GPR 415 CONSUMER PROTECTION LAW

UNIVERSITY OF NAIROBI

GROUP 5

ASSIGNMENT
THE EFFECT OF REGIONAL INTEGRATION AND INTERNATIONAL LAW ON
CONSUMER PROTECTION BETWEEN PARTIES IN DIFFERENT STATES

A. EAST AFRICAN COMMUNITY RULES

November 2022

1
EAC Competition Act 2006, s 13
INTRODUCTION
In ensuring consumer protection between parties and in different states, initiatives have been

made both at regional and international levels in achieving and promoting the efforts of

formulating, regulating and implementing an efficient and effective consumer protection

framework through various forms of legal regulatory mechanisms and regional integration.

INTERNATIONAL CONSUMER PROTECTION LAW IN INSTITUTIONAL

MECHANISMS.

Consumer protection in international law is operationalised through institutional means, outlined

by the Guidelines on Consumer Protection: Agency Structure and Effectiveness, which involve

consumer protection agencies. However, states play a role in ensuring that the functionality of

consumer protection is practical without risking the freedom of businesses and consumers to

operate and exercise choice respectively is threatened.

The consumer protection framework is well-guided with elements which is a national consumer

policy that sets out the approach of the State towards consumer protection withstanding the

consumers’ rights to the appropriate organs and a designated consumer protection agency

responsible for the development and application of consumer protection which collaborates and

ministers its aim through consultations with stakeholders.

UNITED NATIONS GUIDELINES FOR CONSUMER PROTECTION(UNGCP)

2
EAC Competition Act 2006, s 13
The United Nations Guidelines for Consume Protection provide a unilaterally agreed set of

principles that are inscribed by the United Nations General Assembly on consumer protection

which then incorporates itself with institutions such as those under Sustainable Development

Goals and others under Guidelines issues under OCED for e-commerce and the G20(through the

OCED for consumer protection in financial services1.

In terms of consumer protection agencies, the UNGCP are open for recommendations under

Guideline 8 in which Member States should adequately provide infrastructure for the

development, implementation and monitoring of consumer protection policies with goals set out

under Guideline 14 under which the consumer protection policies are to be aimed towards.

Guideline 15 calls for members to work towards ensuring consumer protection enforcement

agencies have the necessary resources either human or financial to promote effective compliance

and facilitation of redress for consumers in appropriate cases2.

Section VI sets out improved cooperation of agencies without general commitment on how such

agencies structures such relevant agencies in the respective states through national policies and

their makers. It also involves objectives, scope, general principles, principles for good business

practices, guidelines, international cooperation and international institutional machinery.

Section V also sets out the embodiment of the objectives of UNGCP which includes national

policies on consumer protection, physical safety, promotion and protection of the economic

interest of consumers, standards for safety and quality of consumer goods and services,

1
OCED,October 2011,G20 high-level principles on financial consumer protection; OCED,2016, Consumer Protection
in e-commerce: OCED recommendations, (Paris).
2
‘United Nations Guidelines for Consumer Protection’ (UNCTAD)
<https://unctad.org/topic/competition-and-consumer-protection/un-guidelines-for-consumer-protection>
accessed 21 November 2022.

3
EAC Competition Act 2006, s 13
distribution facilities for essential consumer goods and services, dispute resolution and redress,

educational and information programs, promotion of sustainable consumption, electronic

commerce, financial services and measures relating to specific areas. It also is referenced with

the notion of legitimate needs of consumers and is differed from Section III on General

Principles referred to as consumer rights.

Although UNGCP takes a wide range of considerations, section K on the guidelines receives

little attention which includes a range of e-commerce and other associated sections of telecoms

and digital products.

Also, UNGCP is frequently referred to as national legislation either explicitly or implicitly by

adoption but is not an enforceable legally binding framework for States and is just a General

Assembly resolution3 adopted. Although they are not binding, they still carry a high moral

authority over all Member States.

There are a number of laws and organizations set up at regional level where trade agreements

and trading blocs exist. Most of the times, the safeguards take the form of, Competition

Commission and competition authorities fully with laws and regulations enacted to govern their

operations with their principal interest being consumer protection.

The following are some of the regional trading blocs and their consumer protection mechanisms

in place.

Trading Bloc Consumer safeguard/ protection

3
General Assembly resolution A/RES/70/186 of 22 December 2015, United Nations Guidelines for Consumer
Protection. The terms "UNGCP" and/or "Guidelines" are used to apply to the full set of guidelines in this manual.
Sections of the UNGCP are referred to as appropriate. In French, the Guidelines are referred to as Principes
Directeurs.

4
EAC Competition Act 2006, s 13
 Common Market for Eastern and Southern COMESA Competition Rules and
Africa (COMESA) Regulations 2004.
The East African Community (EAC) EAC Competition Act was enacted in 2006

West African Monetary Union (WAEMU) WAEMU Competition Commission, WAEMU

Competition Regulations 2002
Economic Community for the West African ECOWAS Regional Competition Authority
States (ECOWAS)

However, the speed of formation of the competition watchdogs and their efficiency in operation

remains a challenge. For example, in the various economic regional trading blocs, notably,

competition provisions in regional trading agreements (RTAs) usually take even much longer to

implement4.

For instance, the Common Market for Eastern and Southern Africa (COMESA) Competition

Commission was established in 2013, almost ten years after the COMESA Competition Rules and

Regulations were enacted in 2004. Moreover, the West African Monetary Union (WAEMU) Treaty

was signed in 1994. As a result, the WAEMU Competition Commission was established in 1995.

Yet the operation of the WAEMU Competition Regulations begun in 2002, a total of 8 years delay.

Similarly, the Economic Community for the West African States (ECOWAS) enacted its

Competition Regulations in 2008. However, eleven years later, in 2019, the ECOWAS Regional

Competition Authority was launched. The East African Community (EAC) Competition Authority

begun its operation on an ad hoc basis in 2018. Yet, the EAC Competition Act was enacted in

2006.

4
Ibid
5
EAC Competition Act 2006, s 13
The competition Authorities almost cover similar sectors of consumer protection interest. For

example, Sectors that COMESA cases cover are; agriculture, electronics, pharmaceuticals, energy,

automotive, construction, mining, insurance, logistics, information technology, aviation,

hospitality, telecommunications, packaging, payment systems, water treatment, retail, beverages,

commodity trading and textile.

Another classic example of consumer protection was the declaration under Southern African

Development Community (SADC). Heads of State and Government signed the SADC Declaration

on Regional Cooperation in Competition and Consumer Policies (Declaration).

THE EFFECT OF REGIONAL INTEGRATION AND INTERNATIONAL LAW ON

CONSUMER PROTECTION BETWEEN PARTIES IN DIFFERENT STATES
To fully appreciate the impact of regional integration and international law on consumer

protection, it is crucial to look into the provisions of these regional instruments; The East African

Community Competition Act, 2006 and the COMESA Competition Regulations.

THE EAST AFRICAN COMMUNITY (EAC)

The East African Community (EAC) is a regional intergovernmental organization of seven (7)

partners comprising of Burundi, Democratic Republic of Congo, Kenya, Rwanda, South Sudan,

Tanzania, Uganda with its headquarters in Arusha, Tanzania5. The Treaty for the establishment of

the East African Community was signed in Arusha on 30th November, 1999 and entered in to

force on 7th July 20006.

The East African Competition Act, 2006

5
The Treaty establishing the East African Community dated 30th November, 1999
6
The Treaty establishing the East African Community dated 30th November, 1999
6
EAC Competition Act 2006, s 13
The EAC Competition Act (hereinafter referred to as the Act) was promulgated to promote and

protect fair competition in the Community, to provide for consumer welfare, and to establish the

East African Community Competition Authority. The objects of competition policy and practice

in Section 3 of the Act expounds on the possible goals to be achieved through the Act. These

objects include:

a) prohibition of anti-competitive practices

b) elimination of barriers to interstate trade

c) guaranteeing equal opportunities especially to small and medium enterprises

d) provision of incentives to producers in the Community,

e) enhance the competitiveness of Community enterprises in world markets by exposing

them to competition within the Community

f) creation of a conducive environment for investment

g) streamlining the Community’s competition policy and practice with international best

practices

h) strengthen the Partner States’ role in relevant international organizations.7

Part VIII of the Act covers the aspects of consumer welfare. Section 28 of the Act elaborates the

practices that amount to false representation.8 Section 29 prohibits unconscionable conduct in

consumer transactions and provides for instances that amount to the same.

In determining whether an undertaking amounts to an unconscionable conduct, the EAC

Competition Authority may consider the following:

i. the relative strengths of the bargaining positions of the undertaking and the consumer 9

7
Section 3, EAC Competition Act 2006
8
Ibid, section 28
9
Ibid, section 29 (2) (a)
7
EAC Competition Act 2006, s 13
 ii. whether the consumer was required to comply with conditions that were not

reasonably necessary for the protection of the legitimate interests of the undertaking 10

iii. whether the consumer was able to understand any documents relating to the supply or

possible supply of the goods or services 11

iv. whether any undue influence or pressure was exerted on, or any unfair tactics were

used against, the consumer or a person acting on behalf of the consumer in relation to

the supply or possible supply of the goods or services 12

v. the price at which, and the circumstances under which the consumer could have

acquired identical or equivalent goods or services from another supplier.13

Section 30 of the Act authorizes the Authority to publish a notice containing one or both of the

following: statement that goods of a kind specified in the notice are under investigation to

determine whether the goods may be injurious to public health 14, and a statement of possible

risks involved in the use of goods of a kind specified in the notice. 15 Moreover, the EAC Council

may issue a notice banning the goods specified in the Authority’s public notice.16

Section 31 provides for product safety standards and unsafe goods; the section prohibits the

supply of goods for consumption or possible consumption if;

a) the goods do not comply with prescribed consumer product safety standard17

b) there is in force a notice under the Act declaring the goods to be unsafe 18

10
Ibid, section 29 (2)(b)
11
Ibid, section 29 (2)(c)
12
Ibid, section 29 (2)(d)
13
Ibid, section 29 (2)(e)
14
Ibid section 30 (1)(a)
15
Ibid, section 30 (1)(b)
16
Ibid, section 30 (4)
17
Ibid, section 31 (1)(a)
18
Ibid, section 31 (1)(b)
8
EAC Competition Act 2006, s 13
 c) there is in force any other law imposing a ban on the goods 19

Additionally, Section 32, which covers product information standards, prohibits the supply of

goods meant for consumption unless the undertaking has complied with the prescribed consumer

product information standards. 20 Crucial product information standards may include:

a) the disclosure of information relating to the performance, composition, contents, methods

of manufacture or processing, design, construction, finish or packaging of the goods21

b) the form and manner in which that information is to be disclosed on or with the goods; as

are reasonably necessary to give persons using the goods information as to the quantity,

quality, nature or value of the goods.22

Section 33 provides for recall of products in the following instances:

a) where the goods are of a kind which may cause injury to any person

b) where the goods do not comply with prescribed consumer product safety standard

c) where the goods are specified in a public notice banning the goods under section 31

(1)(c)

d) the undertaking has not taken satisfactory action to prevent the goods from causing injury

to any person. 23

Section 34 provides where a consumer or a third party acquires goods that the goods are not

reasonably fit for that purpose, the undertaking supplying those goods shall be liable to

compensate the consumer or that other person for the loss or damage and the consumer or that

19
Ibid, section 31 (1)(c)
20
Ibid, section 32 (1)
21
Ibid, section 32 (2)(a)
22
Ibid, section 32 (2)(b)
23
Ibid, section 33(1)
9
EAC Competition Act 2006, s 13
other person may recover the amount of the compensation by action against the undertaking in a

court of competent jurisdiction. 24

A) THE POSITIVE EFFECTS OF EAST AFRICA COMMUNITY RULES ON

CONSUMER PROTECTION

The East African Community is a regional intergovernmental organization of seven partner states

i.e. Burundi, DRC, Kenya, Rwanda, South Sudan, Uganda and Tanzania that aims at widening

and deepening cooperation among the partner states and other regional economic communities in

political, economic and social fields for their mutual benefit.25

Among the legislative framework of the East African Community is The East African

Community Competition Act which is an act of the Community to promote and protect fair

competition in the community, to provide for consumer welfare, to establish the East African

Community Competition Authority and for related matters.26 This Act protects consumers in

various ways through its provisions as discussed below.

The Act prohibits anti-competitive practices.

Section 5 prohibits a person to engage in concerted practice if that practice has, or is intended to

have, an anticompetitive effect in the relevant market.27 Also practices such as collusion by

competitors to fix prices; collusive tendering and bid rigging; collusive market or customer

allocation; quantitative restraints on investment, input, output or sales; barring competitors from
24
Ibid, section 34(1)
25
https://www.eac.int>overview-of-eac (Overview of EAC-East African Community) <accessed on 20th Nov 2022>
26

https://www.eacompetition.org ›
(Consumer Welfare; East African Community Competition Authority) <accessed 20th Nov 2022>
27
EAC Competition Act 2006, s 5(1)
10
EAC Competition Act 2006, s 13
access to the market or from access to an association or arrangement which is essential for

competition; concerted practice restricting movement of goods within the Community are

prohibited.28

Restricting exports to or imports from foreign countries is prohibited, if it is intended to have

anticompetitive effects on the relevant market within the Community or on access of Community

undertakings to exports or imports.

The exemption to anti-competitive practices is when the concerted practice is limited to

objectives which lead to an improvement of production or distribution and whose beneficial

effects, in the opinion of the Authority, outweigh its negative effects on competition. 29

Permission ha to be granted for concerted practice by the authority.30

The Act also guards consumers against Consumer exploitation

An undertaking holding a dominant position in the relevant market shall not directly or indirectly

impose unfairly high selling or unfairly low purchasing prices or other unfair trading conditions;

limit production or technical development and innovation to the prejudice of consumers;

discriminate between consumers or suppliers according to non-commercial criteria such as

nationality or residence.31

It encourages competition to prevent market dominance that leads to consumer exploitation. It

prohibits an undertaking holding a dominant position in the relevant market (I) from engaging in

28
EAC Competition Act 2006, s 5(2)
29
EAC Competition Act 2006, s 5(3)
30
EAC Competition Act 2006, s 7
31
EAC Competition Act 2006, s 8
11
EAC Competition Act 2006, s 13
any practice that excludes, or is intended to exclude, its competitors from the market by means of

predatory pricing; price squeezing; cross subsidization.32

(II) from engaging in a practice that harms the competitive position of competitors on

downstream markets by; a refusal to deal; a refusal of access to an essential facility; tying

arrangements; unjustifiably discriminating among customers or suppliers. 33

(II) from engaging in a practice whereby the resale prices or conditions are directly or indirectly

fixed; customers or competitors are foreclosed from access to sources of supply or from access to

outlets; movement of goods or services between different geographical areas are restricted; an

intellectual property right is used in any way that goes beyond the limits of its legal protection.34

The Act further regulates Mergers and Acquisitions

Notification of the Authority is required to execute a merger or an acquisition.35 This merger or

acquisition comes into effect upon approval by the authority.36 The merger or acquisition will not

be approved if it leads to the creation or strengthening of an already subsisting dominant

position, and thereby substantially lessening competition in the relevant market.37

Part VIII of the Act promotes consumer welfare

32
EAC Competition Act 2006, s 9 (1)
33
EAC Competition Act 2006, s 9(2)
34
EAC Competition Act 2006, s 10
35
EAC Competition Act 2006, s 11
36
EAC Competition Act 2006, s 12
37

12
EAC Competition Act 2006, s 13
It prohibits false representations as it provides that an undertaking shall not, in connection with

the supply or possible supply of goods or services or in promotion of goods or services; falsely

represent that goods are of a particular standard quality, value, grade, composition, style or

model or has a particular history or particular previous use; falsely represent that services are of

a particular standard quality, value or grade; falsely represent that goods are new; falsely

represent that a particular person has agreed to a particular goods or services; falsely represent

that goods or services have sponsor approval, performance characteristics, accessories, benefits;

falsely represent that the person has a sponsorship, approval, or affiliation; make a false

representation with respect to the price of goods or services; make a false representation

concerning the availability of facilities for the repair of goods or of spare parts for goods; make

a false representation concerning the place of origin of goods; make a false representation

concerning the need for goods or services; make a false representation concerning the existent

exclusion or effect of any condition, warranty, guarantee, right or remedy.38

It prohibits unconscionable conduct in consumer transactions in connection with supply or

possible supply of goods to a person.39

Protects Consumers of the EAC from dangerous goods

The Authority is enabled to publish in at least two newspapers of national circulation in each of

the Partner States, a notice containing one or both of the following; a statement that goods of a

kind specified in the notice are under investigation to determine whether the goods may be

injurious to public health; a statement of possible risks involved in the use of goods of a kind

specified in the notice.40

38
EAC Competition Act 2006, s 28
39
EAC Competition Act 2006, s 29
40
EAC Competition Act 2006, s 30
13
EAC Competition Act 2006, s 13
It prohibits supply of goods that are intended for use if such goods do not comply with a

prescribed Consumer product safety standard, if there is a notice declaring the goods to be unsafe

goods or a notice under any other law imposing a ban on the goods.41 Such goods are also

prohibited from being exported unless the Council has approved the exportation of the same.

The Act has also set forth product information standards as goods of a kind in respect of which a

consumer product information standard has been prescribed shall not be supplied unless the

person has complied with the consumer product information standard in relation to those goods.42

It gives authority the mandate to take action where a person supplies goods that are intended to

be used, or are of a kind likely to be used by a consumer; and it appears to the Authority that the

goods may cause injury to any person; or in respect of which there is a prescribed consumer

product safety standard and the goods do not comply with that standard; or it appears to the

Authority that the undertaking has not taken satisfactory action to prevent the goods from

causing injury to any person.43

Liability for supply of unsuitable goods, defective goods causing injury or loss

Section 34 and 35 establish liability for supply of unsuitable goods or goods that have a defect

which occasions injury or loss, as it states that the undertaking shall be liable to compensate the

consumer or that other person for the loss or damage.

41
EAC Competition Act 2006, s 31
42
EAC Competition Act 2006, s 32
43
EAC Competition Act 2006, s 33
14
EAC Competition Act 2006, s 13
The Act also provides a remedy for unidentified manufacturers of products as if the supplier does

not avail the manufacture of the goods, then he or she is presumed to be the manufacturer

thereof.44 This is in protection of the consumer of the goods.

Part IX of the Act establishes the East African Community Competition Authority

The Act gives the Authority mandate of implementation and enforcement of the East African

Community Competition Act.45

It therefore gives the Authority power to gather information; investigate and to compel evidence,

including the search and seizure of documents; hold hearings; issue legally binding decisions;

impose sanctions and remedies ; refer matters to the Court for adjudication; recommend to the

Council to make regulations; develop appropriate procedures for public sensitization,

consultation and participation; develop appropriate procedures for consultation and involvement

of the East African Community's Sectoral regulatory regimes for purposes of enhancing

compatibility with the East African Community Competition Act; formulate by-laws for the

operation of the Authority; collect data, undertake studies and publish reports; co-operate with

regional and international organizations and with foreign competition authorities.46

Part VIII of the EAC Competition Act, 2006 (the Act) mandates the Authority to

investigate complaints related to false or misleading representations of goods and

services, dangerous goods, poor safety standards, and unsafe goods, unconscionable

conduct among others.

44
EAC Competition Act 2006, s 36
45
EAC Competition Act 2006, s 42
46
EAC Competition Act 2006, s 42(2)
15
EAC Competition Act 2006, s 13
The Authority also investigates undertakings that fail to comply with prescribed Consumer

Product Safety Standards and prescribed Product Information Standards.

The Authority also promotes consumer welfare, sensitizes consumers about their rights and

obligations under the Act. It also advocates for compliance with the Act and advises Partner

States on matters related to consumer welfare.

B) NEGATIVE EFFECTS OF EAC REGULATIONS ON CONSUMER PROTECTION

Despite the fact that it is undoubtedly true that EAC, which is home to about 135 million people

and a new frontier for oil and gas exploration, will draw higher levels of foreign investment

because of a monetary union, remittance finance and foreign aid will continue to be the region's

primary sources of funding.47 These only results to them being a slave to the western countries.

Additionally, the East African Community regional bloc's industrialization is not supported by

any strong data.48 This can be rationally inferred from the mere size of these economies, which

are too small to draw commercially viable inward investment because, for instance, of the weak

infrastructure development.49

Moreover, the law enforcement officers openly request bribes from the local business owners.50

Prominent business owners willingly gave bribes to the police and customs officials in order to

get their goods carried through, as did transporters and other market participants51. Because

47
The Pros and Cons of EAC https://african.business/2014/11/economy/pros-cons-eac-monetary-union/2/ Accessed
on 20th November 2022
48
Ibid
49
J. P. Wakhungu, G. P. Okoth, E. O. S. Odhiambo, Challenges and Opportunities Constraining and Enhancing
Kenya and Tanzania Participation in the EAC Econo-Political Integration Process, Open Journal of Political Science
2021
50
Ibid
51
Ibid

16
EAC Competition Act 2006, s 13
people now believe they must bribe their way out of a situation, the culture of corruption in

society and even among families has increased as a result.52 Thus, this has a negative effect on

the household members' social morals.

Lastly, within the East African Community, there are also many priorities.53 This has made it

impossible to guarantee that all nations will gain equally from regional integration.54 Kenya's

currency, for instance, increased while the currencies of other nations declined.55 This only

means that there are various growth accelerations among the members of this economic bloc.

52
Ibid
53
Achievements and Failures of the East African Community,
https://thebestofafrica.org/content/successes-and-failures-of-the-east-african-community Accessed on 20th
November 2022
54
Ibid
55
Ibid

17
EAC Competition Act 2006, s 13