In a market thronged with services and goods providers is one that is likely going to offer variety and mass of services to the consumers to choose from but when it presents a ‘one man show’ dominance then chances are high that the organization is likely to take advantage of the market, competitors and at the end of it, the consumer.
The owners of popular braids brand, Darling, risk spending five years in jail after the Competition Authority of Kenya (CAK) found the firm guilty of abusing its dominance.
Style Industries Ltd, majority owned by Indian conglomerate Godrej Consumer Products, produces and distributes hair and hair additions for women in East Africa. The company deals in braids, extensions, bulks, weaves and wigs. It also offers cosmetics such as conditioners, shampoos, baby oils and baby powders.
Styles Industries Ltd’s competitor, Solpia Kenya, had accused the firm of engaging in restrictive trade practices, including imposing unfair selling prices and conditions on suppliers who sell its products.
“The authority commenced investigations against Style Industries Ltd for abuse of dominance practices in violation of Section 24(1),(2)(b) of the (Competition) Act,” said CAK in its annual report for the financial year 2017/18.
“Styles Industries Ltd was accused of abuse of dominance because of conduct involving threatening stockists that stocked the complainant’s products with account closure, removal of discounts and refusal to supply products.”
The authority may, as a result, impose a financial penalty of up to 10 per cent of the firm’s preceding year’s turnover in the country.
This even as settlement negotiations continues, which might see Styles pay Solpia an unspecified amount of money in damages, or be slapped with a fine of Sh10 million while its owners could be jailed for five years or both.
This is not the first time CAK is dealing with the issue of dominance and undue competition with past attempts to have Safaricom, Kenya’s largest telecoms operator, declared dominant flopping omo and ariel washing powders were also involved in the same tackle.