By ADAM IHUCHA
The
East African Community Competition Authority (EACCA) will be
operational from July with a mandate to curb unfair trade practices in
the region and protect consumers from substandard goods.
The authority will restrict trade practices and transactions that unduly limit fair competition.
“The EACCA
will commence operations in the 2016/2017 financial year and will act
as a one-stop-center in the enforcement of its provisions,” said
Tanzania’s Deputy Minister for Foreign Affairs and East African
Co-operation Susan Kolimba.
Dr
Kolimba said the Council of Ministers has appointed commissioners and a
secretariat who are working on the modalities of EACCA operations.
The East African Legislative Assembly approved $587,565 for the authority.
In
2015, the EAC Council of Ministers adopted the East African Community
Competition (Amendment) Bill, which provided for the establishment of
the EACCA. The authority has jurisdiction in all the five partner
states, while South Sudan will be covered at a later stage, as it is not
fully integrated into the EAC.
The
EAC Competition Act, 2006, among other things, seeks to allow consumers
to take class action against goods or services providers. It also seeks
to seal loopholes that enable trade associations and firms operating
across the region to engage in exclusive agreements, or form cartels,
forcing consumers to pay higher prices for goods and services.
Trade
specialists say that while some EAC partner states have enacted
national competition acts, these laws have proved inadequate to deal
with cross-border and multi-jurisdictional competition cases.
National
competition laws and regulations are limited to political boundaries
because they do not have extended powers to regulate company activities
across borders.
East
African Business Council economist Adrian Njau said as cross-border
trade grows, a regional competition law becomes crucial to check unfair
trade practices.
“Without
a regional competition law, monopolies or firms with a large market
share can easily abuse their market dominance by engaging in price
fixing, sharing of markets or compromising on quality to the detriment
of consumers,” Mr Njau told The EastAfrican.
Critics
Whereas
critics of competition regulation say it should not apply in a free
market because it distorts the essence of the concept, Mr Njau said the
rules are applied even in more advanced capitalist states and economic
regions such as the European Union and the US.
He added that the EACCA will level the playing field for big and small companies and enable them to compete in a fair manner.
The
EAC entered into a Customs Union in 2005 and started the implementation
of the Common Market Protocol in July 2010. As a result, competition
within the region has intensified.
A
fair, competitive market would mean more choices, better quality and
lower-priced products for consumers, and easier market access for new
firms.
Moreover,
it would mean that measures would be put in place to curb dominance,
market sharing, and concentrated mergers and acquisitions by firms with
substantial market share.
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