COMPETITION LAW AND SECTORAL REGULATORS

5/6/20081Competition Law & Sector Regulators: By Kanyi

drive to deregulate and liberalize the regulated market has led to attempts at more precise economic definitions of what constitutes a natural monopoly;

Competition was introduced by separating the monopolistic and competitive components.

Based on analyses done on the competitive potential, in Electricity, telecommunications, railway and water.

5/6/2008Competition Law & Sector Regulators: By Kanyi 2

Competition agencies These are macro regulators with a primary

intention to protect consumer interests by prohibiting firms from:

reducing competition through colluding or merging with their rivals,

or seeking to eliminate competitors by means other than offering superior products to consumers.

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Competition Law & Sector Regulators: By Kanyi

Regulators – they generally cover one or a small number of sectors where it is believed that:

public interest would not be adequately advanced by relying on private markets,

Supervision by a competition agency is not adequate therefore;

Relevant institutions must be empowered to directly specify acceptable technologies, marketing methods and/or prices/tariffs charged.

5/6/2008 4Competition Law & Sector Regulators: By Kanyi

Goals/objectives• Both share a concern for economic efficiency.• Their empowering statutes and

administrative practices usually differ. Why Regulatory Reform?• Significant efficiency gains can be realized • lack of information and incentives to

encourage the use of best available technologies

• Sector capture• credible long term policy commitments

required to minimize costs of capital in regulated industries.

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Competition Law & Sector Regulators: By Kanyi

Competition agencies and regulators - compared and contrasted.

o competition law seeks to safeguard the operation of market forces, sectoral regulation serves as a substitute for market forces.

o Competition policy is chiefly ex post while regulation is primarily ex ante and continuous.

o regulators are much more confident that they can alter behavior despite leaving incentives unchanged.

5/6/2008 6Competition Law & Sector Regulators:

By Kanyi

Competition agencies and regulators - compared and contrasted continued….

competition agencies go to court to obtain orders or levy fines, whereas regulators typically combine investigative, prosecutorial and adjudicative functions.

Both require independence from the firms they oversee.

Sector-specific regulation seeks to define jurisdictional boundaries.


KENYA COMPETITION LAW AND SECTORAL REGULATORS

The Act came into force in February 1989. The Act is made up of six main parts. Objective of Kenya’s Competition Law is

to encourage competition in the economy.Sector regulators Whereas the Act is applicable to all

sectors of the economy, there exist other sector regulators in the economy that operate independently.


Sector Regulators in Kenya are created by separate pieces of legislation.

They are relatively independent regulatory agencies compared to MPC.

Cooperation between MPC and Sector Regulators

No harmonization nor synchronization of the responsibilities of the sector regulators viz those of MPC.

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MPC and other sector regulators, have continued to share information.

Quite often, the laws creating sector regulators contain a portion dealing with competition.

Sector regulators, although not obliged, are increasingly consulting with the MPC.

5/6/2008 10Competition Law & Sector Regulators:

By Kanyi

enacting and enforcing laws supportive of competition;

harmonizing competition law with sectoral regulatory laws;

according the Commission requisite autonomy.

according the Commission adequate budgetary resources to enable it to regulate competition in all sectors of the economy.


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COMPETITION LAW AND SECTORAL REGULATORS