Leniency Program Guidelines - Competition Authority of Kenya
15th Aug 2017 |  Technology, Media and Telecommunications  

The Competition Authority of Kenya has operationalized section 89A of the Competition Act by gazetting the Leniency Program Guidelines (LPG) on 19th May, 2017. From the The Competition Authority of Kenya Newsletter, Issue No. 2, July 2017

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The guidelines set out the privileges that govern the granting of partial or full immunity to undertakings that have been engaging in cartel conduct and who provide direct and relevant evidence and proactively cooperate in the successful enforcement action.

In the new guidelines, an undertaking that voluntarily discloses the existence of an agreement or practice that is prohibited and cooperates with the Authority in the investigation of the agreement or practice, may not be subjected to all or part of a financial penalties that could otherwise be imposed under the law.

Section 36 of the Competition Act has been amended to provide the Authority with statutory powers to impose financial penalty of up to ten (10) percent of the preceding year’s turnover of undertakings found to have engaged in cartel activities.

The salient eligibility criteria for the LPG are: `

  1. An undertaking or a division of an undertaking would be eligible for leniency only through the legal entity of which it forms part and which controls its decision-making process;
  2. A leniency agreement will cover the applicant’s directors and employees as long as they respect the obligation to cooperate with the Authority;
  3. The leniency applicant has not coerced others or instigated others to operationalize the agreement.
  4. If a subsidiary applies, it would be eligible for leniency in relation to its participation in prohibited conduct but not in relation to its parent’s participation in the prohibited conduct (as the parent undertaking is not under the control of the subsidiary);
  5. A parent undertaking of a subsidiary would be eligible as well as its subsidiary;
  6. Leniency can only be granted to one of the legal entities involved in a joint venture. However, a joint venture constituted as a separate legal entity under the joint control of two parent companies is eligible for leniency.
  7. The involvement of the joint venture in a prohibited conduct is not covered by one of the parent’s application because control over the joint venture does not rest solely with the parent applicant.

 

A successful leniency applicant that is ‘first through the door’ shall be granted 100% reduction of the penalties, the applicant who is ‘second through the door’ may be granted up to 50% reduction of penalties and the ‘third through the door’ gets 30% penalty reduction.

We look forward to seeing how the guidelines are implemented by the Authority as more awareness is created on matters concerning competition and consumer protection.

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