This blog is written by Daniellah Akampwera, a Second-year law student of Islamic University In Uganda, Kampala Campus

INTRODUCTION

Competition law, often referred to as antitrust law, plays a crucial role in safeguarding consumers by preventing unfair or anti-competitive practices by companies or individuals in the market. These laws are designed to foster a fair business environment, where competition thrives, and consumers benefit from better choices, prices, and quality. These anti-competitive practices include; price fixing, Bid rigging, division of markets, mergers and acquisitions, cartels, monopoly, and so on.

THE ORIGIN OF ANTITRUST LAWS.

The roots of antitrust laws trace back to the United States in the late 1800s. These were aimed at curbing the power of the huge monopolies called trusts; oil trust, sugar trust, and gunpowder trust which charged high prices and ran competitors out of business hence the establishment of the Sherman Act (1890), the Clayton Act (1914), Robinson-pitman Act (1936), state Antitrust laws and so on.

COMPETITION LAW IN AFRICA.

Many countries in Africa have adopted competition laws to promote fair competition in the market, for example, Tanzania, Kenya, Tunisia, Zambia, Zimbabwe, Uganda, and many others. Some countries like Burundi and Rwanda have the law in place but no institutions in place to enforce it. This highlights the varying degrees of progress across the continent in implementing and enforcing these laws.

For instance, the United States focuses more on the consumer’s welfare, that is to say, that the lower the prices, the greater the output for consumers other countries like Uganda also notice the impact on competitors which can be inconsistent with the focus on consumers as competitors like prices high whereas consumers want prices down.

COMPETITION LAW IN UGANDA: THE UGANDA COMPETITION LAW ACT, 2024

This act was introduced to curb anti-competitive practices, agreements that limit competition, abuse of a dominant position, and the potential negative effects of mergers, acquisitions, and joint ventures on market competition. Like similar competition laws worldwide, its main goal is to promote healthy competition within Uganda's economy.

Beyond just keeping the market fair, it also seeks to create more employment opportunities for Ugandans and support the overall growth of the country's economy. Additionally, this law encourages greater innovation, which ultimately benefits consumers by offering them better choices and improved services.

Section 4 gives the Ministry for Trade the responsibility of monitoring, investigating, and protecting the objectives of the act.

Section 9 prohibits anti-competitive practices and agreements, specifically targeting both horizontal and vertical agreements. Horizontal agreements occur between parties operating at the same level in the market, such as competitors. These agreements are often prohibited as they can contain clauses that restrict competition.

In contrast, vertical agreements involve parties operating at different levels of the market, such as between a manufacturer and a distributor. These agreements receive more lenient treatment compared to horizontal agreements because they are less likely to restrict competition.

Section 11 discourages companies or persons holding a dominant position in a specific market from practices that exclude or intend to exclude competitors from the market, especially through price fixing, and unjustifiable discrimination among consumers and suppliers.

For instance, cartels between two dominant competitors may harm consumers, businesses, and the economy by increasing prices, reducing choice, and distorting innovation. This is because cartels achieve greater profits for less effort to the detriment of consumers and the economy as a whole. However, cartels are likely to be successful oligopolistic markets having a small number of producers and sellers.

HOW CAN COMPANIES AVOID ANTITRUST PROBLEMS?

· By issue spotting. They can try it understand what issues would warrant a call to the Antitrust counsel

· By contacting in-house or outside experts for consultation.

· Having complained programs.

· Leniency application or self-reporting.

CONCLUSION.

Competition law in Uganda is indeed a crucial step toward enhancing market efficiency, encouraging investment, and fostering economic development. While its implementation is still limited in various sectors, it reflects the government's commitment to improvement.

To ensure broader understanding and effective enforcement, the government should consider organizing training workshops to sensitize people about competition laws. These workshops can help businesses, consumers, and stakeholders recognize the importance of fair competition and how it benefits the economy as a whole.

REFERENCES

1. https://www.mmaks.co.ug/articles/2024/03/12/analysis-new-competition-act-2023

2. https://www.techtarget.com/whatis/definition/competition-law

3. The Uganda Competition Act,2024

4. Office of Fair Trading, A Quick Guide to Competition and Consumer Protection Laws that Affect Your Business,2007

5. Introduction to the Botswans Africa competition law guide 2019, https://bowmanslaw.com/wp-content/uploads/2016/12/Competition-Law-in-Africa-Guide.pdf