* The consequences of failing to comply with competition and consumer protection law are serious
* They include fines, imprisonment for up to five years, civil actions by third parties and reputation damage
By Duncan Mlanjira
The Competition and Fair Trading Commission (CFTC) Executive Director, Lloyds Vincent Nkhoma said they are never happy to investigate and order fines against businesses that have flouted regulations — thus he has encouraged companies to develop compliance policies.
A statement from CFTC quotes him as saying that at the Commission’s annual Leaders’ Summit in Mangochi, CFTC Executive Director Lloyds Vincent Nkhoma, saying: “The consequences of failing to comply with competition and consumer protection law are serious.
“They include fines, imprisonment for up to five years, civil actions by third parties and reputation damage. All businesses should ensure that they have adequate policies and procedures in place for early detection in order to address the danger areas,” Nkhoma is quoted as saying.
The delegates from various companies were encouraged for the need to look at how their firms relate with other competitors, such as horizontal agreements and put in place procedures that prevent members of staff from participating in conducts that would constitute collusion.
Nkhoma is also reported to have said companies need to look at how their firms relate with downstream players such as customers and suppliers and avoid agreements that undermine other suppliers or exploit customers and consumers.
He further highlighted a number of areas which have been proposed for change under the CFTA review — such as mandatory merger application; changing fines to be a percentage of turn over; introduction of on-spot fines; replacement of the Consumer Council under the Consumer Protection Act; and introduction of commitment & settlement procedures.
During an interface with the media soon after his appointment as Executive Director, Nkhoma highlighted some of the track records the Commission has concluded in the past decade under its mandate that include improved advocacy and awareness which saw the number of complaints received drastically going up — rising from about 10 in 2013 to over 300 in a year.
Just 2023 alone, he reported that CFTC has received over 332 complaints on unfair trading practices and recovered about K42 million, which has been refunded to consumers for different violations.
It also investigated and made orders on many restrictive business conduct in sectors such as public transport, private schools, sugar distribution, insurance, telecommunications, and other sectors — as well as conducting market studies which have made great policy recommendations such as in the poultry sector study; manufacturing; pharmaceutical; agricultural; wholesale; education and transport sectors.
In terms of mergers, Nkhoma said CFTC has investigated both local and regional mergers in collaboration with other partners such as the COMESA Competition Commission (CCC) — and that in awareness and sensitsation, “the institution has covered the entire country with workshops, targeted sensitization meetings, school clubs interaction, among others”.
“The institution also continues to carry out price monitoring for essential commodities such as cooking oil, bread, AIP fertilizer and in order to enhance accessibility, we have opened a new regional office in Mzuzu to ensure that it serves traders and consumers in the Northern Region better.
“As a way forward, we want to do more in areas of cartel enforcement. This is a country where more of the production and supply sectors are concentrated and prone to cartel conduct such as price fixing, market allocation, bid rigging and other vices.”
He thus said in order to move with the times, the Commission together with its legal authorities and all other stakeholders, are reviewing the Competition and Fair Trade Act which gives the institution “an opportunity to put in place solid tools for identifying and breaking cartel conduct, which is the most serious conduct in terms of impeding consumer welfare”.
The review of the CFTA is long overdue also for the set fine which was enacted in 2013 and was stiff enough then, but some big corporate businesses can just be opting to pay the meager fine and continue carrying out unfair trading practices.
When an offender is found guilty, the penalties — under the Competition and Fair Trading Act (CFTA) — provides that they shall be liable to a fine of K500,000 and 5 year jail term, but this is a little fine for big business habitual offenders, who need to be given stiffer punishments in order to address the malpractices by most public service providers.
Appointed on February 6, Nkhoma is no stranger to CFTC operations — as he is a professional expert in competition policy and was part of the initial staff that operationalised CFTC in 2007 on secondment from the Ministry of Trade & Industry.
He has served at the COMESA Competition Commission (CCC) as head of Enforcement and Exemptions and currently serves on the CCC Board.
He has vast experience in national and regional trade, investment and industrial development programmes having worked at Ministry of Trade & Industry. He has also served as Vice-Consul responsible for Investment and Trade at the Malawi Consulate General in Johannesburg, South Africa.
He holds a Master’s Degree and a Post Graduate Diploma in Economics for Competition Law from Kings College London and also holds a Bachelor’s Degree in Social Sciences obtained from the University of Malawi — majoring in economics.