ADVOKS GLOBAL · KENYA
Competition Act
21. Restrictive trade practices
Edition: 2022-12-31 · In force
21. Restrictive trade practices
(1)Agreements between undertakings, decisions by associations of undertakings, decisions by undertakings or concerted practices by undertakings which have as their object or effect the prevention, distortion or lessening of competition in trade in any goods or services in Kenya, or a part of Kenya, are prohibited, unless they are exempt in accordance with the provisions of Section D of this Part.(2)Agreements, decisions and concerted practices contemplated in subsection (1), include agreements concluded between—(a)parties in a horizontal relationship, being undertakings trading in competition; or(b)parties in a vertical relationship, being an undertaking and its suppliers or customers or both.(3)Without prejudice to the generality of the provisions of subsection (1), that subsection applies in particular to any agreement, decision or concerted practice which—(a)directly or indirectly fixes purchase or selling prices or any other trading conditions;(b)divides markets by allocating customers, suppliers, areas or specific types of goods or services;(c)involves collusive tendering;(d)involves a practice of minimum resale price maintenance;(e)limits or controls production, market outlets or access, technical development or investment;(f)applies dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;(g)makes the conclusion of contracts subject to acceptance by other parties of supplementary conditions which by their nature or according to commercial usage have no connection with the subject of the contracts;(h)amounts to the use of an intellectual property right in a manner that goes beyond the limits of fair, reasonable and non-discriminatory use;(i)otherwise prevents, distorts or restricts competition.(4)Subsection (3)(d) shall not prevent a supplier or producer of goods or services from recommending a resale price to a reseller of the goods or a provider of the service, provided—(a)it is expressly stipulated by the supplier or producer to the reseller or provider that the recommended price is not binding; and(b)if any product, or any document or thing relating to any product or service, bears a price affixed or applied by the supplier or producer, and the words "recommended price" appear next to the price so affixed or applied.(5)An agreement or a concerted practice of the nature prohibited by subsection (1) shall be deemed to exist between two or more undertakings if—(a)any one of the undertakings owns a significant interest in the other or has at least one director or one substantial shareholder in common; and(b)any combination of the undertakings engages in any of the practices mentioned in subsection (3).(6)The presumption under subsection (5) may be rebutted if an undertaking or a director or shareholder concerned establishes that a reasonable basis exists to conclude that any practice in which any of the undertakings engaged was a normal commercial response to conditions prevailing in the market.(7)For the purposes of subsection (5), "director" includes—(a)a director of a company as defined in the Companies Act (Cap. 486);(b)in relation to an undertaking conducted by a society, a person responsible jointly with others for its management;(c)a trustee of a trust; or(d)in relation to an undertaking conducted by an individual or a partnership, the owner of the undertaking or a partner of the partnership;(e)in relation to any other undertaking, a person responsible either individually or jointly with others for its management.(8)Subsection (1) does not apply in respect of an agreement entered into between, or a practice engaged in by—(a)a company and its wholly owned subsidiary or a wholly owned subsidiary of that subsidiary company; or(b)undertakings other than companies, each of which is owned or controlled by the same person or persons.(9)A person who contravenes the provisions of this section 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 both.B – Restrictive Trade Practices Applicable to Trade Associations
Case law referring to this provision