Kenya’s competition watchdog said Tuesday it will heighten surveillance in order to protect small and medium enterprises (SME) from unfair business practices.
Priscilla Njako, manager of buyer power at Competition Authority of Kenya (CAK), told a webinar in Nairobi that small businesses typically have weak bargaining positions when seeking access to consumers.
“We will deploy administrative and other measures to prevent unfair and injurious practices that progressively drive SMEs out of the market on account of an imbalanced relationship with larger firms,” Njako said during the annual competition law and policy training that seeks to equip stakeholders with a deeper understanding of competition law enforcement.
She said that where the competition watchdog establishes that a sector is experiencing incidences of abuse of buyer power, it may enhance monitoring to ensure compliance by imposing reporting and prudential requirements.
The CAK official noted that Kenya is keen to safeguard the sustainability of SMEs given their enormous contribution to the economy.
She added that the competition laws were amended in 2016 and 2019 after the realization that the regulatory framework was not adequately equipped to tackle buyer power abuse by big firms in the marketplace.
Arnold Okanga, principal analyst of buyer power at Competition Authority of Kenya, said that public interest requires that SMEs be shielded from unfair trade practices.
Okanga said that the most prevalent forms of buyer power abuse are delayed payments by suppliers, unilateral cancellation of commercial contracts, transfer of commercial risks as well as demands for preferential terms.
The watchdog revealed that one of the measures to promote competition is to require industries and sectors to develop a binding code of practice.
Okanga noted that sectors likely to experience uncompetitive practices are those with markets with one or few buyers and many sellers.