The Competition and Fair Trading Act of 1995

The Competition and Fair Trading Act of 1995

(The Zambia Competition Commission)

This legislation is intended to promote economic efficiency by encouraging competition or at least prohibiting behaviour which kills, restricts or distorts competition.

The rationale for encouraging competition is that it promotes economic efficiency. That is, when the economy is market driven through competition, economic efficiency will manifest itself in the following:

• Producers will produce the type and quantity of goods which consumers want;
• The goods will be produced and sold at the optimum price, where the forces of supply and demand are balanced; and
• The delivery of the right goods, at the right time, to the customer.

1.The Elements of Competition Policy

1.1.Prohibits any agreement, decision, or concerted practices which prevent, restrict or distort competition

1.2.Prohibits enterprises from acquiring a dominant position of market power which results in limiting access to markets or unduly restricts competition, such as:

1.2.1.The use of cost pricing to eliminate competition

1.2.2.Discriminatory pricing and discrimination in the supply or purchase of goods and services

1.2.3.Making the supply of goods and services dependent upon the acceptance of restrictions on the distribution or manufacture of competing goods

1.2.4.Making the supply of particular goods and services dependent upon the purchase of other goods/services from the supplier to the consignee.

1.2.5.Imposing restrictions on where and to whom goods may be sold, or in what quantities goods may be sold

1.2.6.Effecting mergers, acquisitions joint ventures or takeovers

1.2.7.Colluding in setting prices whose effect is to eliminate competition

1.2.8.Allocation agreements on markets and customers

1.2.9.Concerted refusals to supply goods and services to potential purchasers

1.2.10.Unjustifiable exclusion from a trade association of any person carrying on or intending to carry on in good faith the trade in relation to which the association is formed

2.Promotion of Consumer Welfare and Protection

It is prohibited to:

2.1.Withhold or destroy producer or consumer goods, render unserviceable or destroy means of production and distribution of such goods, with the aim of bringing about a price increase.

2.2.Disclaim liability for defective goods

2.3.Limit any warranty to a particular geographic area or sales point

2.4.Falsely represent that goods are of a particular style, model or origin

2.5.Falsely represent that goods are new or of a specified age

2.6.Represent that goods have any sponsorship, approval, performance and quality characteristics, components, accessories, uses or benefits which they do not have

2.7.Engage in conduct that is likely to mislead the public as to the nature, price, availability, characteristics, suitability, quantity or quality of a product

2.8.Supply any product which is likely to cause injury to health or physical harm to consumers, when properly used, or which does not comply with the consumer safety standard which has been prescribed under any law