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MPs Reject Safaricom’s Proposal To Make Secret Business Deals

Safaricom House. / COURTESY

The National Assembly’s Committee on Finance and National Planning has rejected Safaricom’s petition to do repeal a legal clause that requires companies to make business reports to the Competition Authority of Kenya (CAK).

Companies are required by CAK, pursuant to the guidelines, to share information in their reports such as terms of payments, pricing of goods and services, interest payable as well as conditions of contract termination or variation.

However, Safaricom unsuccessfully argued that sharing such information would amount to interference.

“Defining how parties should contract and the terms they should include in their contracts would constitute interference in the freedom of contract which is protected by law. Such provisions increase the risk of a buyer being accused of abusing buyer power due to unjustified complaints simply because they attempt to negotiate competitive terms with suppliers,” argued Safaricom in its petition.

Read: CMA Chairman James Ndegwa Accused of Conflict of Interest in Market Regulation

On the other side, the MPs felt that the clause should not be removed, since it is used to assess whether a company is abusing buyer power

“The proposal was rejected because the provision is a template that will be used to assess whether a company is abusing buyer power. It will also encourage companies to pay suppliers on time,’’ said the committee chaired by Kipkelion East MP Joseph Limo.

According to the latest data from the Communications Authority of Kenya (CA), Safaricom has the highest number of subscribers at 31.8 million. It is followed by Airtel which has 12.8 million subscribers .

Safaricom also leads in the voice calls and SMS traffic, and its dominant mobile money platform M-Pesa is by far the leading mobile transfer service in the country.

Safaricom has severally ben accused of being dominant because it accounts for 90 percent of revenues in areas such as voice calls and text messages.

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Written by Francis Muli

Follow me on Twitter @francismuli_. Email

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