On 19 April 2024, Uganda marked a new era in competition law with the commencement of the long-awaited Competition Act, (Cap.66) ("the Act"). After 20 years, the President assented to the Act raising hopes for a fairer and more transparent economy in Uganda.
The Act outlines the responsibilities of the administrative arm, the Ministry of Trade, Industry and Cooperatives ("the Ministry") and grants the Minister responsible for trade with the authority to issue regulations that will give effect to the Act's provisions.
Deadline day
The Minister was given a six-month deadline from the commencement date of the Act to present competition regulations before Parliament. With the 21 October 2024 deadline fast approaching, concerns are growing among market players, including investors and advisors, due to the delay in issuing the draft regulations.
For many market players, the absence of clear rules has created an unpredictable environment where the distinction between anti-competitive practices and fair competition remains blurred and largely unregulated.
The anticipated regulations are expected to contain guidelines for the proper implementation and enforcement of the Act. These may include details on the procedure for inquiring into anti-competitive practices or agreements, the form and manner of merger control notifications, merger thresholds, applicable fees, and the compensation or penalties for contraventions of the Act.
Public consultation
The delay has also raised doubts about whether adequate public consultation has been undertaken ahead of the publication deadline. To the best of our knowledge, no such public consultation has occurred. The duty of public bodies to consult remains significant in public decision-making for good governance, transparency, fairness and accountability. It is crucial that the Minister prioritises proper stakeholder engagement before submitting the competition regulations to Parliament.
Risk of nullification
In the event that the regulations are published after the 21 October deadline, the instrument could face legal challenges. The Act imposed a specific timeline for publication of the regulations – within six months from the commencement date. Affected parties may seek to have the overdue instrument nullified for contravening provisions of the Act.
Conclusion
As Uganda races to join its regional counterparts in enforcing competition law and with the 21 October deadline looming, concerns are mounting over whether the anticipated regulations will be published on time. Engaging with stakeholders remains paramount to ensuring the regulations are thoughtfully considered and reflect the public's input. Without thorough consultation, the regulations may fail to address market concerns.
Timely implementation of the Act is crucial to providing clarity on key issues such as inquiries into anti-competitive practices, merger notifications and the relevant procedures. The clock is ticking and the need for robust regulations has never been more pressing.
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