This chapter provides an overview of the institutional and legal framework of competition law in Kenya. After describing the main features of the country, it analyses the origin of the Competition Act and its scope of application.
OECD Peer Reviews of Competition Law and Policy: Kenya
Abstract
The Republic of Kenya (Kenya) is located on the East Coast of Africa bordering the Indian Ocean to the East, South Sudan and Ethiopia to the North, Somalia to the Northeast, Uganda to the West, and Tanzania to the South. It has a population of 53.3 million people and covers a total of 580 367 square kilometres.1 The official languages of Kenya are Swahili and English.2
Kenya is a presidential republic and adopts the tripartite system of government (legislature, executive and judiciary).3 Kenya’s legal system predominantly operates on a common law model, governed by a constitution and acts of parliament. Kenya has two levels of government, at the national and county level. Each of the 47 counties has an executive and legislative branch with devolved powers and responsibilities.4 Kenya has a bicameral parliament, with a National Assembly and a Senate (although the Senate only has the power to consider, debate and approve legislation when it concerns county governments).5 The President of Kenya is elected by direct popular vote and serves as head of state and government.6 The judicial system in Kenya consists of three superior and other subordinate courts.7
There are no constitutional provisions relating to competition law. However, there is a constitutional requirement that all public procurement contracts take place in a competitive system (as well as being fair, equitable, transparent and cost-effective), with sanctions for breaches of procurement laws and policies.8 There is also constitutional guarantees related to consumer rights.9
As of April 2025, Kenya’s Gross Domestic Product (GDP) stood at approximately USD 132 billion, with a growth rate of 4.8% in 2024. This is equivalent to a GDP per capita of USD 2 470 in current prices, or USD 7 530 when adjusted for Purchasing Power Parity (International Monetary Fund, 2025[1]). Kenya has the third largest economy in Sub-Saharan Africa, behind Nigeria and South Africa (International Monetary Fund, 2025[1]). Real GDP grew at a solid annual average rate of 5% over the 2010-2019 period lifting the country into the lower middle‑income country category in 2014.
Considered as the commercial, financial and transport hub of East Africa, Kenya has a diversified economy with a rapidly growing services sector contributing to 54% of value added and 45% of jobs mainly in the finance, information and communications, transport and tourism segments (World Bank, 2023[2]). Agriculture remains a large contributor to the economy accounting for approximately 24.4% of value added with about 40% of the total population (and more than 70% of Kenya’s rural population) earning at least part of their income from the sector which largely contributes rural livelihoods and exports of cash-crop and agro‑industrial raw materials.
At independence in 1963, Kenya pursued import substitution policies through public investment, encouragement of smallholder agricultural production, and incentives for foreign private industrial investments. Following a balance of payments crisis in the early 1970s and subsequent economic difficulties, Kenya engaged in structural adjustment programmes with the World Bank and the IMF in the 1980s, adopting more liberal trade and promoting market mechanisms and free competition. The adoption of the “Restrictive Trade Practices Monopolies and Price Control Act” in 1989, the country’s first competition act was an important outcome of this regulatory revamp.
Kenya has made important progress in its economic transformation agenda in the last decade. However, the Kenyan economy is still characterised by a restrictive regulatory environment and a strong state presence. Commercial state companies’ revenue were equivalent to at least 4.2% of the country’s GDP in 2023 (World Bank, 2025[3]). According to the World Bank’s Business of State database, there are currently 209 State Owned Enterprises (SOEs) in Kenya most of which operate in competitive sectors raising concerns about market distortions and potentially crowding out private operators (World Bank, 2025[3]). The OECD and World Bank Product Market Regulation (PMR) indicators from 2025 show that Kenya’s overall score (2.92 on a scale of 0‑6 with 0 being the least restrictive and 6 being the most restrictive) is well above the average for other middle‑income countries suggesting that product market regulations are more restrictive to competition, especially in terms of direct state participation in markets, and barriers to entry with very little improvement over the past 10 years (World Bank, 2025[3]).
Adopting pro-competitive reforms could yield significant benefits for Kenya in terms of growth and jobs outcomes. Recent estimations suggest that reducing barriers to competition in foundational services sectors (such as electricity and professional services) would boost GDP growth by 0.55 percentage points (p.p.) in a year while addressing barriers to trade and investment could boost formal jobs by 2.6% and real GDP growth by 4.9% by 2035 (World Bank, 2025[4]).
Prior to 2010, competition matters in Kenya were regulated by the 1989 Restrictive Trade Practices Monopolies and Price Control Act (“1989 Act”). The 1989 Act provided for a commissioner and a department within the government’s treasury ministry to be vested with powers to institute price control measures. Additionally, the commissioner could investigate restrictive trade practices, collusive tendering, monopolies and mergers. In practice, very little competition-related activity was undertaken during this period.
Figure 1.1 below outlines the major milestones relating to the development of the competition law in Kenya.
Source: Created by the OECD, based on information provided by the CAK.
By 2009, Kenya’s parliament sought to modernise the legislative framework, including the creation of an independent competition authority, add prohibitions on abuse of dominance, and introduce a consumer protection regime to the law. Parliament thus repealed the 1989 Act and passed the 2010 Competition Act (“Competition Act”).10
Pursuant to the Competition Act, the Competition Authority of Kenya (“CAK”) was established in 2011.11
The Competition Act has been amended thrice. In 2014, a leniency programme was introduced. In 2016, it expanded the CAK’s power to issue guidelines, grant block exemptions and (in consultation with the government minister) set merger thresholds. Most recently, in 2019 the law was amended to strengthen the provisions relating to abuse of buyer power and the conduct of professional associations.
Kenya’s Parliament is currently considering amendments to the Competition Act which would grant the CAK additional ex ante powers relating to the regulation of digital markets. The proposed amendments would also revise the Competition Act to provide stronger protections for smaller parties against unfair contract terms in commercial negotiations.12
1.3.1. Object and application of the law
(a) increase efficiency in the production, distribution and supply of goods and services;
(b) promote innovation;
(c) maximize the efficient allocation of resources;
(d) protect consumers;
(e) create an environment conducive for investment, both foreign and local;
(f) capture national obligations in competition matters with respect to regional integration initiatives;
(g) bring national competition law, policy and practice in line with best international practices; and
(h) promote the competitiveness of national undertakings in world markets.
The Competition Act applies to all persons in Kenya. The government, state corporations and local authorities are subject to the Competition Act so far as they “engage in trade”.15 While non-exhaustive, the Competition Act specifies that:16
The sale of a business or asset by the government or state entity constitutes trade.
The imposition and collection of taxes does not constitute trade.
The granting, revoking or collection of fees relating to licences, permits and authorisations does not constitute trade.
Internal transactions within the government or other state entities does not constitute trade.
The Competition Act has application when conduct:17
a Kenyan citizen or resident,
a Kenyan firm or firms carrying on business in Kenya,
any person supplying or acquiring goods or services in Kenya or within Kenya,
any person outside Kenya that is acquiring shares or assets resulting in the change of control of a business, part of a business or an asset of a business, in Kenya.
The Competition Act covers all typical areas of enforcement and advocacy powers, namely, prohibited agreements (horizontal, vertical and bid rigging), abuse of dominance, merger control, market studies and advocacy opinions.
Contraventions of the Competition Act can be enforced through a civil law administrative decision of the CAK. However, all contraventions of the law also constitute a criminal offence and carry criminal penalties of up to five years imprisonment and/or a fine of up to KES 10 million (around EUR 66 000). In practice, no criminal enforcement of the Competition Act has ever taken place. This is discussed in Chapter 3 when discussing the sanction regime in Kenya.
Part VI of the Competition Act includes provisions on consumer protection. The CAK also serves as the consumer protection authority.
Additionally, the Competition Act contains a prohibition on the abuse of buyer power. This provision relates to conduct such as unfair contract terms, unjustified delays in payments, unjustified unilateral termination of commercial relationships, and demands for preferential terms unfavourable to the supplier.18 Abuse of buyer power is not considered to be competition enforcement for the purposes of this Peer Review. The CAK’s practice relating to abuse of buyer power is only discussed in Chapter 2 as it relates to its enforcement prioritisation.
1.3.2. Exemptions
There are no general exemptions to the Competition Act. The Competition Act provides for exemptions from the provisions of the law covering agreements or abuse of dominance if there are compelling public policy reasons. The four criteria for the determination of exemption applications are the extent to which the conduct is likely to contribute or result in:19
(a) maintaining or promoting exports;
(b) improving, or preventing decline in the production or distribution of goods or the provision of services;
(c) promoting technical or economic progress or stability in any industry;
(d) obtaining a benefit for the public which outweighs or would outweigh the lessening in competition that would result, or would be likely to result, from the agreement, decision or concerted practice or the category of agreements, decisions or concerted practices.
Applications for exemptions must be filed with the CAK. The CAK then publishes the proposed exemption in the government Gazette and calls on interested parties to submit written views to the CAK.20 The CAK then issues a decision on the exemption (including rejections), which must include reasons.21 Exemptions may include the imposition of conditions.
Exemptions may be revoked if there has been a material change of facts, the grant of an exemption was based on incorrect or misleading information, or if the conditions of the exemption are breached. Revocations of exemptions must also be published in the Gazette with a call for third party input.22 A breach of any conditions imposed on the exemption is also an offence under the Competition Act.23 The maximum sanction for breaching the Competition Act is a fine not exceeding KES 500 000 (EUR ~3 300), or imprisonment for a term not exceeding three years, or both.24
Parties may also seek exemptions for conduct in relation to any right or interest acquired or protected by intellectual property laws.25 Anticompetitive restrictions in the rules governing professional associations or trade bodies may also be exempted by application if they are reasonably required to maintain professional standards or the ordinary functions of the profession.26
There is no de minimis exemption to the ambit of the Competition Act.
Table 1.1 below sets out the number of exemptions granted in the past five years.
Note: *Applications may not be granted in the same year as they were filed.
Source: CAK.
The CAK notes that while they do conduct compliance checks on exemptions granted, they do not periodically assess exemptions to determine whether they are necessary and do not go beyond achieving their objective.
An application by the Energy Dealers Association in 2019 is discussed in greater detail in Chapter 4 as the exemption application uncovered long-term cartel conduct in the gas cylinder exchange market which had not been authorised.
1.3.3. Creation of appellate body
The Competition Act also creates the Competition Tribunal to hear appeals of decisions of the CAK. Under the legislation, decisions of the Competition Tribunal are then appealable to the High Court of Kenya as the second and final level of appeal.27
Chapter 8 of this Peer Review provides a detailed assessment of the practices and procedures related to appeals and judicial review under the Competition Act.
1.3.4. Regulated sectors
The Competition Act applies across all economic sectors and the CAK is the only authority with powers to enforce the legislation. Nonetheless, authorities in some regulated sectors do have some limited legal powers relating to competition law and policy in Kenya.
The Communications Authority has the power to investigate anticompetitive conduct under their legislation.28 However, in practice, this has not taken place. In addition, the Energy and Petroleum Regulatory Authority has a specific mandate under its legislation to work with the CAK on monitoring “the conditions of contractors’ operations and their trade practices”, and “to ensure and facilitate competition, access and utilisation of facilities by third parties”.29
Moreover, in the banking, energy, insurance and telecommunications sectors, both the CAK and the relevant sector regulator have concurrent jurisdiction to review mergers. In these cases, authorisation from both authorities is required before a transaction can be implemented. Each authority conducts its own assessment and issues an independent decision, with the power to impose remedies or prohibit the transaction. When assessing such mergers, the sector regulator mainly focusses on regulatory and technical aspects (such as licence conditions and compliance with regulatory requirements), while the CAK evaluates their impact on competition, although this distinction is not always easy to draw in practice.
In addition, the Capital Markets Authority has the power to review mergers involving publicly listed companies.
Chapter 10 of this Peer Review on co‑operation provides greater detail on the practice and memoranda of understanding that exist between the CAK and sector regulators regarding competition functions.
1.3.5. Supranational competition frameworks
Kenya is a member of three supranational trading blocs relevant to its competition framework. These are:
The Common Market for Eastern and Southern Africa (COMESA) – which has an active supranational competition enforcement framework and a regional competition authority. The COMESA framework includes the ability to investigate and enforce competition matters in Kenya that have regional effects and obligations on the CAK to support.
The East African Community (EAC) – which has a supranational competition enforcement framework and a regional competition authority due to commence merger control functions in November 2025. The EAC framework includes the ability to investigate and enforce competition matters in Kenya that have regional effects and obligations on the CAK to support.
The African Continental Free Trade Area (AfCFTA) – which is in the process of designing a supranational competition enforcement framework, including a continental competition authority. At the time of drafting this Peer Review, the specific operations of the AfCFTA competition framework were still under negotiation.
The CAK’s practice relating to supranational competition enforcement is discussed in Chapter 5 on mergers, as merger control is the main aspect of supranational enforcement currently taking place in the region.
A broader discussion on the CAK’s international co‑operation practice, including supranational competition enforcement is included in Chapter 10 of this Peer Review.
The basic pillars of competition law are present in the legislation and are in line with good practice internationally. In general, stakeholders did not raise major concerns regarding the underlying competition law framework in Kenya.
Four specific concerns regarding the legislative framework were highlighted during the OECD fact-finding mission.
The first relates to the previous amendments of the Competition Act, namely that changes have been added in a piecemeal manner without sufficient consideration of what is already in the legislation. Stakeholders expressed confusion that the overlap between the law on abuse of dominance and abuse of buyer power had become confusing to interpret, as had the provisions relating to professional and trade associations.
The second is forward-looking, regarding the potential reforms to the Competition Act to add provisions on ex ante digital platform regulation. Stakeholders expressed concerns that the significant legislative amendments being proposed do not connect with the findings of relevant market study activities, nor has there been any enforcement action in this area to date to prove that the existing legislation is not adequate to address harm.
Thirdly, is the introduction of additional supranational competition authorities with jurisdiction in Kenya. In the long-term, there may be four overlapping competition frameworks in Kenya, an unprecedented number compared to other competition authorities globally. This creates risk of unnecessary confusion and duplication for stakeholders in Kenya (including the CAK). A wide range of external stakeholders noted that they were concerned about costs and resource burdens placed on parties, noting it could disincentivise investment. More detail on the supranational frameworks is included in Chapter 5 on mergers and Chapter 10 on co‑operation.
Finally, evidence gathered by the OECD indicates that the CAK does not engage in periodic assessment of exemptions it has granted, only conducting compliance checks once the exemption period has lapsed. This does not align with the OECD Recommendations that relate to exemptions. These are the:
Recommendation of the Council concerning Effective Action against Hard Core Cartels [OECD/LEGAL/0452], which calls on adherents to “make their exemptions transparent and periodically assess their exemptions to determine whether they are necessary and limited to achieving their objective”.
The Recommendation of the Council on Competition Assessment [OECD/LEGAL/0455], which calls on adherents to ensure that an “exception should be defined for a limited period of time, typically by including a sunset date, so that no exception would persist when it is no longer necessary to achieve the identified policy objective”.
References
[1] International Monetary Fund (2025), IMF Datamapper - Kenya Datasets, https://www.imf.org/external/datamapper/profile/KEN (accessed on 12 November 2025).
[3] World Bank (2025), Beyond the Budget : Fiscal Policy for Growth and Jobs - A Public Finance Review for Kenya, World Bank Group, Washington DC.
[4] World Bank (2025), From Barriers to Bridges: Procompetitive Reforms for Productivity and Jobs in Kenya, https://documents.worldbank.org/en/publication/documents-reports/documentdetail/099112125052016953.
[2] World Bank (2023), Kenya Country Economic Memorandum 2023 : Seizing Kenya’s Services Momentum, World Bank Group, Washington DC, http://documents.worldbank.org/curated/en/099072623125529056 (accessed on 12 November 2025).
← 1. Kenya National Bureau of Statistics, “Population”, https://www.knbs.or.ke/.
← 2. Constitution of Kenya, art 7(2).
← 3. Constitution of Kenya, art 1(3).
← 4. Constitution of Kenya, art 6; Constitution of Kenya, schedule 4.
← 5. Constitution of Kenya, ch 8.
← 6. Constitution of Kenya, ch 9.
← 7. See Constitution of Kenya, ch 10. The three superior courts are the Supreme Court, Court of Appeal and the High Court. The Employment and Labor Relations Court, the Environment and Land Court are considered to have the same status as the High Court. The subordinate courts consist of the Magistrates Courts, Small Claims Courts, Kadhi Courts, Tribunals and the Courts Martial.
← 8. Constitution of Kenya, s 227.
← 9. Constitution of Kenya, s 46.
← 10. An Act of Parliament to promote and safeguard competition in the national economy; to protect consumers from unfair and misleading market conduct; to provide for the establishment, powers and functions of the Competition Authority and the Competition Tribunal, and for connected purposes (Competition Act), CAP 504 (2010).
← 11. Competition Act, s 8.
← 12. Competition (Amendment) Bill 2024.
← 13. Competition Act, s 3.
← 14. Competition Act, s 3.
← 15. Competition Act, s 5.
← 16. Competition Act, s 5(5).
← 17. Competition Act, s 6.
← 18. Competition Act, s 24A.
← 19. Competition Act, s 26(3).
← 20. Competition Act, s 25.
← 21. Competition Act, s 26(1).
← 22. Competition Act, s 27(1)-(2).
← 23. Competition Act, s 27(3)-(4).
← 24. Competition Act, s 91.
← 25. Competition Act, s 28.
← 26. Competition Act, s 29.
← 27. Competition Act, p.p. VII.
← 28. Kenya Information and Communications Act (2012), p.p. VIC.
← 29. Energy Act (2019), ss 10(m), 10(bb).