Restrictive Business Practices

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What are the most common examples of conducts that are prohibited per se under the Competition and Fair Trading Act?

Agreements to fix, directly or indirectly, a purchase or selling price or any other trading conditions; share market or sources of supply; limit or control production, market outlets or market access, technical or technological development or investment; or perform an act of bid rigging.

What are the conducts which could be defined as abuse of a dominant position?

Among others, when a enterprise, whether independently or collectively, directly or indirectly imposes unfair purchase or selling prices or other unfair trading terms on any supplier or customer, limits or controls production, market outlets or market access, technical or technological development or investment to the prejudice of consumers. Abuse may also include refusing to supply to a particular enterprise or group, applying different conditions to equivalent transaction with other trading parties and predatory behaviour towards competitors.

Which anticompetitive trade practices are prohibited under Competition and Fair Trading Act (CFTA)?

Any category of agreements, decisions and concerted practices which are likely to result in the prevention, restriction or distortion of competition to an appreciable extent in Malawi or in any substantial part of it are declared anti-competitive trade practices and are hereby prohibited.

What are the anticompetitive trade practices that are prohibited under CFTA?

The anticompetitive trade practices prohibited under CFTA include the following:

  • Predatory conduct
  • Discriminatory conduct
  • Exclusive dealing arrangements
  • Tying and bundling
    • Resale price maintenance

Trade agreements fixing prices

Which anticompetitive trade practices are prohibited per se under CFTA?

All cartels or collusive conducts are prohibited per se.

Which collusive conducts or cartels are prohibited under CFTA?

  • Colluding in the case of monopolies of two or more manufacturers, wholesalers, retailers, contractors or suppliers of services, in settling uniform price in order to eliminate competition;
  • Collusive tendering and bid-rigging;
  • Market or customer allocation agreements;
  • Allocation by quota as to sales and production;
  • Collective action to enforce arrangements;
  • Concerted refusals to supply goods or services to potential purchasers; or
  • Collective denials of access to an arrangement or association which is crucial to competition.

Which anticompetitive trade practices by trade associations are prohibited under CFTA?

  • The following practices conducted by or on behalf of a trade association are declared to be anti-competitive trade practices and are prohibited:
    • unjustifiable exclusion from a trade association of any person carrying on or intending to carry on in good faith the trade in relation to which the association is formed; or
    • making of recommendations, directly or indirectly, by a trade association, to its members or to any class of its members which relate to—
      • the prices charged or to be charged by such members or any such class of members or to the margins included or to be included in the prices or to the pricing formula used or to be used in the calculation of those prices; or
      • the terms of sale (including discount; credit, delivery, and product and service guarantee terms) of such member or any class of members and which directly affects prices or profit margins included in the pricing formula.

Are there any allowable anticompetitive trade practices under the CFTA, and on what conditions if any?

The Commission may authorize any act, agreement or understanding which is not prohibited outright by this Act, that is, one which is not necessarily illegal unless abused if that act, agreement or understanding is consistent with the objectives of this Act and the Commission considers that, on balance, the advantage to Malawi outweigh the disadvantages.

How do I apply for the allowable acts?

You apply for allowable acts by filling and submitting designated forms.

Is there a fee for application for an allowable act?

The application fee for an allowable act is Seven Hundred Thousand Kwacha (MK700,000.00) subject to revision from time to time by the Commission.

Are there exceptions to the allowable acts?

The Commission shall not authorize cartels [Section 33(3) of CFTA] and abuse of dominance [Section 41(1) of CFTA].

What is the role of the Commission on enterprises with dominant position on the market?

The Commission monitors dominant enterprises to ensure that they do not abuse their dominant position as provided for under Section 41 of the CFTA.

Does the Commission act on anticompetitive trade conducts by government or its enterprises?

The Commission acts on all anticompetitive conducts including those by the government or its enterprises in accordance with Section 54 of CFTA, which states that: This Act shall apply to and bind the Government.”