New CFTA enters into force today: Commission now to order administrative fines
The Competition and Fair Trading Commission CFTC says the new Competition and Fair Trading Act—the law that protects consumers and ensures competition—has entered into force today, after successful gazetting last week.
Speaking during a press briefing in Lilongwe today, CFTC Chief Executive Officer, Vincent Lloyds Nkhoma said the Commission is extremely pleased with this development as it signals an end to some of the enforcement challenges the institution was facing with regard to the old Act.
“We were experiencing challenges in enforcing the old Act due to the gaps in some of the key provisions in the law. In addition, the CFTA needed to be aligned with the recent developments in the enforcement of competition and consumer protection law, reflective of the current market dynamics in the economy. Furthermore, the CFTA required to be aligned with international best practices in the enforcement of competition and consumer protection,” said Nkhoma.
Highlighting the key changes that have been made, Nkhoma said under the 1998 CFTA, when the Commission found a business enterprise in breach, it had been imposing fines, which were provided for under Section 51. However, in 2023, in the matter of CFTC v Airtel Malawi Plc, the Court ruled that the said provision does not empower the CFTC to impose fines, on the grounds that the violations were designated as being criminal in nature. He added that in the new Act, there is a provision for administrative fines, which the Commission will be able to impose.
Nkhoma also said, the 1998 CFTA provided for voluntary notification of mergers and acquisitions; which meant that mergers having potential harm to competition process and consumer welfare could be effected without seeking authorisation from the CFTC. The new CFTA has made notification of mergers and acquisitions mandatory, based on determined thresholds.
He further highlighted that old CFTA narrowly defined the term “Consumer” leaving out some stakeholders that are equally affected by unfair trading practices. These he said include consumers of technology, consumers of digital products, beneficiary consumers, but also other users of goods or services for purposes of production of other goods or services.
Nkhoma said the 1998 CFTA focused on abuse of supplier power and not the abuse that may arise from powerful or dominant buyers such as buyers of agricultural produce for example tobacco.
According to Nkhoma, the new Act has also introduced that Commissioners who adjudicate over cases be required to sufficiently scrutinized for their qualification and suitability for their functions, but also guarantee utmost independence by the Public Appointment Committee of Parliament.
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