The Competition Authority of Kenya (CAK) has issued a stern warning to real estate developers and residential estate managers accused of blocking market access for external Internet Service Providers (ISPs).
This follows internal and external investigations by the CAK, which found that estate developers were signing exclusive contracts with specific ISPs, thereby restricting competing firms from offering alternative services.
According to CAK, this practice is unlawful, limits competition, locks consumers out of the choices they would prefer, and lessens competition in the services in the country.
"It is unlawful for undertakings to limit or control market access, technical development, or investments. Section 21(3)(f) of the Act prohibits undertakings from applying dissimilar conditions to equivalent transactions with trading parties, placing them at a competitive disadvantage," the statement reads in part.
The crackdown on these estates follows a surge in complaints from residents who accused them of blocking access to alternative ISPs, thereby subjecting them to expensive Wi-Fi services tied to contracts signed by estate managers.
The Authority terms this behaviour as anti-competitive and a direct violation of the Competition Act, CAP 504, Laws of Kenya.
In an official statement, the CAK warned that developers, estate managers, and ISPs found guilty of engaging in such restrictive agreements could face financial penalties of up to Ksh10 million, criminal prosecution, or both.
In severe cases, companies may also be fined up to 10 per cent of their previous year’s gross turnover.
"Undertakings that infringe the Act risk being penalised up to 10 per cent of their preceding year's gross annual turnover in Kenya. For criminal prosecutions, they face fines of up to Ksh10 Million and imprisonment for a maximum of five years, or both," the statement continued.
The CAK has ordered property developers, real estate managers, and ISPs engaging in exclusive internet service provision agreements that are anti-competitive to immediately cease such practices and prevent their recurrence.
They have also been advised to facilitate the entry of competing ISPs into their developments.
Kenyans have been encouraged to report any developers who fail to comply with these directives to the relevant authorities, including the CAK.
Over the years, especially following the effects of COVID-19, the ISP market in Kenya has grown rapidly due to the rise in remote working, e-commerce, and streaming platforms. If estate developers are not checked against monopolising the service, other internet providers may suffer as a result.
