The Competition Authority of Kenya (CAK) emerged as an increasingly important - and increasingly assertive - regulator of the technology sector, scrutinising market dominance, merger activity, and anti-competitive practices in an ecosystem where a few platforms wielded outsized power over critical infrastructure.
The CAK's most significant technology-related interventions centred on Safaricom and its dominant position in mobile money through M-Pesa. By 2020, M-Pesa processed over KSh 20 trillion annually - roughly half of Kenya's GDP flowing through a single private platform. Competitors like Airtel Money held single-digit market shares. The question of whether Safaricom's dominance constituted an abuse of market position - and whether M-Pesa's infrastructure should be regulated as a public utility - was one of the most consequential competition questions in Kenyan business.
The CAK investigated Safaricom's practices multiple times. Concerns included Safaricom's control over USSD channels (which competitors needed to access mobile subscribers), the bundling of M-Pesa with other Safaricom services, and the terms under which third-party fintech companies could integrate with M-Pesa's API. Fintech startups like Pesapal, Kopokopo, and iPay Kenya depended on M-Pesa for payment processing but operated at the mercy of Safaricom's commercial terms - API access could be modified, fees could change, and integration approvals could be delayed in ways that affected the viability of competing platforms.
The Competition Act of 2010, under which the CAK operated, provided tools to address abuse of dominance, but enforcing them against Kenya's largest company and largest taxpayer required political will that was not always forthcoming. Safaricom employed thousands, contributed billions in taxes, and was partly government-owned through the Treasury's stake - creating conflicts of interest that complicated regulatory action.
The CAK also reviewed mergers and acquisitions in the technology sector, including Uber's market entry, Bolt's expansion, and various investments by international companies in Kenyan startups. These reviews occasionally imposed conditions - requiring continued service in underserved areas or limiting data-sharing between merging entities - but rarely blocked transactions outright.
The platform economy raised competition questions that the CAK's traditional toolkit was not designed to address. Ride-hailing platforms like Uber Kenya and Bolt Kenya operated as intermediaries between drivers and passengers, setting prices algorithmically in ways that could constitute price-fixing if done by traditional competitors. E-commerce platforms that operated both as marketplace hosts and as sellers of their own products faced conflicts of interest that competition law addressed imperfectly. And the data advantages enjoyed by dominant platforms - where more users generated more data, which improved algorithms, which attracted more users - created self-reinforcing market positions that traditional antitrust analysis struggled to evaluate.
Kenya's approach to tech competition regulation was evolving but remained behind the frontier set by the European Union's Digital Markets Act and similar legislation in India and Australia. The CAK's 2022 Digital Markets Study acknowledged these challenges and proposed guidelines for regulating digital platforms, but translating guidelines into enforceable rules required legislative updates and institutional capacity that were works in progress.
See Also
Sources
- Competition Authority of Kenya. "Digital Markets Study: Preliminary Report." CAK, 2022.
- Mureithi, Muriuki. "Competition and the Digital Economy in Kenya." African Journal of Information and Communication, 2021.
- Ndemo, Bitange, and Tim Weiss. "Digital Kenya: An Entrepreneurial Revolution in the Making." Palgrave Macmillan, 2017.
- Kene-Okafor, Tage. "Kenya's Competition Authority Takes Aim at Big Tech." TechCrunch, 2022.