* Excessive pricing of products and services has been one of the most prevalent conduct by businesses
* Unfortunately, the CFTA does not have provisions specifically prohibiting excessive pricing
By Duncan Mlanjira
Before the 2024-2025 National Budget sitting of Parliament rises this week, the legislators are expected to discuss the amendments that are contained in the Consumer & Fair Trading (CFT) Bill.
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Spokesperson for Consumer & Fair Trading Commission (CFTC) Innocent Helema says some of the changes in the Consumer & Fair Trading Act (CFTA) include definitions and concepts, saying the prevailing CFTA does not include some key definitions and concepts in the regulation of anticompetitive business practices (ABPs) and unfair trading practices (UTPs).
“Further, the CFTA does not have updated definitions of some relevant terms in the regulation of ABPs and UTPs,” he said. “For instance, the CFTA narrowly defines the term ‘Consumer.
“For this reason, vulnerable groups such as contract farmers who do not fall within that definition are not effectively protected from UTPs.
“Excessive pricing of products and services has been one of the most prevalent conduct by businesses. Unfortunately, the CFTA does not have provisions specifically prohibiting excessive pricing.
“Buyers, especially those involved in buying farm produce, go scot-free under the CFTA when they buy produce at unjustifiably lower prices or enter into contracts they do not plan to honour.
“The CFT Bill has addressed all these gaps accordingly,” Helema said.
Innocent Helema
Also contained in the changes is the suitability and independence of Commissioners, and Helema said “as adjudicators of cases, commissioners of the CFTC are not thoroughly subjected to scrutiny of Parliament once appointed, to determine their suitability and qualification for their office”.
Similarly, their independence as adjudicators is not guaranteed in the current law. The draft Bill has, therefore, proposed that, as a way of ascertaining their suitability and enhancing their independence, their appointment and removal from office be subjected to the scrutiny of the Public Appointments Committee of Parliament.”
On framework for fines and penalties, Helema said under the CFTA, “when the Commission finds an errant enterprise, it has been imposing fines”.
“However, in 2023, in the CFTC vs Airtel Malawi Limited case, the High Court ruled that Section 51 of the CFTA does not empower it to impose fines — thereby weakening its regulatory mandate.
“In addition, the CFTA does not provide for aggravating and mitigation factors for the Commission to consider in coming up with fines and/or orders. The CFT Bill has ably included the power to levy administrative fines taking into account the aggravating and mitigating factors.”
Helema further said the current CFTA provides for voluntary notification of mergers and acquisitions — which means mergers having potential harm to competition process and consumer welfare could be effected without seeking the CFTC approval.
“The CFT Bill has made notification of mergers and acquisitions mandatory based on determined thresholds,” he said.
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