New Regulations Target Digital Giants and Agricultural Buyers

NAIROBI – Kenya is advancing a comprehensive overhaul of its competition laws through the Competition (Amendment) Bill, a legislative effort designed to address the evolving challenges of digital markets and persistent unfair trade practices in vital economic sectors. The bill, spearheaded by the Competition Authority of Kenya (CAK), grants the regulator significant new powers to oversee online commerce and protect suppliers from abuse by dominant buyers, particularly in the agricultural and retail industries. The proposed amendments, which are awaiting debate in the National Assembly, represent one of the most significant updates to Kenya's market regulation framework since the Competition Act was enacted in 2010.

Tackling Dominance in the Digital Age

A central focus of the bill is the rapidly expanding digital economy. The amendments empower the CAK to regulate "digital activities," a broad category that includes e-commerce platforms, social media vendors, digital lenders, search engines, and cloud computing services. Under the proposed law, the CAK can establish that a firm holds a dominant position even if its market share is below the traditional 40% threshold. This will be determined by assessing factors such as a company's "strategic market position," control over data, and the presence of network effects that create high barriers to entry for new competitors.

CAK Director-General David Kemei stated that the reforms are necessary to protect consumers from sophisticated anti-competitive practices hidden by complex algorithms. "We know that in digital markets, it is possible for businesspeople to use very complex platforms and algorithms to hide practices that are anti-competitive," Kemei said in a recent interview. The bill introduces steep penalties for violations, including fines of up to KSh 10 million and jail terms of up to five years for individuals found guilty of anti-competitive digital practices. Companies could face fines of up to 10% of their preceding year's gross annual turnover.

Protecting Suppliers Through 'Superior Bargaining Position'

The legislation also seeks to strengthen protections for suppliers by replacing the legal concept of "abuse of buyer power" with the broader term "abuse of a superior bargaining position." This change is intended to shield small and medium-sized enterprises (SMEs) from exploitative practices by large buyers, regardless of whether the buyer is technically 'dominant' in the market. Prohibited conduct includes unilateral changes to contracts, delayed payments without justification, and transferring commercial risks to suppliers. The CAK will be empowered to monitor entire sectors deemed susceptible to such abuses and establish binding codes of practice.

This reform is particularly relevant for Kenya's agricultural sector, where farmers and small suppliers often face unfair terms from large processors and retailers. The CAK has previously investigated numerous cases of buyer power abuse in sectors ranging from retail to insurance. Former CAK Director-General Wang'ombe Kariuki's tenure saw the facilitation of over KSh 2.4 billion in refunds to SMEs in these sectors.

Regional and International Context

Kenya's legislative push aligns with a broader trend across Africa and globally to rein in the power of dominant digital platforms. The initiative has roots in the Africa Heads of Competition Dialogue held in February 2022, where Kenya, South Africa, Nigeria, Egypt, and Morocco agreed to collaborate on regulating digital commerce. Furthermore, the reforms come as the East African Community (EAC) Competition Authority prepares to become fully operational on November 1, 2025, introducing another layer of regional oversight for cross-border mergers and acquisitions. In June 2025, the EAC Competition Authority and the COMESA Competition Commission signed a Memorandum of Understanding to coordinate their activities and avoid regulatory duplication.

While the bill is aimed at fostering a fairer marketplace, some international observers, like the Information Technology and Innovation Foundation (ITIF), have cautioned against potential over-regulation that could stifle innovation in Kenya's nascent digital economy. However, the Ministry of Investment, Trade and Industry maintains that fair trade practices are essential for creating a level playing field and enhancing Kenya's global competitiveness. The ultimate goal, as stated by the CAK, is to enhance the welfare of Kenyans by promoting and protecting effective competition.