New review exposes Competition Authority's enforcement gaps, weak penalties

The review finds that while Kenya has built a modern competition framework, enforcement by the Competition Authority of Kenya remains weak and under-resourced.

The authority, which regulates monopolies, mergers and cartel behaviour in the corporate sector, is operating with limited funding and staff, well below international standards. It also lacks a dedicated economics unit, undermining its ability to handle complex market investigations.

"We could do more to resource CAK, I think we could do that and I will give you the support required, if you need a chief economist, why not?" stated Chris Kiptoo, principal secretary at the National Treasury.

Over the past five years, enforcement activity has been notably low. Most cases are settled out of court, often with minimal penalties and no admission of wrongdoing, raising concerns that companies are not sufficiently deterred from anti-competitive behaviour.

Fines remain significantly below global benchmarks, and critical tools such as whistleblower and leniency programmes have failed to attract any applicants.

The OECD also flags governance concerns, including unclear appointment and dismissal rules for top leadership, which could expose the regulator to political influence.

"The competition regime in Kenya is a modern regime, it has a strong competition law foundation, and the competition authority in Kenya has comprehensive powers. But there are elements that can be improved," stated António Gomes.

While merger control systems are in place, no mergers have been blocked to date. At the same time, Kenya’s participation in regional blocs like Common Market for Eastern and Southern Africa and the East African Community is creating overlapping regulatory layers, increasing compliance costs and legal uncertainty for businesses.

"Some of the strengths that came out of this review is that we have a robust legal framework, we have a mature and procedural merger control regime, we have intact cooperation between regulators internally and regionally and the fact that CAK is playing a great role internationally when it comes to competition and consumer matters," stated David Kemei.

The OECD is now recommending sweeping reforms, including increasing funding, tightening penalties, strengthening independence and improving transparency, to make the system more effective.