| Clause 2 | 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- | The alignment of this definition allows for consistency between the definition of the word person in the Act and the Constitution, and for greater coherence between the two sources of law. |
| (a)"person” has the meaning assigned to it under Article 260 of the Constitution; |
| Clause 2 | (b) in the definition of "undertaking", by inserting the words "or a natural person" immediately after the words "trade association"; | This definition makes it clear that individuals acting in a commercial capacity fall within the scope of competition regulation. |
| Clause 2 | (c) inserting the following new definitions in their proper alphabetical sequence | This definition expands the scope of a consumer to include businesses. |
| "business consumer" includes a business or economic entity that purchases or offers to purchase goods or services otherwise than for the purpose of resale or conversion as an input in manufacturing or production of goods or articles for sale; |
| Clause 2 | "counterparty" means the other party involved in a transaction or agreement; | This definition provides clarity in identifying parties. |
| Clause 2 | “digital activity" means the provision of a service through the internet, or provision of digital content whether for consideration or otherwise and whether or not such activity is multisided and includes- | This definition brings digital markets within the ambit of regulatory scope. It ensures that anti competitive conduct in online market is captured. |
| (a) online intermediation services, including online marketplaces and application stores; |
| (b) online search engines; |
| (c) online social networking services; |
| (d)video-sharing platform services; |
| (e)independent interpersonal communication services; |
| (f) operating systems; |
| (g)cloud computing services; and |
| (h) online advertising services; |
| Clause 2 | "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; | This definition modernises the Act by bringing online based markets within the regulatory scope. It recognises that competition increasingly occurs in digital environments. |
| Clause 2 | "intermediate a transaction" means to facilitate the completion of a transaction between buyers and sellers in a digital market. | This definition allows for the regulation platform intermediaries. |
| Clause 2 | "multi-home" means users engaging with multiple competing digital platform services in parallel without significant switching costs and inconveniences; | This clause allows regulators to determine whether a platform’s dominance is constrained by user mobility. |
| Clause 2 | "privatization" has the meaning assigned to it under section 2 of the Privatization Act; | Section 2 of the Privatization Act defines “privatization” as a transaction that results in a transfer, other than to a public entity, of the assets and or liabilities of a public entity including the shares in a public entity. Incorporating and adopting the meaning of privatization from the Privatization Act allows for statutory coherence and consistency. |
| Clause 2 | "product information standard" means a standard relating to information, safety and health developed by the relevant government agency for the purpose of consumer benefit; | This definition links product information directly to consumer health and safety. |
| Clause 2 | "strategic market position" has the meaning assigned to it under section 4(4);and | This definition captures situations where an undertaking, despite lacking a dominant market share, possesses substantial competitive leverage by acting as an essential intermediary, controlling critical data, or influencing market outcomes. |
| Clause 2 | "superior bargaining position" has the meaning assigned to it under section 4(6). | This definition separates market dominance from superior bargaining power, enabling scrutiny of firms though not dominant wield disproportionate influence over their suppliers or customers. |
| Clause 3 | 3. Section 4 of the principal Act is amended by inserting the following new subsections immediately after subsection(3)- | This clause captures the evolving nature of modern markets, especially digital market, where competitive advantage is often derived from network effects, data control, and intermediary positioning rather than sheer size. |
| (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 independent of competitors, suppliers, users or consumers. | The inclusion of detailed factors under subsection (5), such as switching costs, multi-homing, and economies of scale, reflects an appreciation of the complex economic realities of digital markets. |
| (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- |
| (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 has been 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) In assessing or determining whether an 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. |
| Clause 4 | 4.Section 9(1) of the principal Act is amended- | This clause seeks to expand the functional mandate of the Competition Authority of Kenya by enhancing its advisory and collaborative roles. |
| (a)in paragraph (g), by inserting the word "evaluations" immediately after the word “inquiries”; |
| (b) by deleting paragraph (n) and substituting therefor the following new paragraph |
| (n) advice the Cabinet Secretary, other government agencies and stakeholders on any matter relating to competition and consumer welfare; and |
| (c)by adding the following new paragraph immediately after paragraph(n)- |
| (o) in consultation with the Cabinet Secretary, foster strategic partnerships with national, regional and international bodies on matters related to competition and consumer welfare. |
| Clause 5 | 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". | The inclusion of abuse of superior bargaining position ensures coherence with the newly introduced provisions under section 4, thereby creating a more integrated enforcement framework. |
| Clause 6 | 6. Section 23 of the principal Act is amended- | This clause expands the scope of what constitutes abuse of dominant position, particularly in the context of digital markets. Collectively, these changes mark a step towards recognising that market influence is no longer confined to traditional supply chains but increasingly exercised through intermediation and platform control. |
| (a) in subsection (1)(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);(ii) 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. |
| Clause 7 | 7.The principal Act is amended by repealing section 24A. | This clause proposes the repeal of section 24A of the Competition Act, a provision that addresses the abuse of buyer power, particularly within supply chains. This represents a structural change in the regulation by replacing it with the wider concept of the regulation of superior bargaining power. |
| Clause 8 | 8.Section 31 of the principal Act is amended in subsection (1) by inserting the following new paragraph immediately after paragraph(c)- | This clause expressly empowers the Authority to conduct investigations relating to the abuse of superior bargaining position. This amendment complements the introduction of the concept of superior bargaining position elsewhere in the Bill. |
| (d) prohibitions relating to abuse of superior bargaining position. |
| Clause 9 | 9.The principal Act is amended by inserting the following new Part immediately after section 40- | This clause introduces a new part on unfair market conduct. It consolidates and expands the regulation of abuse of buyer power, providing a structured framework that combines substantive prohibitions, illustrative conduct, sectoral regulation, and enforcement mechanisms. The aforementioned unfair market conduct deals with where a party with greater influence 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. |
| PART IIIA- UNFAIR MARKET CONDUCT | The penalty prescribed for the said conduct is severe, and appropriately so, as it serves as a deterrent against committing the offence. |
| (1)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. |
| (2) Without prejudice to the generality of subsection (1), 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, and without an objectively justifiable reason; |
| (c) refusal to receive or return any goods or part thereof without justifiable reason in breach of 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 promotion of the goods or services; |
| (e) transfer of commercial risks meant to be borne by the buyer to suppliers; |
| (f) 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 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 suppliers. |
| (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 and supplier undertaking. |
| (6) In determining a complaint relating to abuse of buyer power, the Authority shall consider all relevant circumstances, including |
| (a) the nature and determination of contract terms between the concerned undertakings; |
| (b) the payment requested for access to infrastructure; |
| (c) the price paid to suppliers; |
| (d) the conditions for termination and variation of the contract with reasonable notice; and |
| (e) the mechanism for the resolution of disputes in respect of the contract. |
| (7) A 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. |
| Clause 9 | 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. | This clause introduces a comprehensive framework prohibiting the abuse of superior bargaining position. It expands the scope of regulation under the Competition Act. This provision builds on the shift in the Bill toward addressing imbalances in commercial relationships, moving beyond traditional dominance-based competition law, and prescribes appropriate penalties in the event of violation |
| (2) Without prejudice to the generality of subsection (1), conduct amounting to abuse of superior bargaining position includes imposing trading conditions that are more unfavourable than would be expected in light of 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 a 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, or other rules associated with the transaction or service without prior notice to the counterparties; |
| (e) transfer of costs to a counterparty; |
| (f) transfer of commercial risks meant to be borne by a party to the counterparty; |
| (g) demands for preferential terms unfavourable to the counterparty; |
| (h) imposing purchase prices below competitive levels or service fees above competitive levels; |
| (i)unreasonable collection or processing of data of the counterparty; |
| (j) imposing unduly difficult conditions for the termination of service; and |
| (k) obstruction of business activities 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- |
| (a) monitor the activities of the sector or undertaking; |
| (b) impose reporting and prudential requirements and regulations to ensure compliance; and |
| (c) in consultation with the relevant stakeholders, develop and publish a code of practice to regulate the terms and conduct between counterparties. |
| (4) In determining any complaint on the abuse of superior bargaining position, the Authority shall consider all relevant circumstances, including- |
| (a) the degree of dependence by the affected undertaking or undertakings on transactions with the party under investigation; |
| (b) the position of the undertaking in the market; |
| (c) the possibility of the 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 written or not, between the counterparties. |
| (6) A person who contravenes the provisions of subsection (1) shall be liable, on conviction, to imprisonment of a term not |
| exceeding five years or a fine not exceeding ten million shillings, or to both. |
| Clause 9 | 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. | This clause establishes the procedural and enforcement framework for addressing abuse of superior bargaining position. |
| (2) The provisions of sections 31, 32, 33, 34, 35, 36, 37, 38, 39 and 40 of the Act shall apply mutatis mutandis to the investigation of complaints under this Part. | By empowering the Competition Authority of Kenya to initiate investigations either suo motu or upon receipt of complaints under this clause ensures broad accessibility and responsiveness in enforcement and furnishes the Authority with the statutory mandate and power to investigate cases of suspected abuse of superior bargaining power. |
| Clause 10 | 10.Section 41 of the principal Act is amended in subsection (2) by inserting the following new paragraph immediately after paragraph(h) | The inclusion of privatization within the statutory definition of mergers extends the Competition Authority's oversight to privatisation transactions that may impact market competition. |
| (i) privatization of Government agencies and state corporations that engage in trade as defined under section 5(5) of this Act. |
| Clause 11 | 11. Section 55 of the principal Act is amended- Amendment of section 55 of Cap 504. | This clause significantly strengthens consumer protection by broadening the scope of what constitutes misleading or deceptive conduct in trade. This enhances the enforcement capacity of the Competition Authority of Kenya and places a higher compliance burden on businesses to ensure full transparency in the promotion and supply of goods and services. |
| (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; |
| (b) in paragraph (b), by inserting the following new subparagraph immediately after subparagraph(v)-(vi) concerning any other relevant information in connection with the supply or promotion of goods or services to the consumer; |
| (c) by inserting the following new paragraph immediately after paragraph(b)-(c) withholds material information on the quality and use of a good or service. |
| Clause 12 | 12. Section 70A of the principal Act is amended- | This clause reflects a shift focus on individual consumer complaints to a broader mandate focused on consumer welfare matters. By replacing the terminology throughout the provision, the law expands the scope of issues that the Competition Authority of Kenya can address, allowing it to intervene not only when a formal complaint is lodged but also in situations affecting consumers more generally. This is in line with international best practices in the regulation of competition in Kenya. |
| (a)in the marginal note, by deleting the word "complaints “and substituting therefor the words “consumer welfare matters" |
| (b) in subsection (1), by deleting the words "consumer complaint" appearing at the end of the sentence and substituting therefore the words "consumer welfare (c) in subsection (2), by deleting the word "complaints" matter"; and substituting therefor the words "consumer welfare matters". |
| Clause 13 | 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". | This clause introduces a tougher penalty by linking fines directly to an undertaking’s gross annual turnover. This ensures that penalties are proportionate to the size and economic power of the offending business, preventing large firms from treating fines as a mere cost of doing business. |
| Clause 14 | 14. The principal Act is amended by inserting the following new section immediately after section 91-Administrative enforcement action. | The clause empowers the Competition Authority of Kenya to take direct administrative action against non compliance. At the same time, the requirement for fair administrative action and a hearing safeguards due process, balancing stronger enforcement powers with procedural fairness. |
| 91A. (1) 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 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) issuing a direction to the undertaking to take remedial action or to make specific arrangements to remedy the noncompliance within such |
| (c)imposing an administrative timeframe as may be specified; penalty of up to ten percent of the immediately preceding year's gross annual turnover in Kenya of the undertaking or undertakings in question; |
| (e) taking any other administrative enforcement action determined by the Authority under this Act. |
| (3) The administrative penalty provided under subsection (1) (c) may be recovered summarily by the Authority as civil debt. |
| (4) The Authority shall ensure that there is fair administrative action, including a fair hearing, before imposing the administrative penalty. |
