Following the launch of its new strategic plan running through 2027, the Competition Authority of Kenya (CAK) has outlined bold steps to bring previously unregulated digital players under its watch — from social media vendors and local e-commerce platforms to global tech giants and digital lenders.
Backed by a proposed amendment to the Competition Act, the authority is preparing to expand its mandate into digital markets, targeting widespread consumer protection breaches and anti-competitive behaviour that have remained unchecked for years.
In this interview, CAK Director-General David Kemei — who took office less than a year ago — speaks to the Business Daily on why the regulator is now turning its focus to the digital economy, what changes Kenyans should expect, and how the agency plans to deliver on its ambitious new targets over the next three years.
Why has the CAK intensified its focus on regulating digital markets now?
In our new strategic plan that’s running to 2027, we have committed to promoting competition and ensuring robust consumer protection across all markets.
This is what we’ve been doing, but what is going to be different this time is that we will be moving into regulating digital markets, which we haven’t been doing adequately because we don’t have the powers. So, this will be enabled by an amendment to the Competition Act.
There have been quite a number of consumer protection issues and anti-competitive practices that we haven’t been able to respond to because we don’t have the mandate. But actually, we know that in digital markets, it is possible for businesspeople to use very complex algorithms to hide practices that are anti-competitive, and that’s why some of the complaints emanate from that area.
The other complaints we’ve received from this market involve digital lenders charging very high interest rates or using different currencies, like the US dollar, and those are the consumer issues we’re dealing with even before we have the amendments.
We’ve also had complaints that border on criminality, like somebody buying goods on the internet and then those goods are not delivered.
Currently, we forward most of these cases to different regulatory agencies to deal with them because we have MoUs with various government agencies that deal with regulatory issues to ensure that those complaints are actually dealt with to the satisfaction of Kenyans who are using virtual platforms to trade.
How much more funding will CAK need to regulate this market, and do you have it?
We’ll need an additional Sh1.4 billion to execute this plan of ensuring robust competition and consumer protection, including in the digital markets over the next three years.
As you know, most jurisdictions, not just Kenya, are facing very tight fiscal conditions, so we know there may not be enough resources from the exchequer to meet this.
So, what we envisage is, one, to engage stakeholders, especially development partners. We’ll also be looking for innovative ways of raising funds, and we intend to approach experts in this area of competition so that we can work together and come up with innovative ways of bridging the gap. But that doesn’t mean we will be looking to increase penalties and fees, because our desire is to balance self-regulation and compliance in our economy.
There has been a jump in the number of cases handled by CAK. Which sectors are you specifically looking into?
One of the industries we’re actually looking into is the digital lenders’ sector, because of the many complaints we’ve been getting from consumers.
The complaints I talked about — like high interest rates, the use of different currencies, and non-disclosure of information when contracting and giving out loans.
The other industry that has received our attention is the telecommunications sector. Complaints in this sector involve charges applied to different services and many other issues.
Another one, where we issued a notice recently, is real estate development, where they’ve been having exclusive agreements with internet service providers.
We’ve also launched some investigations in the area of retail. We’ve received complaints about supermarkets that are not labelling products very well, and some selling expired products.
So, those are some of the things we’re looking at in the retail sector. We’re also looking into the food industry, especially juices. And we’re also looking at the cement industry to ensure fair competition in that area.
Why competition regulator is monitoring digital lenders
CAK launched investigations into dollar price fixing among banks. Where did that end?
After a preliminary analysis, we thought that the Central Bank is best placed to look into that competition aspect because it is their core mandate. Therefore, we submitted the concern to CBK.
As to where it is at the moment, I think the Central Bank is best placed to answer. But we have an MoU with the Central Bank that allows us to work together. So if we find a consumer protection issue that concerns a bank, we prefer leaving it to the Central Bank because of the mandate that it has on the matter.
Lastly, what consumer protection or competition issues do you see in the crypto industry, and why doesn’t CAK want to sit on the joint regulator?
The biggest issue in that area is people losing their money because they’ve been induced to make investments, and that borders more on the criminal than the competition aspect. But every market — not just that one — has competition issues and consumer protection issues. So even in the crypto industry, those concerns are there.
I know that some stakeholders think CAK should be represented in the joint regulatory body. We will have a chance to make our comments, but our position is that we would like to be an arbiter that is not involved in the decisions being made about that industry, so that we’re completely independent and making our decisions independently.
We do not want to be involved in the decisions made by that particular organisation or regulator. It would be better if we are separate.
We would like people to come to us because they know we are independent. But if we are part and parcel of the decision-making in that organisation, it limits our independence as a regulator.
