The Act promotes competition in the national economy; protects consumers from unfair and misleading market conduct; and establishes the Competition Authority of Kenya & Competition Tribunal.
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· This Act was passed to promote and safeguard competition in the national economy; to protect consumers from unfair and misleading market conduct; and to provide for the establishment, powers and functions of the Competition Authority and the Competition Tribunal.
· The Competition Authority of Kenya (CAK) as the regulator is charged with ensuring there is fair competition in all sectors of the economy including in the construction industry and take appropriate action. Competition influences prices and hence affordability of housing. Under section 9 of the Act, CAK may carry out inquiries, studies and research into matters relating to competition and the protection of the interests of consumers; investigate impediments to competition, among other functions.
· Section 29 of the Act however allows for an exemption for professional associations by providing that a professional association whose rules contain a restriction that has the effect of preventing, distorting or lessening competition in a market shall apply in writing or in the prescribed manner to the Authority for an exemption where such exemption is necessary for maintenance of professional standards or the ordinary function of the profession, having regard to internationally applied norms.
· In the above regard, various professional associations including the Law Society of Kenya (advocates) and other professionals in the building sector have their own fees schedule that they charge for their services, and of which undercharging below the set fees is considered a professional misconduct. The net effect of these rules is to increase the cost of housing given that these fees paid to the professionals are considered in the final pricing, given that they form part of construction costs. However, the setting of minimum fees in the various professions has been justified on grounds it is necessary for maintenance of minimum professional standards by attracting and retaining talent in the profession, as well as being in tandem with internationally applied norms.
· Section 59 of the Act also makes it an offence for a person in trade to supply goods that do not comply with the set consumer product safety standard, unsafe goods or those that are permanently banned.
· Section 21(3) outlaws any undertaking, or associations of undertakings, from making decisions or engaging in concerted practices which directly or indirectly fix purchase or selling prices or any other trading conditions in relation to the provision of goods and services, as well as minimum resale price maintenance. In 2022 the CAK that it was launching a probe into top steel manufacturers over allegations of price-fixing/concerted practices including informal agreements on pricing-which were contributing to high construction costs and hurting consumers.[] Steel is a vital component in the construction industry that is used in making products such as roofing sheets, reinforcement bars, steel beams and columns, windows and doors, among others.[]
· The CAK issued an raising concerns about the setting of minimum charges or fees by some professional associations[] without observing the provisions of the Act on exemptions. The CAK however frowned upon the intended floor pricing arguing that ‘the envisaged arrangements of setting minimum rates/fees, highlighted in the Media recently, are only meant to extinguish competition among members of the professional associations to the detriment of clients/consumers.’
[1] < >
[2] Syovata Ndambuki, ‘Building with steel: Why it’s the go-to construction material for developers’ (Daily Nation, May 12, 2022) < >
[3] These included intended move by engineers vide the proposed Engineers (Scale of Fees for Professional Engineering Services) Rules, 2021 and accountants. See, < > also, < >
