The Competition (Amendment) Bill, 2026

Background

This Bill, the Competition (Amendment) Bill, 2026, aims to update the Competition Act (Cap. 504) to better address evolving market dynamics, particularly in digital sectors, and to combat unfair market conduct arising from imbalances in bargaining power. The principal object is to broaden the mandate of the Competition Authority (CA) in addressing anti-competitive conduct in digital markets and unfair market conduct arising from the abuse of superior bargaining position.

Key Amendments

• Definitions (Section 2 of principal Act): New definitions are introduced, including:
  • "business consumer": a business or economic entity purchasing goods/services otherwise than for resale or conversion as an input.
  • "counterparty": the other party in a transaction/agreement.
  • "digital activity": provision of service through the internet or digital content, including online intermediation services (marketplaces, application stores), online search engines, online social networking services, video-sharing platform services, independent interpersonal communication services, operating systems, cloud computing services, and online advertising services.
  • "digital market": a market where goods/services are primarily exchanged through digital platforms.
  • "strategic market position": a position where a person influences market prices, quality, service, output, or innovation to an appreciable extent independent of competitors, suppliers, users, or consumers.
  • "superior bargaining position": a position where a person creates an imbalance in rights/obligations, and the counterparty cannot find a viable and satisfactory alternative.
• Strategic Market Position in Digital Markets (Section 4 of principal Act): New subsections provide parameters for assessing a strategic market position, especially in digital markets. Factors include network effects, economies of scale and scope, access to data, user switching costs, and the importance of intermediary services provided.
• Expanded Authority Functions (Section 9(1) of principal Act): The functions of the Competition Authority are expanded to include advising the Cabinet Secretary and stakeholders on competition and consumer welfare, and fostering strategic partnerships with national, regional, and international bodies on these matters.
• Criteria for Dominant Position (Section 23 of principal Act): For digital markets, an undertaking may be deemed dominant even if it controls less than forty percent of the market share, provided it possesses market power, including a significant market position.
• Merger Definition Broadened (Section 41(2) of principal Act): The definition of a merger now explicitly includes the privatization of Government agencies and state corporations that engage in trade.
• Consumer Welfare Matters (Section 70A of principal Act): Amendments replace references to "complaints" with "consumer welfare matters," aligning the Act with international best practices in competition regulation.

New Obligations

• Prohibition of Abuse of Buyer Power (Section 40A): A person shall not engage in conduct amounting to abuse of buyer power. Examples include:
  • Delays in payments to suppliers without justifiable reason.
  • Unilateral termination of commercial relationships without proper notice or justifiable reason.
  • Refusal to receive or return goods without justifiable reason.
  • Transfer of costs or risks to suppliers.
  • Demands for preferential terms unfavorable to suppliers.
  • Reducing prices to below competitive levels where there is difficulty in finding alternative buyers.
  • Bidding up input prices to exclude competitors.
• Prohibition of Abuse of Superior Bargaining Position (Section 40B): A person shall not engage in conduct amounting to abuse of superior bargaining position. Examples include:
  • Delays in payments to suppliers without justifiable reason.
  • Unilateral termination or threats of termination without proper notice or justifiable reason.
  • Failure to provide counterparty with terms/conditions prior to transaction.
  • Unilateral variation of contractual terms without prior notice.
  • Transfer of costs or commercial risks to a counterparty.
  • Demands for preferential terms unfavorable to the counterparty.
  • Imposing purchase prices below competitive levels or service fees above competitive levels.
  • Unreasonable collection or processing of counterparty data.
  • Imposing unduly difficult conditions for termination of service.
  • Obstruction of business activities or interference in management.
• Codes of Practice: The Competition Authority may require industries and sectors where abuse of buyer power or superior bargaining position is likely to occur to develop binding codes of practice to regulate terms and conduct between buyers and suppliers, and between counterparties.
• Expanded False/Misleading Representation Offences (Section 55 of principal Act): Offences now include:
  • Falsely representing that goods or services are in a specified manner.
  • Making false or misleading representations concerning any other relevant information in connection with the supply or promotion of goods or services to the consumer.
  • Withholding material information on the quality and use of a good or service.

Penalties

• Abuse of Buyer Power (Section 40A(7)): A person who contravenes the provisions on abuse of buyer power commits an offence and is liable, on conviction, to imprisonment for a term not exceeding five years or to a fine not exceeding KSh 10 million, or both.
• Abuse of Superior Bargaining Position (Section 40B(6)): A person who contravenes the provisions on abuse of superior bargaining position is liable, on conviction, to imprisonment for a term not exceeding five years or to a fine not exceeding KSh 10 million, or both.
• Failure to Comply with Authority Order (Section 89): Failure to comply with a lawful order of the Authority now incurs a fine of up to ten percent of the undertaking's gross annual turnover of the preceding year.
• Administrative Enforcement Action (Section 91A): The Authority may impose administrative penalties for breaches of the Act or its regulations, including a penalty of up to ten percent of the immediately preceding year's gross annual turnover. These penalties may be recovered as civil debt.
• General Penalty (Section 91): For offences under the Act for which no specific penalty has been specified, the general penalty remains a fine not exceeding five hundred thousand shillings, or imprisonment for a term not exceeding three years, or both.