CONSUMER PROTECTION

Consumer protection is concerned with

safeguarding consumer welfare. A consumer as
defined by the Competition Act includes any
person who purchases or offers to purchase
goods or services otherwise than for resale, but
does not include a person who purchases any
goods or services for the purpose of using them
in the production or manufacture of any goods
or articles for sale: S. 2 Competition Act.
In contrast, the Consumer Protection Act
describes a consumer as including a person to
whom goods or services are marketed in the
ordinary course of the supplier’s business, who
enters into a transaction with a supplier in the
course of the supplier’s business, who uses
particular goods or receives particular services
irrespective of whether he was a party to a
transaction concerning the supply of the goods
or services, and a franchisee under a franchise
agreement: S. 2(1) Consumer Protection Act.
The definition in the Competition Act is
narrower than that in the Consumer Protection
Act as it excludes a person who purchases or
offers to purchase goods or services for resale as
well as who purchases or services as raw
materials for use in the production or
manufacture of any goods or services for sale.
The difference may be explained by the purpose
of the legislation. The Competition Act does not
regulate the conduct of consumers and by
excluding resellers from the definition of
consumer, it makes their conduct subject to
regulation under the Act because of its likely
effect on the market. In contrast, the Consumer
Protection Act adopts a wide definition to
 Constitutional basis for consumer
protection
safeguard the interests of consumers of all
types.
The basis for consumer protection is expressed
in Article 46 of the Constitution which provides
that consumers have certain rights in respect of
goods and services offered by public entities or
private persons to the following: (a) goods and
services of reasonable quality; (b) information
necessary for them to gain full benefit from
goods and services; (c) protection of their
health, safety and economic interests; and (d)
compensation for loss or injury arising from
defects in goods or services.
The principal legislation governing consumer
protection are the Consumer Protection Act and
the Competition Act. The latter is concerned
with the promotion of competition in the
market by regulating anti-competitive behaviour
such as abuse of dominance, as well as
safeguarding the welfare of consumers by
ensuring that consumers are beneficiaries of a
free and fair market economy.
The Competition Act contains provisions on
restrictive trade practices, control of mergers
and takeovers and unwarranted concentrations
of economic power. One type of restrictive trade
practice is abuse of dominance, which occurs
whenever carried on by dominant undertakings.
Abuse of dominance includes four practices:
(a) unfair pricing or other trading conditions;
(b) predatory practices; (c) tieing arrangements
involving imposition of conditions unconnected
to contracts;(c) discriminatory practices; and (e)
abuse of intellectual property rights: S. 24
Competition Act.
 Consumer rights
Part II of the Consumer Protection Act gives
consumers a wide range of rights including the
right to commence legal action on behalf of a
class of persons in relation to any contract for
the supply of goods or services to the consumer.
This right cannot be ousted by any agreement
between the parties.
Other consumer rights provided for in the Act
include the right to full pre-contractual
information for the consumer to make an
informed choice, the right to complain regarding
the quality, delays in provision of rectification,
quantity and price of such goods or services as
are offered, the right to a reasonable
 Consumer welfare: (a) unfair trade
practices
notification of termination of service,
particularly in relation to the provision of basic
telecommunication services and/or Internet
access, and so on.
The provisions on consumer welfare in the
Competition Act deals with four aspects. First it
prohibits unfair trade practices and provides for
sanctions against a supplier who engages in such
practices. The practices include false and
misleading representation that goods or services
have sponsorship, approval, performance or
characteristics that they do not have; or that
goods or services are of a particular standard,
quality, grade, style or model if they are not, and
so on: S. 55 The type of unfair trade practices is
expressed by the provisions of the Consumer
Protection Act regarding false misleading or
deceptive representation in largely similar
terms: S. 12.
The Consumer Protection Act also includes in
unfair practices, renegotiation of price. This
 (b) Unconscionable conduct
occurs when a person uses their custody or
control over a customers goods to pressure the
consumer into renegotiating the terms of the
consumer transaction.
Secondly, the Competition Act regulates
unconscionable conduct which involve
deliberate, serious, unfair and unreasonable
misconduct against consumers and business
transactions: S. 56. The provision largely also
reflect the unfair practice of unconscionable
representation set out in S. 13 of the Consumer
Protection Act. The factors that the Act provides
to be used in determining whether there was
unconscionable representation include the
relative strengths of the bargaining positions of
the consumer and the other party. This may be
shown by two factors identified by the
Consumer Protection Act: (a) whether the terms
of the transaction were so adverse to the
consumer to be inequitable; and (b) where the
consumer is unable to receive a substantial
benefit from the subject matter of the
representation: S. 13.
The other factor in the Competition Act whether
the consumer was required to comply with
conditions that were not reasonably necessary
for the protection of the legitimate interest of
the other party. The Consumer Protection Act
identifies whether the consumer transaction is
excessively one sided in favour of the other
party as a factor that may show this: S. 13.
The Competition Act also sets out as a factor
whether undue influence or pressure was
exerted. This is also explicitly provided for in the
Consumer Protection Act, but in addition the
latter Act highlights whether the consumer is
reasonably able to protect his interest as a result
of disability, illiteracy, ignorance and similar
factors as relevant.
The last factor set out in the Competition Act to
be considered is the circumstances in which the
consumer would have acquired identical or
equivalent goods or services from another
supplier. The Consumer Protection Act identifies
where the price grossly exceeds the price at
which similar goods or services are readily
available to consumers as an indication that
may lead to the inference of the existence of
this factor. Whether a misleading statement of
opinion was made to the consumer that was
likely to be relied upon by the consumer to his
detriment may also be used to make inference
on this factor.
The Competition Act specifically states that
banking, microfinance, insurance and other
services are prohibited from imposing unilateral
 (c) Product safety standards
charges and fees without first exposing them to
the consumer before providing services and
levying such fees and services: S. 56(3).
Thirdly, the Competition Act governs product
safety standards and unsafe goods. Section 59
provides that it is unlawful for a business or
supplier to sell banned goods or goods that do
not comply with consumer product safety
standards before they are offered for sale.
Suppliers are prohibited from selling goods
which have been declared unsafe. For this
purpose, the Competition Authority collaborates
with specialised agencies like KEBS but may get
involved in specialist matters when a regulator’s
 Product Liability for unsuitable goods and
services
powers are insufficient to address safety issues.
It may use mechanisms such as bans, remedial
measures, recall of products, declarations of
product safety or information standards.
The Competition Act provides for liability in
respect of unsuitable goods and services. There
are three types of defects which might cause
injury and give rise to manufacturer or supplier
liability: (a) manufacturing defects arising from
the manufacturing process through the use of
poor quality materials or shoddy workmanship.
A manufacturer is liable if the product is
defective even if the manufacturer was not
negligent in making that product defective. This
is strict liability, and the consumer does not
have to prove that the manufacturer was
negligent; just that the product was defective. In
Escola v. Coca-Cola Bottling Co. 24 Cal. 2d 453 at
463, Justice Traynor stated: “…if such products
nevertheless find their way into the market it is
to the public interest to place the responsibility
for whatever injury they may cause upon the
manufacturer, who, even if he is not negligent in
the manufacture of the product, is responsible
for its reaching the market.”
(b) Design defects where the product design is
inherently dangerous or useless in that it fails to
satisfy ordinary consumer expectations as to
safety; and (c) marketing defects involving
inherent non-obvious dangers which could be
mitigated through adequate warnings to users
and these dangers are present regardless of how
well the product is manufactured or designed
for the intended purpose.
 (d) Information standards
Fourthly, the Act addresses product information
standards. Any person who supplies or offers to
supply goods that a consumer product
information standard applies to must comply
with that standard and if there are more than
two standards, they must comply with at least
one.
 Institutional framework
The Consumer Protection Act establishes the
Consumer Protection Advisory Committee to aid
in the formulation of policy related to consumer
protection, accredit consumer organisations,
advise consumers on their rights and
responsibilities, investigate complaints and
establish conflict resolution mechanisms
amongst other duties: Ss. 89-90 Consumer
Protection Act.