CAK eyes forensic lab, stricter laws to enhance consumer protection

Competition Authority of Kenya Acting Director-General Dr.Adano Roba when he appeared before the Committee on Trade, Industry and Cooperatives at Continental House in Nairobi on September 04, 2024. [Boniface Okendo, Standard]

The Competition Authority of Kenya (CAK) is looking into ways to increase consumer protection oversight among firms operating in the digital sphere.

The consumer protection watchdog notes that cartels have changed their modus operandi and are now using big data and artificial intelligence. 

CAK, which doubles up as the competition regulator, said its new Strategic Plan, launched yesterday, would steer it in the fight against Big Data and AI-powered abuses.

Additionally, it said it is pushing for the review of the Competition Act to give it more teeth to bite rogue players using new technologies to abuse both consumer rights as well as exploit small suppliers.

It has also invested in a new forensic laboratory that it said would enhance its investigations. 

“The world of competition enforcement is dynamic. Today, markets are being distorted by cartels using big data and AI. Cartels are covert by nature, and cases take up to three years from fact-finding to closure. The rise of digital technologies makes detection more complex. This calls for equipping our officers with the right tools and skills to keep pace with the changing dynamics,” said CAJ Chairman Shaka Kariuki.

“We have recently invested Sh45 million in setting up a forensic lab to aid complex evidence analysis during investigations. Our case officers have been trained to deploy these tools, cutting our dependence on third-party suppliers.”

The Authority said its 2023/24–2027/28 strategic plan would emphasise transparency, predictability, stakeholder engagement and innovation, which CAK said are “crucial in delivering our mandate effectively and efficiently.”

This will be the fourth strategic plan since the establishment of CAK in 2010.

CAK has in the past penalised players it has found to be engaging in what it termed as cartel-like behaviour. Over the just-concluded strategic plan period, the Authority collected fines of Sh177.5 million.

It, however, fined different players nearly Sh1.5 billion for engaging in anti-competitive practices, but has yet to collect, as some of the companies appealed its determinations at the Competition Tribunal. 

A huge chunk of these fines was in the year to June 2024 and includes a Sh1.1 billion fine on retail chain Carrefour for alleged abuse of buyer power.

During the year, CAK also fined nine steel manufacturers a combined Sh339 million for what it said was "cartel conduct.”

The retailer and the steel firms separately appealed against CAK’s findings, and the cases were yet to be determined by the close of the year.

Mr Kariuki said there are numerous instances of abuse of consumer and supplier rights, but added that CAK does not penalise players for the “sake of it” but rather as an attempt to strike a balance between the provision of a safe market for consumers and an environment for businesses to invest and compete on merit.

“Kenya’s markets continue to suffer from anti-competitive behaviour… CAK will not tolerate profiteering by breaking the Competition Act,” he said. “We urge businesses to self-audit their practices and align with the law… our enforcement arm is ready for decisive deployment where necessary.”

CAK Director General David Kemei said the Authority is alive to emerging trends, noting that while developing previous strategic plans, digital trade was not as strong as it is today, and this necessitated capturing digital trends strongly in the new strategic plan.

To also respond to needs of consumers engaging traders online including through e-commerce, Kemei said it has been necessary to review the Competition Act.

“We evaluated emerging global trends, benchmarked internationally and regionally, and aligned the Plan with key national priorities such as the Fourth Medium-Term Plan and the Bottom-up Economic Transformation Agenda,” said Mr Kemei.

“Our direction responds to the evolving needs of our stakeholders. It promotes transparency, predictability, engagement, and innovation. Anchored in the theme “Promoting and Sustaining Enforcement for Enhanced Consumer Welfare.”

Treasury Principal Secretary Chris Kiptoo noted the major milestones that CAK has made over the years, including the regulation of unfair practices by power buyers on small businesses. Such include the review of the Competition Act in 2019, which, he observed, had been prompted by the collapse of Nakumatt and Uchumi supermarkets, whose downfall led to losses of over Sh40 billion for suppliers, many of whom were small businesses.

“Among some of the achievements are the strides made in deterring the abuse of buyer power. The 2019 amendments to the Competition Act empower the CAK to protect small suppliers from exploitation, a necessary intervention following the collapse of Nakumatt and Uchumi, which left over Sh40 billion in unpaid debts to SMEs. Addressing these imbalances has brought hope to the marketplace,” said Mr Kiptoo.

“The Strategic Plan we unveil today is not just a roadmap—it is a bold statement of intent, a commitment to purposeful action and tangible outcomes that will deliver efficient markets and inclusive economic development for the people of Kenya.”