The Kenya Competition Authority is adapting its enforcement tools as artificial intelligence, digital lending and online commerce create new risks for consumers and competitive markets.
In its annual report for the 2024-25 financial year, the Competition Authority of Kenya, or CAK, highlighted how data-driven business practices are making some forms of market misconduct harder to detect and prove.
The regulator reviewed 128 merger applications during the year, compared with 107 in the previous period, according to the report. It also cleared transactions expected to generate more than KES 25 billion in investment and imposed KES 1.44 billion in penalties across several sectors.
However, the report’s broader significance lies in the changing nature of the cases reaching the authority. Pricing software, mobile lending applications, digital marketplaces and online fraud are becoming a more visible part of Kenya’s competition and consumer-protection landscape.
Kenya Competition Authority faces algorithmic risks
Traditional cartel investigations often focus on direct communication among competitors.
Investigators may look for meetings, emails, telephone records or documents showing that companies agreed to fix prices, divide markets or manipulate bids.
AI-supported pricing creates a more complicated enforcement problem. Businesses increasingly use automated systems to adjust prices according to demand, supply, customer behavior and competitors’ actions.
In some markets, competing algorithms may repeatedly respond to each other and produce similar pricing patterns. That can make it difficult to determine whether the outcome reflects normal market behavior, independent software decisions or deliberate coordination.
The legal challenge is particularly significant because competition cases often require evidence of an agreement or coordinated conduct. Similar prices alone do not necessarily prove that companies have formed a cartel.
As a result, regulators may need to examine how an algorithm was designed, which instructions it received, what data it used and whether company executives understood the likely market effects.
CAK’s strategic plan for 2023 through 2027 identifies artificial intelligence, big data and digital platforms among the developments likely to affect competition enforcement and consumer welfare.
Digital investigations become more important
To strengthen its investigative capacity, CAK established a digital forensics laboratory during the financial year, according to the annual report.
The facility is intended to help investigators retrieve and analyze information from computers, mobile phones and other electronic devices. That evidence could prove important in cases involving suspected cartels, bid-rigging, price-fixing and other restrictive business practices.
Digital forensics can allow investigators to reconstruct communications, transactions and internal decision-making processes that may not appear in printed records.
It can also help preserve electronic evidence in a format suitable for administrative proceedings or court cases. However, the authority must still show that the evidence was obtained lawfully and handled through reliable procedures.
The investment reflects a wider change in corporate investigations. Important evidence may now sit in cloud accounts, messaging platforms, databases and software logs rather than physical filing systems.
This shift matters because complex cartel cases can already take years to investigate. Larger volumes of electronic evidence and more sophisticated technology may extend the time required to establish how a market practice developed.
Regulator upgrades internal technology
CAK also modernized its internal information systems during the reporting period.
The authority replaced Microsoft Dynamics NAV 2016 with a newer enterprise resource planning platform. The upgrade is intended to automate more administrative processes, strengthen information security and improve access to operational data.
The regulator also rebuilt its website using updated web technologies and a newer content-management system.
These changes may appear administrative, but they support CAK’s broader enforcement role. Faster case management, improved record keeping and stronger data security can help the authority handle increasingly technical investigations.
They may also make it easier for businesses and consumers to submit complaints, obtain guidance and follow regulatory decisions online.
Digital lenders dominate financial complaints
Consumer complaints provide some of the clearest evidence of how Kenya’s digital economy is reshaping the authority’s workload.
Complaints involving digital lenders and microfinance applications accounted for 61% of complaints received from the financial sector during the year, according to the report. That was up from 34% in the previous financial year.
The increase reflects the rapid expansion of app-based credit, which allows consumers to borrow money quickly through mobile devices.
While digital loans can improve access to short-term financing, regulators have raised concerns about unclear pricing, undisclosed charges, changing loan conditions and aggressive collection practices.
The authority has previously examined Kenya’s digital credit market and recommended stronger safeguards for borrowers, including clearer disclosure of total charges and improved reporting by lenders.
The rise in complaints suggests that easier access to credit has not always been matched by adequate consumer understanding or consistent compliance practices.
For CAK, the challenge is to distinguish between disputes that fall under competition law, consumer-protection violations and matters that should be handled by other financial regulators.
E-commerce fraud raises enforcement questions
Complaints linked to scams and fraudulent activity in online trade also increased during the year, according to the report.
CAK began working with Kenya’s Directorate of Criminal Investigations on cases that appeared to involve possible criminal conduct rather than ordinary disagreements between buyers and sellers.
E-commerce platforms create significant opportunities for small businesses and consumers. However, they can also allow anonymous or misleading sellers to reach large numbers of customers quickly.
Competition and consumer regulators may address false advertising, unfair contract terms and misleading commercial practices. Cases involving theft, identity fraud or organized scams may require criminal investigation.
That overlap makes cooperation among agencies increasingly important as commercial activity shifts online.
Technology appears across merger reviews
Digital businesses also appeared in CAK’s merger-review activity.
The report included EDAA International Kenya’s acquisition of Tawi Fresh Kenya, a digital marketplace connecting farmers with commercial buyers.
Another transaction involved Novus Holdings increasing its interest in a software-publishing business.
These deals illustrate how technology is becoming integrated into agriculture, logistics, retail and other parts of the Kenyan economy. Consequently, regulators must assess not only conventional market shares but also access to data, network effects and the ability of digital platforms to influence trading relationships.
CAK also tracked digital taxi services as a separate category in its restrictive trade-practices investigations. The classification suggests that ride-hailing platforms are now a regular feature of Kenya’s competition landscape rather than a niche emerging sector.
Traditional industries still drive enforcement
Despite the growing focus on technology, CAK’s work remains heavily tied to conventional sectors.
The authority continued investigating competition concerns in industries including steel, retail, finance, cement and animal feed. These markets directly affect construction costs, food production and household spending.
AI and digital platforms therefore represent an expanding layer of enforcement rather than a replacement for CAK’s traditional workload.
The central challenge is that technology can amplify established forms of misconduct. Price-fixing, misleading sales practices and unfair trading conditions are not new, but digital systems can make them faster, more widespread and harder to trace.
What comes next will depend on whether CAK can convert its technology investments into stronger cases. Its digital laboratory, upgraded systems and focus on AI could improve enforcement, but the authority will also need technical expertise, clear legal standards and cooperation with other regulators as Kenya’s markets become increasingly data-driven.
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