CompetitionCO3BImpose penalties on operators whose practices against free competition are not reversable

In case of a severe breach of competition, or of regulation rules or other legislative acts by competing operators, and when the consequences of such anti-competitive acts are not reversable, regulators impose sanctions as a last resort.

These must be clearly predefined and transparently outlined for operators following licence conditions and criteria. Regulators can deregister licenced operators if they do not comply with remedial measures proposed to restore competition.

Alternatively, regulators may impose higher fines to reimburse costs resulting from the damage caused, and which could eventually remove operators from the market due to bankruptcy. These measures are usually implemented with judiciary assistance and support.

Expected outcomes

  • Operators in breach of regulation and competition rules are removed from the market.
  • Consumers are protected from anti-competitive behaviour.
  • Only well-performing operators remain in the market.
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Objective: There are sanction systems for operators for anti-competitive acts that affect consumers
Area:
Competition
Cost:
Medium
Frequency:
One time
Target group:
Regulators, Service operators, Administrative courts
Region:
Eastern Africa
Date:
Nov 01, 2022
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Example

In Tanzania, following the 2013 Guidelines for the Regulation of Water Tankers, the Energy and Water Utilities Regulatory Authority (EWURA) can deregister a water tanker operator for any of the following conditions.

  1. Using a tanker to conduct an activity other than that it was registered for.
  2. Providing false or inaccurate information related to the operation of a water tanker.
  3. Drawing water from a non-designated filling point.
  4. Selling water at a price which is above the approved cap price.
  5. Ceasing to carry out water supply business.
  6. Failing to carry out its obligations under these guidelines.

Internal capacities needed and the role of partners

A range of legal and administrative skills is necessary to complete this action, that obliges regulators to build their internal capacity through training, often seeking support from anti-monopoly institutions and development partners.

Competition and judiciary authorities could also extend their expertise by defining and imposing sanctions. Development partners could build upon this through training. Regulators’ staff must be trained on the available scale of sanctions, how to impose them on operators, and what protocols to follow in these circumstances.