- within Antitrust/Competition Law topic(s)
- with Inhouse Counsel
On 4 December 2025, the COMESA Council of Ministers approved and adopted the final COMESA Competition and Consumer Protection Regulations, 2025 (New Regulations), which have repealed and replaced the previous COMESA Competition Regulations, 2004 (Repealed Regulations) as of 4 December 2025.
In a previous blog post, we highlighted the most significant changes to the new regime that will be administered by the COMESA Competition and Consumer Commission (CCCC), and highlighted substantive changes between the regulations as they were published in draft and in the New Regulations.
One of the significant amendments concerns the New Regulations' per se prohibition of vertical restrictions. In particular, Article 34(4) of the New Regulations per se prohibits undertakings in a vertical relationship from taking part in any of the following practices:
- absolute territorial restrictions;
- restrictions on passive sales; and
- minimum resale price maintenance (MRPM).
The New Regulations do not define any of these practices, but the CCCC's COMESA Guidelines on Restrictive Business Practices, 2019 (Old Guidelines) issued under the Repealed Regulations described them as follows:
- territorial restrictions in vertical relationships refer to a situation where a supplier of goods or services agrees to sell the goods or services to a particular distributor on the basis that the distributor will have the exclusive right to resell the products or services within a particular territory – there was no definition of absolute territorial restrictions;
- passive sales restrictions refer to a situation where the supplier of goods or services prevents distributors of the goods or services from responding to unsolicited requests for sales from customers established outside of the distributor's allocated territory; and
- MRPM refers to a restriction of the buyer's ability to determine its sale price, without prejudice to the possibility of the supplier to impose a maximum sale price or recommend a sale price.
In the Repealed Regulations, agreements between parties in a vertical relationship, including territorial restrictions, passive sales restrictions or MRPM were assessed in terms of Article 16, which prohibited all agreements between undertakings, decisions by associations and concerted practices which (a) may affect trade between COMESA member states, and (b) have as their object or effect the prevention, restriction or distortion of competition within the common market for the COMESA region.
Article 16 of the Repealed Regulations therefore largely mirrored Article 101(1) of the Treaty on the Functioning of the European Union (TFEU). These vertical restrictions would also have been assessed in terms of Article 18 of the Repealed Regulations to the extent that they were perpetuated by an undertaking that holds a dominant position.
Whatever the case, the Repealed Regulations did not include per se prohibitions on vertical restraints. While there are indications that the CCCC took a strict stance in applying Article 16 of the Repealed Regulations to absolute territorial restrictions, passive sales restrictions and MRPM in practice (see for example its settlement agreement with Heineken Holdings N.V), the CCCC's approach to vertical restraints set out in the Old Guidelines indicated that it would conduct an effects-based assessment to determine whether vertical restraints fall within the Article 16 prohibition, including amongst others, considerations of whether the practices involve undertakings with market power, existing competitive dynamics and constraints, duration of the restraints, etc.
This is different from the European Commission's (EU Commission) assessment of passive sales restrictions and MRPM under Article 101(1) TFEU. The EU Commission regards MRPM and passive sales restrictions as restrictions of competition "by object", which are presumed to be a breach of Article 101(1) TFEU and therefore do not require an effects-based analysis. However, there are no per se restrictions under EU competition law and even an agreement that restricts competition by object can still benefit from the efficiencies exemption under Article 101(3) TFEU and therefore fall outside the scope of Article 101(1), provided the parties to the agreement can demonstrate that all four conditions set out in Article 101(3) are met.
The New Regulations exclude the requirement for an effects-based assessment in respect of absolute territorial restrictions, passive sales restrictions and MRPM and those agreements will be prohibited by Article 34(4) irrespective of whether they have led, or are likely to lead, to material adverse effects on competition.
The prohibitions on absolute territorial restrictions and passive sales restrictions appear to both relate to restrictions on passive sales, with the former potentially achieved through practical measures such as systems restrictions rather than contractual restrictions. It does not appear that active sales restrictions, where the supplier of goods or services prevents distributors of the goods or services from actively marketing the goods or services to or actively soliciting purchases from customers established outside of the distributor's allocated territory, are the subject of the per se prohibition.
MRPM and passive sales restrictions are typically presumed to have anti-competitive effects and are, therefore, commonly considered a hardcore restriction to competition globally, even in the absence of express legal prohibitions. COMESA's per se prohibition on these practices is therefore, not a significant departure from global approaches.
Contraventions of Article 34(4) may result in fines of up to 10% of COMESA turnover for each party to the contravention and so undertakings with material turnover in COMESA should review existing distribution agreements and take advice on any clauses in those agreements that may be caught by Article 34(4) of the New Regulations.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
