- 4. (a) to furnish to the Authority by writing signed by that person or,in the case of a body corporate,by a director or member or other competent officer, employee or agent of the body corporate, within the time and in the manner specified in the notice, any information pertaining to any matter specified in the notice which the Authority considers relevant to the investigation; 5. (b) to produce to the Authority,or to a person specified in the notice to act on the Authority behalf,any document or article,specified in the notice which relates to any matter which the Authority considers relevant to the investigation; 6. (c) to appear before the Authority at a time and place specified in the notice to give evidence or to produce any document or article specified in the notice;and 7. (d) if he possesses any records considered relevant to the investigation,to give copies of those records to the Authority or alternatively to submit the record to the authority for copying within the time and in the manner specified in the notice.

Section 4l of the Competition Act which it is proposed to amend-

41.Merger defined

• (1) For the purposes of this Part, a merger occurs when one or more undertakings directly or indirectly acquire or establish direct or indirect control over the whole orpart of the business of another undertaking.
• (2) A merger contemplated in subsection (1) may be achieved in any manner,including-

3. (a) the purchase or lease of shares, acquisition of an interest, or purchase of assets of the other undertaking in question; 4. (b) the acquisition of a controlling interest in a section of the business of an undertaking capable of itself being operated independently whether or not the business in question is carried on by a company;

• (c) the acquisition of an undertaking under receivership by another undertaking either situated inside or outside Kenya;
• (d) acquiring by whatever means the controlling interest in a foreign undertaking that has got a controlling interest in a subsidiary in Kenya;
• (e) in the case of a conglomerate undertaking,acquiring the controlling interest of another undertaking or a section of the undertakingbeing acquired capable of beingoperated independently;
• )vertical integration;
• (g) exchange of shares between or among undertakings which result in substantial change in ownership structure through whatever strategy or means adopted by the concerned undertakings; or
• undertaking.
• (h) amalgamation,takeover or any other combination with the other
• (3) A person controls an undertaking if that person-
• (a) beneficially owns more than one half of the issued share capital or business or assets of the undertaking;
• (b) is entitled to vote a majority of the votes that may be cast at a general meeting of the undertaking,or has the ability to control the voting ofa majority of thosevotes,either directly or through a
• controlled entity of that undertaking;
• directors of the undertaking;
• (d) is a holding company,and the undertaking is a subsidiary of that
• (e) in the case of the undertaking being a trust, has the ability to
• company as contemplated in the Companies Act (Cap. 486);
• control the majority of the votes of the trustees or to appoint the majority of the trustees or to appoint or change the majority of the beneficiaries of the trust;
• (f) in the case of the undertaking being a nominee undertaking,owns the majority of the members'interest or controls directly or has the right to control the majority of members'votes in the nominee undertaking;or
• (g) has the ability to materially influence the policy of the undertaking in a manner comparable to a person who,in ordinary

commercial practice,can exercise an element of control referred to in paragraphs (a) to (f).

Section 55 of the Competition Act which it is proposed to amend55.False ormisleading representations

A person commits an offence when, in trade in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services,he

(a) falsely represents that--

• goods are of a particular standard,quality,value, grade, composition, style or model or have had a particular history
• or particular previous use;
• ii
• services are of a particular standard,quality,value or grade;
• (i) goods are new;
• (iv) a particular person has agreed to acquire goods or services;
• (iv) goods or services have sponsorship,approval, performance characteristics, accessories, uses or benefits they do not have;
• (vi) the product has a sponsorship,approval or affiliation it does
• not have;
• (b) makes a false or misleading representation-
• with respect to the price of goods or services;
• (ii) concerning the availability of facilities for the repair of goods or of spare parts for goods;
• (iii) concerning the place of origin of goods;
• iv
• concerning the need for any goods or services;or
• (V)
• concerning the existence, exclusion or effect of any condition,warranty,guarantee,right or remedy.

Section 7OA of the Competition Act which it is proposed to amend-

70A.Authority to initiate investigation into complaint

• (1) Pursuant to the provisions this Part,the Authority may on its own initiative or upon receipt of information or a complaint from any person, government agency,Ministry,or consumer body,initiate investigations

2. into a consumer complaint.

• (2)Theprovisionsofsections31,32,33,34,35,36,37,38,39and 40 of the Act shall apply mutatis mutandis to the investigation of consumer complaints under this section.

Section 89A of the Competition Act which it is proposed to amend-

89.Failure to comply with order

Any person who contravenes or fails to comply with a lawful order of the Authority given in terms of this Act commits an offence.

Section 91 of the Competition Act which it is proposed to amend-

91.General penalty

A person convicted of an offence under this Act, for which no penalty has been specified under this Act shall be liable to a fine not exceeding five hundred thousand shillings,or to imprisonment for a term not exceeding three years,or both.