KAMPALA – Uganda’s new Competition Act, 2024, is a significant step towards promoting fair competition, preventing monopolistic practices, and protecting consumers. This law represents a major shift in the country’s regulatory landscape, aligning Uganda with regional and international best practices in market regulation.
The Act applies to various areas, including Anti-Competitive Practices, such as price-fixing and exclusive supply and distribution agreements, Abuse of Dominant Position, where a single entity has significant market power, and Mergers, Acquisitions, and Joint Ventures that may have an adverse effect on competition.
On Friday, H&G Advocates hosted a Competition Law Symposium to explore the implications of Uganda’s new Act, which came into effect on April 19, 2024. The symposium aimed to educate and engage senior management, policymakers, regulators, and industry professionals on the Uganda and regional competition law framework.
The Competition Act seeks to promote fair competition, prevent monopolistic practices, and protect consumers by regulating anti-competitive practices such as price-fixing, collusion, abuse of dominant market positions, and anti-consumer behavior. The law introduces provisions that create and empower a Technical Committee within the Ministry of Trade to investigate and penalize businesses that engage in anti-competitive and unfair practices.
Zackey Kalega, Commissioner of Internal Trade at the Ministry of Trade, Industry and Cooperatives, emphasized the significance of Uganda’s National Competition Law, enacted in 2014. “With the government’s liberalization policy, our economy opened up, attracting numerous players and presenting both opportunities and challenges.”
He notes that the law was enacted to ensure effective competition within the market, addressing three critical areas: anti-competitive agreements, abuse of dominant positions, and mergers and acquisitions that could lead to unfair practices.
“The law safeguards consumers by regulating monopolies, preventing a single entity from dictating prices and supply,” Kalega noted. By doing so, it promotes a healthy, competitive market environment in Uganda.
Kalega highlighted the importance of this legislation in maintaining fair business practices, encouraging innovation, and protecting consumer interests.
“The National Competition Law is a vital tool for Uganda’s economic growth, as it fosters competition, drives economic efficiency, and enhances consumer welfare.”
By enforcing this law, he explained that the government aims to create a level playing field for businesses, promote fair competition, and ultimately benefit consumers through better quality products, services, and prices.
A newly published law in the national gazette significantly alters the business landscape in Uganda, according to Joel Basoga, Head of Technology Practice at H & G Advocates.
“It’s crucial for businesses and consumers to grasp the obligations stemming from this legislation,” Basoga emphasized.
He says the law mirrors consumer protection laws in other East African countries, presenting both opportunities and challenges.
“We must draw lessons from neighboring jurisdictions, which have had similar laws for over seven years, to determine the best standards for Uganda.”
The legislation creates a new administrator, the Ministry of Trade, while existing regulators, such as the Uganda Communications Commission and Insurance Regulatory Authority, continue to oversee specific sectors. Basoga notes that this dual regulation may lead to overlapping jurisdictions and complexity, potentially hindering business growth.
He cautioned that multiple regulatory frameworks can also slow decision-making processes, emphasizing the importance of clarity for businesses.
“Decisions are made with certainty, and the more legal frameworks you have to navigate, the slower decision-making becomes, negatively impacting businesses.”
To thrive in this new regulatory environment, Basoga advises businesses to:
- Understand their obligations under the law, particularly regarding fair engagement with customers, and avoid unfair practices.
- Familiarize themselves with various regulators representing consumer interests.
- Ensure compliance to avoid legal repercussions.
In her keynote speech, Lady Justice Prof. Lillian Tibatemwa Ekirikubinza said that fair competition laws play a vital role in promoting economic growth and protecting consumers.
“In Kenya, for instance, the law aims to enhance the welfare of its people by safeguarding efficient competition, preventing misleading conduct, and fostering innovation. This, in turn, increases efficiency in production, distribution, and supply of goods and services.”
Globally, particularly in Europe, she says competition laws facilitate a common market, ensuring free movement of goods and promoting economic interdependence to prevent competition distortions.
In Uganda, Justice Tibatemwa explained that the Competition Act addresses anti-competitive practices, agreements, abuse of dominant positions, and mergers’ impact on competition, with consumer protection at its core. “The Ministry of Trade oversees the Act’s enforcement, although some experts argue that an independent statutory agency would better ensure impartiality and expertise.”
“A key feature of Uganda’s Act is mandatory pre-merger notification to prevent acquisitions and mergers that harm competition. Corporations often acquire competitors to manipulate the market artificially. To mitigate this, proposed mergers, joint ventures, or acquisitions must be reported to the Ministry of Trade, which may approve, reject, or set conditions,” she said.
By regulating competition, Uganda aims to promote fair business practices, encourage innovation, and protect consumer interests. This aligns with international standards, where competition laws are essential for maintaining a healthy market environment.”
