The Commission launched investigation on its own volition following the information it came across alleging that Insurance Association of Malawi engaged in setting of premium rates and recommending the same to its members contrary to Section 32(1) and Section 34(1) of the Competition and Fair Trading Act. The investigation was informed that the association’s conduct followed advice from Registrar of Financial Institutions who was concerned that some Insurance companies were pricing below cost and this led to the companies facing liquidity problems among others.
On 10th June, 2013, The Competition and Fair Trading Commission (CFTC) ordered Airtel Malawi and Telekom Networks Malawi Limited (TNM) to notify the Distribution Arrangement the companies had with their respective distributors
In particular, the Commission through its investigations came across information that Airtel Malawi and TNM had appointed exclusive distributors for airtime and other products and services offered by the companies. The distributors were demarcated into zones in which they had to operate exclusively. The concern of the Commission was that the appointment of distributors for specific geographical zones was restraining competition in the distribution of airtime and other products and services in the designated zones.
The arrangement contravened provisions of the Act, specifically, Section 32(2), which refrains businesses from, among other things, imposing restrictions on arrangements for distribution of goods and services as well as on resale price maintenance. The Commission was mindful that the practice was not an outright violation of the Act, however, the companies were supposed to justify the agreements and seek authorisation of the Commission according to section 44 of the Competition and Fair Trading Act.
Following submission of the notification by both Airtel Malawi and TNM, the Commission examined the Arrangements and established that the dealing arrangements had advantages which outweighed the disadvantages.
The Commission authorised the arrangements that both companies had with their respective appointed distributors subject to amendment of provisions relating to imposition of restrictions on distribution of products for competing networks. Following the authorisation, TNM complied, but Airtel sought to challenge the decision of the Commission in a court of law.
The Commission ordered Independent Schools Association of Malawi to cease and desist from engaging in anti-competitive business practices. This followed investigations that the Commission launched on its own volition.
The investigations confirmed that ISAMA had been engaging in prohibited price fixing by setting fees in order to reduce competition among members. Apart from setting the fees, the Association was also involved in developing a code of conduct aimed at regulating the conduct of members with regard to where to open schools, who to admit as students and who to recruit as teachers.
On 12th September, 2012, the Competition and Fair Trading Commission received a complaint from Credit Data Limited which runs a Credit Reference Bureau (CRB) against the Bankers Association of Malawi (BAM). The complaint alleged that the association had instructed its members not to deal with any other credit reference bureau other than CRB Africa Ltd through non provision of account holders’ data to Credit Data Limited, information which is vital for operation of credit referencing business.
Following investigations, the Commission established that CRB Africa, as the first entrant in the market, had initial agreement with BAM, an arrangement that was dictated by the situation surrounding its entry in Malawi. The Commission however, did not establish any evidence that showed that BAM instructed its members not to deal with any other credit reference bureau.
However, the Commission found that the identification of CRB Africa and the Agreement had the effect of lessening competition in the provision of credit reference services. The Agreement also denied the Complainant an opportunity to develop necessary infrastructure (database) to participate in credit referencing business and created an artificial monopolistic environment.
The Commission determined that, while the conduct by members of BAM created an anti-competitive business environment in credit referencing, the absence of appropriate enabling legislative decree to safeguard credit data holders from liability for breach of confidentiality rights of customers was a major stumbling block to creation of a competitive business environment for credit referencing in Malawi.