Traders who sell their products and services on social media platforms, e-commerce firms and other tech companies could soon face sanctions and steep fines of up to Sh10 million, as well as jail terms of up to five years for mistreatment of consumers.
The new rules proposed by the Competition Authority of Kenya (CAK) seek to rein in digital markets.
The Competition (Amendment) Bill, 2025 introduces a raft of proposals that, if passed, will grant the CAK authority to regulate the market conduct of tech firms –including foreign giants operating in Kenya—and trading activities that take place online, including on social media platforms.
The competition watchdog says the amendments, which are awaiting tabling in the National Assembly, will empower it to better protect consumers in the digital age, where a growing share of business transactions now occurs online.
“We are hopeful that our legislators will see the wisdom of amending that Act to give us the legal muscle and mandate to regulate online markets, digital markets, e-commerce, which is actually gaining momentum in our country,” said CAK Director-General David Kemei in an interview with Business Daily.
“We know that in digital markets, it is possible for businesspeople to use very complex platforms and algorithms to hide practices that are anti-competitive, and that’s why some complaints have been emanating from that sector.”
Mr Kemei says that most of the complaints have come from the digital lending and e-commerce sectors, but the CAK has been unable to adequately respond due to the lack of explicit legal mandate over these markets.
“We’ve heard complaints about digital lenders charging high interest rates and cases where they are using different currencies from ours, and those are the consumer issues we need to deal with,” he said.
“There’ve also been cases that border on criminality, like where someone buys some goods online or virtually, and then those goods are never delivered.”
Assessing market control
A key proposal in the draft law is the formal inclusion of digital activities –defined as the provision of services or digital content through the internet—under CAK’s regulatory purview.
This would enable the authority to oversee activities on online marketplaces, such as e-commerce platforms, search engines, social media platforms, interpersonal communication services, operating systems, cloud computing services, online advertising services, among others.
The Bill also expands the definition of an “undertaking” to include natural persons, meaning that individuals –not just companies and trusts—could be held liable for breaching competition laws.
It further introduces a new approach to assessing market control in digital markets that does not rely solely on market share or dominance. This would allow CAK to investigate anti-competitive conduct even where the firm involved is not dominant locally.
Digital businesses found to be in violation of the law could face fines of up to 10 percent of their previous year’s turnover, while individuals found guilty of anti-competitive practices could be jailed for up to five years or fined up to Sh10 million.
The regulation of digital markets in Kenya has been in the works since the Africa Heads of Competition Dialogue held in February 2022, where authorities from Kenya, South Africa, Nigeria, Egypt and Morocco agreed to collaborate on regulating digital commerce.
Since then, other jurisdictions, including The Gambia, Zambia, and the Comesa Competition Commission, have joined the alliance as countries across the continent move to modernise their competition laws in order to address challenges posed by fast-evolving digital business models.
