CFTC gets teeth, as new legislation gets gazetted

The Competition and Fair Trading Commission (CFTC) says it optimistic that there will be sanity on how various players conduct trade in the country following the operationalisation of the Competition and Fair Trading Act (CFTA).

The Commission’s Chief Executive Officer Lloyds Vincent Nkhoma has told journalists in Lilongwe that the development signals an end to some of the enforcement challenges CFTC was facing with regard to the enforcement of the old Act due to the gaps in some of the key provisions in the law.

He said: “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.”

According to CFTC, the major change brought by the new Act is on Suspensory Merger Notification.

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 affected without seeking authorisation from the CFTC.

The new CFTA has made notification of mergers and acquisitions mandatory, based on determined thresholds.

Among several changes, the gazetted Act, which comes into force effective on July 1, 2024, has expanded provisions on anticompetitive business practices in order to regulate and enforce effectively restrictive business practices.

The CFTA of 2024 gives express powers to the CFTC to issue Administrative Orders, which include imposing fines on errant enterprises.

Under the new Act, the fines to be imposed will be up to 5 percent of annual turnover if it is an individual; or up to 10 percent of annual turnover if it is a company.

The new legislation, which replaces the 1998 Act, was passed by Parliament on 5th April, 2024, and was assented to by President Lazarus Chakwera on 19th May 2024.

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