Competition regulator offers rewards to informants in battle against cartels

Competition regulator offers rewards to informants in battle against cartels

The Competition Authority of Kenya (CAK) has rolled out an informant reward scheme, a financial incentive to informants aiding the regulator in its investigations mandate.

The scheme which came into effect at the start of the year will see informants providing credible intelligence receive one percent of the administrative penalty imposed on parties upon the conclusion of investigations with the ceiling set at Ksh.1 million.

The CAK says the scheme is targeted at persons with credible intelligence regarding restrictive trading practices that mimic those of cartels.

This to include the fixing of purchase and selling prices, the maintenance of minimum resale prices, controlling of production levels & market allocation and collusive tendering.

The scope of the programme also extends to misrepresentation and safety of products, abuse of dominance, abuse of buyer power, mergers and acquisitions implemented without approval, and unconscionable conduct.

“A confidential informant, for instance, can be an employee who was directed by their superiors to attend a meeting between competing firms where price fixing was discussed, but did not actively participate in the decision-making,” the regulator said in a notice on Thursday.

“Cartels, which harm consumers through impeding choice, innovation and increasing prices, flourish under a veil of secrecy. Through this scheme, the authority has the objective of deepening its intelligence gathering capacity with regard to such clandestine operations using informants who are close to the conduct, but not party to it,” added CAK’s Director General Wang’ombe Kariuki.

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