President Yoweri Museveni has assented to the Competition Act, 2023 whose objective is to promote and sustain fair competition in Uganda markets. Markets in Uganda include Telecommunications, Agriculture, Banking and Financial Services, Mining and Natural Resources, Tourism, Transportation, Healthcare, and Consumer Goods.
The Act prohibits anti-competitive practices and agreements, abuse of dominant positions within a specific market, and provides for a procedure for mergers, acquisitions, and joint ventures in business.
Anti-competitive practices and agreements
Section 9 prohibits anti-competitive practices and renders agreements, decisions, concerted action or practice void and illegal;
Horizontal agreements (between competing manufacturers or distributors) that directly or indirectly fix purchase or selling prices; limit or control production, supply, markets, technical development, or investment; share markets or sources of production supply by territory type, size of customer or in any other way; or directly or indirectly result in bid-rigging or collusive tendering are void and illegal.
Vertical agreements (between firms/manufacturers at different levels of the supply chain) that involve tying arrangements, exclusive supply agreements, exclusive distribution agreements, refusal to deal, or resale price maintenance are also void under the Act.
Abuse of dominant position or monopoly status
Section 11 of the Act prohibits abuse of dominant position or monopoly status in a relevant market. Such abuse includes directly or indirectly imposing unfair or discriminatory purchase or selling prices or conditions; limiting production, markets, or technical development to the prejudice of consumers; indulging in actions resulting in denial of market access; making the conclusion of contracts subject to acceptance by other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of those contracts; or using dominance in one market to move into or protect another market.
Exploitation of consumers by dominant persons.
Section 12 prohibits persons holding dominant positions in the relevant markets from directly or indirectly imposing unfairly high or unfairly low purchasing prices or other similar unfair trading conditions; limiting production or technical development and innovation to the prejudice of consumers; or discriminating between consumers or suppliers based on non-commercial criteria, including nationality or place of residence.
Exclusion of competitors by dominant persons
Section 13 prohibits dominant persons in a relevant market from practices that exclude other competitors such as predatory pricing, price squeezing, cross-subsidisation, cross-subsidisation; refusal to deal; refusal of access to an essential facility; tying-arrangements; and unjustifiable discrimination among customers or suppliers with the objective of excluding competitors from the market.
Procedure for Mergers, Acquisition, and Joint Ventures.
After the Board of directors or a similar body of respective persons has accepted the proposal to merge or amalgamate or concluded negotiations of an agreement of acquisition of control or executed a joint venture agreement, notice has to be given to the Minister responsible for Trade to determine whether it causes or is likely to cause an adverse effect on competition within the market and the Minister shall either approve or reject the Merger, Acquisition or Joint venture.`
Conclusion:
Enforcement and compliance with this new law will promote efficiency, adaptability, and development of the Ugandan economy. Not only will it provide for competitive prices and product choices but provide opportunities for the participation of Ugandans in the world market and guarantee that all persons have an equitable opportunity to participate in the economy.
Authored by SC Pheona Nabasa Wall and Isabella Pedun