The
Board of Commissioners (hereinafter referred to as ''The Commission") of the
Competition and Fair Trading Commission held its 47th Meeting in
Lilongwe on 3rd February 2017 to consider and adjudicate over cases
relating to unfair trading practices, anti-competitive business conducts and
mergers. These cases were brought before the Commission in accordance with
Section 8 of the Competition and Fair Trading Act.
In
total, the Commission considered and adjudicated over a total of twenty-seven
(27) cases. This statement provides a summary of the Commission's
determinations of the cases.
For
more information, contact Mr Lewis Kulisewa on 0999960235 or email
lewis.kulisewa@cftc.mw
CHARLOTTE WEZI MALONDA
EXECUTIVE DIRECTOR
SUMMARY OF THE COMMISSION’S
DETERMINATIONS OF THE CASES
ALLEGED
SUPPLY OF PRODUCT WHICH IS LIKELY TO CAUSE PHYSICAL HARM TO CONSUMERS BY SPICE
EMPORIUM SHOP
The
Commission ordered Spice Emporium Shop in Limbe to pay a fine of five hundred thousand Kwacha (MK500,000-00) for deliberately supplying
products likely to cause injury to health and failing to comply with consumer protection
statutes.
Investigations
carried out by the Commission established that Spice Emporium Shop were deliberately supplying expired products which
were likely to cause injury to health or physical harm to consumers. The expired products included non-carbonated soft
drinks and spices such as Everest Bar Bhaji Masala, Everest Royal Garam Masala
and Everest Pani Puri Masala. This was contrary to Section 43(1)(e)
of the Competition and Fair Trading Act which states that:
"Á person shall, not in relation to a consumer, supply
products which are likely to cause injury to health or physical harm to
consumers, when properly used, or which do not comply with a consumer safety
standards which has been prescribed under any written law”
Further, Spice Emporium refused to
comply with instructions from the Commission's inspectors to remove the expired
products from the shelf, thereby subjecting unsuspecting consumers to increased
harm.
By refusing to comply with consumer
protection authorities set by Government, Spice Emporium violated Section 6(1)(d) of the Consumer Protection Act
which obliges business enterprises to cooperate with Government authorities in
the execution of policies relating to consumer protection.
ALLEGED EXCLUDING LIABILITY
BY BEFOWARD COMPANY LIMITED
The
Commission ordered Be Forward Company Ltd to exchange the non-runner motor vehicle
it supplied to Mr Daniel Likugwe with a motor vehicle in good running
condition.
Investigations
conducted by the Commission showed that, in 2013, Be Forward Company Ltd
supplied a non-runner second hand motor vehicle to Mr Daniel Likugwe, contrary
to indications at the time of purchase, that it was in perfect running
condition. The vehicle, which was purchased at US$3,200 was delivered without
an Engine Control Unit (ECU). This was clear-cut misrepresentation which
resulted in the consumer suffering substantial consumer harm and a blatant
violation of Section 43(1)(b) of the Competition and Fair Trading Act which
provides that:
"Á person shall, not in relation to a consumer, engage
in conduct that is likely to mislead the public as to the nature, price,
availability, characteristics, suitability for a given purpose, quantity or
quality of any products or service".
Further,
by excluding liability on a defective motor vehicle, the company breached
Section 43(1)(b) of the Competition and Fair Trading Act which states that:
"Á person shall, not in relation to a consumer,
exclude liability for defective products".
The
Commission further ordered Be Forward Company Ltd to refund all the related
expenses incurred by the Complainant in trying to fix the problem.
ASSESSMENT OF THE IMPACT OF THE TAKEOVER OF METROPOLITAN
HEALTH LIMITED BY MEDHEALTH LIMITED
The
Commission has authorized the proposed takeover of Metropolitan Health Ltd by
MedHealth Ltd.
This follows an application for the authorization of the proposed
takeover of 100% shareholding in Metropolitan Health Limited by a local company
MedHealth Ltd.
Analysis of the information gathered by the Commission
shows that the proposed takeover will simply result in change of ownership of
the company without changing the market structure or any other competition
factors. Further, the proposed transaction will ensure that the business of
Metropolitan Health continues to exist in Malawi, hence sustaining and
maintaining same levels of competition on the market.
Accordingly,
it was unlikely that the transaction will result in substantial lessening of
competition in Malawi.
ALLEGED RESTRICTIVE BUSINESS
PRACTICE BY TELEKOM NETWORKS MALAWI LIMITED IN THE SPONSORSHIP OF FOOTBALL
The Commission has ordered Telekom Networks Malawi
Ltd (TNM) and Super League of Malawi (SULOM)to follow
international best practices in its sponsorship arrangement for the Super
League football tournament.
Investigations conducted by the Commission showed that
the sponsorship agreement between the Super League of Malawi (SULOM) and
Telekom Networks Malawi (TNM) contained clauses which had the effect of
restricting competition in as far as advertising and football
sponsorship was concerned.
After a thorough analysis of the information gathered
during investigations, the Commission concluded that, while the Sponsorship
Agreement foreclosed football sponsorship as an advertisement platform for TNM
competitors, its effect would not likely result in substantial lessening of
competition in the telecommunication market. However, the sponsorship agreement
was found likely to have negative effect on the development of football in
Malawi.
Accordingly, in the event that
the two parties agree to renew the sponsorship at the end of the current
contract, the Commission ordered that the proposed agreement should be
submitted to the Competition and Fair Trading Commission for assessment of
compliance with the Competition and Fair Trading Act.
Further, the Commission ordered the
Sports Council of Malawi to consider developing guidelines for sports
sponsorship, particularly, football taking into consideration best practices
from other jurisdictions to prevent sponsors from taking advantage of the weak
bargaining power of sponsorship recipient.
Charlotte
Wezi Malonda
EXECUTIVE DIRECTOR