By Benadetta Chiwanda Mia:
The Competition and Fair Trading Commission (CFTC) has introduced a new penalty framework.
One of the highlights is the establishment of fines of up to K25 million for businesses that engage in unfair trading practices. The development marks a crucial step in enforcing the recently enacted Competition and Fair Trading Act (CFTA). For example, the commission has set base penalties at 2 percent of annual turnover for enterprises involved in restrictive trade agreements while individuals face a 1 percent penalty rate.
More severe sanctions have been established for abuse of market dominance, with enterprises facing penalties of 4 percent of their annual turnover. Individual perpetrators in such cases will be subject to a 2 percent penalty rate.
The commission has reserved its strictest measures for cartel activities, implementing a 7 percent penalty for enterprises and 4 percent for individuals involved in such practices. Furthermore, enterprises with turnovers not exceeding K50 million will face penalties of 1 percent, with a ceiling of K2.5 million.
For the same category, individual traders will be subject to a 0.5 percent penalty, capped at K1.2 million. A more stringent penalty structure applies to larger enterprises operating within the K250 million to K500 million turnover range. These businesses face potential fines of 1 percent of turnover, with a maximum penalty of K25 million.
Individual traders within this bracket will be subject to a 0.5 percent penalty, not exceeding K12.5 million.
CFTC spokesperson Innocent Helema emphasised the strategic timing of these guidelines, which coincide with the implementation of the new CFTA.
“The Parliament’s passage of the CFT Act in 2024, which became effective in July 2024, represents a significant modernisation of our regulatory framework. These guidelines, operational since December [last year], are essential tools in ensuring effective implementation,” Helema said.
Meanwhile, Malawi Confederation of Chambers of Commerce and Industry (MCCCI) Chief Executive Officer Daisy Kambalame has welcomed the new guidelines while emphasising the critical need for equitable enforcement.
“While we recognise the necessity for penalties to reflect current market realities and serve as effective deterrents, it is paramount that all stakeholders have a clear understanding of the rules.
“Consistent application of these penalties is fundamental to fostering equality, fairness and healthy competition in our business environment,” Kambalame said.
The new framework represents a substantial evolution from its predecessor, the 1998 Act, which imposed a relatively modest minimum penalty of K500,000 and restricted the commission’s authority in addressing unfair business practices.
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