Abstract

The regulation of anti-competitive trade practices in Malawi is governed by the CFTA and is conducted by the CFTC. Recently, the CFTC has been issuing enterprises with notices that their trade practices are anti-competitive hence prohibited and requiring them to file notifications costing about MK1 million. However, the prescribed definition of an anti-competitive trade practice is not clear for an enterprise to know in advance that its trade practice is anti-competitive as it depends on whether it lessens competition to an appreciable extent. There is no prescribed gauge of the appreciable extent hence the CFTC developed an appreciability test which, unfortunately, does not set a clear threshold which is predictable to all stakeholders for purposes of planning intervention by the CFTC secretariat and compliance or investment by enterprises. Consequently, the intervention costs and compliance costs are high leading to inefficient regulation. Additionally, the determinations are subjective without economics-oriented analysis and will eventually result in inconsistencies. Ultimately, there is incoherence between the regulatory framework and the broader policy objective of the Competition Policy for Malawi and the CFTA. These effects are due to the fact that the appreciability test was not premised on the principles of effective regulation hence inadequate to effectively regulate anti-competitive trade practices. Ineffective regulation of trade practices affects the running of the market and economic growth hence the need to depart from the USA-like discretionary appreciability test to a clear and predictable test with a market power threshold like in the EU.

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School	: School of Law, Economics and Government
Issued Date	: 2015

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