This chapter covers the law relating to private rights of action under the Competition Act.
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9. Private enforcement
Copy link to 9. Private enforcementAbstract
9.1. Law and practice
Copy link to 9.1. Law and practiceWhile Kenya’s civil law framework enables parties to bring private actions for follow-on damages, there is nothing in the Competition Act or related guidelines related to private enforcement. In practice there is no private enforcement in Kenya.
9.1.1. Standing for private claims
The Competition Act does not specifically establish any right or process to pursue private enforcement of competition harms. The CAK noted in their questionnaire response that as there is no specific provision preventing a party from filing a private claim, parties can theoretically bring them.
There are no guidelines or regulations that set out the specific process for private claims. The CAK notes they interpret the law to only cover follow-on private enforcement as only the CAK has the power to declare what is an infringement of the Competition Act. This means private enforcement can only be brought after the CAK has issued a decision finding an infringement.
The Competition Act does not grant the CAK any powers to intervene in private proceedings.
9.1.2. Time limits
Under section 86 of the Competition Act, “an investigation into an alleged infringement of the provisions of this Act may not be initiated after three years from the date the infringement has ceased”.
The Competition Act does not specify a limitation period for private rights of action. Kenya’s Limitation of Actions Act also sets a three‑year time limit for tort actions.1
9.1.3. Collective redress (class actions)
The CAK notes that there is nothing preventing private parties from seeking follow-on damages through a class action.
The Kenyan Civil Procedure Rules set out the requirements of forming a plaintiff group for class actions.2
9.1.4. Access to competition authority information
The Competition Act does not set out rules on private claimants seeking evidence or information gathered by the CAK as part of its investigations. CAK decisions are not published as well, limiting the availability of publicly available information that can be relied upon for private claimants.
Under its leniency guidelines, the CAK commits to protecting the identity of and material provided by successful leniency applicants, including after the end of proceedings. However, in practice, the CAK has never received a leniency application, meaning the CAK has not had to consider what information should be publicly available in a CAK decision.
9.1.5. Private enforcement practice
The CAK reports there has never been a single instance of private enforcement in Kenya. Nor has the CAK engaged in any advocacy activities relating to private enforcement.
During the OECD fact-finding mission, private practitioners did not express any interest in recommending that their clients pursue private claims relating to competition law.
9.2. Analysis
Copy link to 9.2. AnalysisThe Recommendation concerning Effective Action against Hard Core Cartels [OECD/LEGAL/0452] recommends that anyone who has suffered harm caused by a hard core cartel should have the right to obtain redress or claim compensation for that harm from the persons or entities that caused it.
Evidence from the (OECD, 2015[1]) suggests that the lack of private enforcement is not unique to Kenya. This is typically driven by a range of factors, including:
Developing a competition culture: potential claimants are less likely to be aware of their private rights of action in jurisdictions that have more recently introduced competition laws or created competition authorities. Collective redress schemes / class actions may not be familiar concepts, creating a further barrier for bringing claims.
Insularity and/or informality of the economy: this may act as a disincentive from bringing action against a firm one may continue dealing with in the long term.
Cultural norms: parties may be hesitant to publicly accuse one another of wrongdoing and seek damages in relation to conduct that would be enforced by a public body.
Risks and cost of litigating: the lack of competition law expertise among judges may create a risk of poor outcomes for plaintiffs. Further, the lack of established process or precedent for private claims means it is unlikely that private practitioners would recommend clients spend time and money on a novel form of litigation. Lawyers are more likely to recommend parties refer the alleged conduct to the CAK in the hopes of obtaining a more reliable outcome.
There is no relevant framework for private enforcement in the Competition Act, nor is there any private enforcement taking place in practice in Kenya.
Private enforcement could be expected to develop if public enforcement increases, as infringement decisions allow claimants to rely on the CAK’s findings to prove their harm. Private enforcement can, in its turn, reinforce public enforcement by strengthening deterrence.
Given the general lack of private enforcement of competition law around the world, Kenya is not a significant outlier compared to Members and non-Members of the OECD Competition Committee (OECD, 2023[2]).
References
[2] OECD (2023), “The Future of Effective Leniency Programmes: Advancing Detection and Deterrence of Cartels”, OECD Roundtables on Competition Policy Papers, No. 299, OECD Publishing, Paris, https://doi.org/10.1787/9bc9dd57-en.
[1] OECD (2015), “Relationship Between Public and Private Antitrust Enforcement”, OECD Roundtables on Competition Policy Papers, No. 174, OECD Publishing, Paris, https://doi.org/10.1787/8c535258-en.