Restraints by Enterprises

Monopolies and Cartels

The Monopolies and Cartels Division is responsible for investigating restraints by enterprises specifically on agreements or concerted practices and abuse of dominance conduct(s) that have or are intended to have an anti-competitive effect in the relevant market within the East African Community (Community). 

Restraints by Enterprises and Abuse of Dominance under the EAC Competition Act, 2006

The EAC Competition Act, 2006 (the Act) provides that an undertaking(s) shall not engage in a concerted practice or enter into an agreement if that concerted practice or agreement has, or is intended to have an anti-competitive effect in the relevant market. Therefore, undertakings shall not conclude agreements, giving effect to concerted practices listed in Part II of the Act relating to restraints by enterprises. These agreements or concerted practices include; collusion by competitors to fix prices; collusive tendering and bid rigging; collusive market or customer allocation; quantitative restraints on investment, input, output or sales; barring competitors from access to the market or from access to an association or arrangement which is essential for competition; and concerted practice restricting movement of goods within the Community.

The Act prohibit any abuse of market dominance by dominant undertakings within the Community. The existence of a dominant position is not in any way a breach of the Act. The Authority is not required to investigate an undertaking simply on the fact that it is dominant. There has to be a conduct that is anticompetitive in nature for the case to be earmarked for investigation. Part III of the Act prohibits both exploitative and exclusionary abuses by dominant undertakings. 

Exploitative abuses refer to abuses by the dominant undertaking which directly and significantly exploits suppliers or customers by taking advantage of its market power. These include practices of conduct which: limits the production of goods or services for a market to the prejudice of consumers; results in the exploitation of its customers or suppliers, so as to frustrate the benefits expected from the establishment of the Common Market; or directly or indirectly impose unfair purchase or selling prices or other restrictive practices. 

On the other hand, exclusionary abuses refer to practice which: restricts, or is likely to restrict, the entry of any undertaking into a market; prevents or deters, or is likely to prevent or deter, any undertaking from engaging in competition in a market; eliminate or remove or is likely to eliminate any undertaking from a market; directly or indirectly imposes unfair purchase or selling prices or other restrictive practices; or makes the conclusion of such agreement subject to acceptance by another party of supplementary obligations which, by their nature or according to the commercial usage, have no connection with the subject of the Agreement.