2. 9/17/2015Kanyi: MPC KENYA1 PREPARED FOR WORK SHOP ON COMPETITION POLICY AN LAW ADMINISTRATION FOR STAFF AND MEMBERS OF TRADE PRACTICES INVESTIGATION COMMISSION, ETHIOPIA

3. Introduction Prior to 1945, most of the world thought that cartels brought widespread benefits. Cartels are not necessarily the opposite of liberalism and competition, but a variation on them. External shocks or demand instability destabilized cartels as much as cheating. Cartels are a subset of inter-firm cooperation, which ranges from highly, fluid spot markets with no individual market power to fully integrated enterprise hierarchies. 9/17/2015Kanyi: MPC KENYA2

4. While long-term contracts with suppliers, subcontractors, wholesalers, or retailers or enterprise groups might be anticompetitive, they are not cartels. In the modern business world trade associations, professional organizations and similar institutions usually perform many of the activities and achieve in a legal or indirect way the goals of direct collusive agreements. 9/17/2015Kanyi: MPC KENYA3

5. What is a cartel? Combination of independent business organizations formed to regulate production, pricing, and marketing of goods by the members. A group of parties, factions, or nations united in a common cause; a bloc. A combination of independent often international companies intended to limit competition and increase profits. A fine line exists between legitimate associations and cartels. Cartels can also be defined depending on their objective: 9/17/2015Kanyi: MPC KENYA4

6. Procedural Cartels :these are contractual or condition Market Cartels: these types include Spot markets, Oligopolistic competition (Implicit collusion), trade associations among others. Hard-Core cartels (illegal); these are customer cartels, specialization cartels, territorial cartels, quota cartels, price cartels. Industrial/Social policy: Import/Export cartels, rationalization cartels, recession cartels, Co-operative Marketing.  Cartels under the armpit of national sovereignty. An example of a relatively new international cartel is the Southeast Asia rice producing countries. 9/17/2015Kanyi: MPC KENYA 5

7. Addressing cartels through competition law: Kenya Perspective Law The Restrictive Trade Practices, Monopolies and Price Control Act (Cap. 504). Enacted in 1988. Cap 504 Laws of Kenya has the principal authority to investigate cartels. Participation in a hardcore cartel is an offence under Section 11 (1) and Section 12 (2) of Cap 504 Laws of Kenya. 9/17/2015Kanyi: MPC KENYA6

8. 9/17/2015 Kanyi: MPC KENYA 7 Decision-making institutions.  MPC,  Minister,  RTP Tribunal, and  High Court of Kenya Handling complaints and initiation of proceedings.

9. Leniency There is no leniency programme. Investigative powers of the enforcing institution entitled to access all business documents he deems necessary for investigation The Commissioner is entitled to copies of records of business transactions within reasonable time. Private locations. 9/17/2015Kanyi: MPC KENYA8

10. Procedural rights of businesses/individuals. - Information can only be accessed by a third party through a Court Order. Decisions by: Commissioner, Minister, RTPT and High Court Sanctions on the merits of the case: can be monetary, custodial or both. 9/17/2015Kanyi: MPC KENYA9

11. Cartel agreements are economically unstable.economically Once a cartel is broken, the incentives to form the cartel return and the cartel may be re-formed. International and national cartels are hard to burst. Cartels do not abolish competition, but regulate it. 9/17/2015Kanyi: MPC KENYA10

12. END OF PRESENTATION THANK YOU ALL FOR YOUR ATTENTION! 9/17/2015 Kanyi: MPC KENYA 11