This amendment has addressed critical aspects of the fair competition law in Tanzania as follows:
Introduction of the Leniency Programme
The change in the law has introduced the leniency programme whereby the Commission may reduce or remove penalties or fines to a person who engages in price fixing agreements between competitors, a collective boycott by competitors, or collusive bidding or tendering. Such leniency however shall be accorded where such persons voluntarily discloses the existence of the prohibited agreements and cooperates with the Commission in the investigation of the prohibited uncompetitive practice
Abuse of Dominant Position in the Market
This amendment has introduced a new definition of what amounts to “abuse of dominance position”. This includes;
- Directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;
- Limiting or restricting production, market outlets or market access, innovation, investment, distribution, technical development or technological progress to the prejudice of consumers;
- Predatory pricing;
- Margin squeeze;
- Cross subsidization.
Prohibition Of Vertical Agreements
The new amendments have prohibited agreements with the following elements.
- Re-sale prices or conditions maintenance;
- Foreclosing customers or competitors from access to sources of supply or from access to outlets;
- Restricting movement of goods or services between different geographical areas.
The new amendments have prohibited agreements with the following elements.
- the supplier or producer makes it clear to the re-seller that the recommendation is not binding; and
- the product has a price stated on it and the words “recommended price” appear next to the stated price.
Any person who contravenes any of these elements commits an offence.
Dominant Mergers for Public Benefit
Previously the law discouraged the approval of a merger that could result to the lessening of competition in the market. However, this amendment now provides for an exception to such mergers whereby the condition should be that such merger can benefit the public in the following areas;
- greater efficiency in the allocation of resources;
- promoting technical or economic progress and the transfer of skills, or otherwise improve the production or distribution of goods or the provision of services in Mainland Tanzania;
- the extent to which, the target firm faces actual or imminent financial failure and the proposed merger offers the least anti-competitive alternative use of the assets of the business;
- boosting exports from Mainland Tanzania or employment in Mainland Tanzania;
- the effect of such merger to a particular industrial sector or region;
- the effect of such merger on the ability of national industries to compete in regional and international markets; and
- the proposed merger’s effect on the ability of small businesses to become competitive.
Fines/Penalties
The law previously provided that a fine of not less than five percent (5%) of the entity’s annual turnover and not exceeding ten percent (10%) of the offender’s annual turnover shall be imposed to a person or entity which commits an offence against the law. With this amendment, the Commission may impose the following new fines against a person who commits an offence under implied conditions in consumer contracts and manufacturer’s obligations:
- in case of a body corporate, a fine of not less than thirty million shillings but not exceeding fifty million shillings or 3% of his annual turnover in the preceding year, whichever is greater;
- and in case of a natural person, a fine of not less than ten million shillings but not exceeding thirty million shillings or 1.5% of his annual turnover in the preceding year, whichever is greater.
Decision of the Tribunal
Previously the law instructed that the Judgement or order of the tribunal on any matter was final as it discharged functions at the high court. With this amendment, now a person who is aggrieved or offended by the decision of the Tribunal under this section may, within thirty (30) days from the date of the decision, appeal to the Court of Appeal.