Expert cautions against rushing proposed competition law to regulate digital markets

The bid to update Kenya’s competition law to enhance the regulation of digital markets could backfire on the country's booming startup ecosystem and deter foreign investment if passed without vital market studies, a top competition law expert has warned.
In a virtual submission to the Departmental Committee on Finance and National Planning, Dr. Vellah Kedogo Kigwiru—a competition legal expert and research fellow at the Technical University of Munich—cautioned lawmakers against adopting sweeping amendments via the proposed 2026 Competition (Amendment) Bill without first establishing clear evidence of market failure in Kenya's tech ecosystem.
She told the Committee that Kenya’s amendment to its competition law to regulate digital markets is not occurring in a vacuum, noting that Kenya was in the race to join her peers in enhancing regulation of the digital markets regime. 
“In particular, Kenya is joining an increasing number of countries and economic
communities in regulating competition in digital markets through the establishment of digital
market competition regulations (DMCRs)”, she observed . 
“The Kenyan Parliament, therefore, must consider
global developments and situate its decision within the existing geopolitics of technology
regulation, which influence the extent to which Kenya seeks to develop its digital economy,
establish a strong digital infrastructure, and enhance its global competitiveness in digital trade”, she argued.
Kenya, often dubbed the "Silicon Savannah" of Africa, has attracted major global technology companies like Microsoft, Google, Amazon Web Services, and Meta, all of which have made massive infrastructure investments in data centers, cloud computing, and subsea cables. Local startups and small-to-medium enterprises rely heavily on this infrastructure.
However, Dr. Kigwiru warned that rushing into over-regulation could lead to severe economic side effects.
"Although competition law is critical in opening markets to competition, early market intervention and excessive regulation can have detrimental effects on competition, investment, and innovation, and could undermine the benefits already accrued in Kenya's digital markets," Dr. Kigwiru stated.
Dr. Kigwiru further highlighted how international developments demonstrate the risks of aggressive tech regulation. 
She noted that while the European Union (EU) pioneered strict digital market competition rules through its Digital Markets Act (DMA), the framework has faced significant pushback due to delayed feature rollouts, degraded user experiences, and increased security risks, a stance taken by other emerging economies.
“Other major emerging economies have taken a far more cautious route. India, South Korea, and Brazil recently abandoned or paused their proposed digital competition Bills following pushback from local businesses and concerns over stunting market growth”, she informed the Committee.
“South Korea ultimately decided that its existing fair trade laws were sufficient to investigate digital markets rather than introducing heavy-handed ex-ante legislation”, she added.
Dr. Kigwiru urged the Committee to avoid false positives, a regulatory error where an agency wrongly prohibits benign commercial conduct, leading to heavy compliance burdens.
"To justify the amendments, the Kenyan Parliament must ask, and CAK must show, that the Kenyan 2010 Competition Act is insufficient to address competition concerns in digital markets," she noted, pointing out that the Competition Authority of Kenya (CAK) has yet to publish a comprehensive digital market inquiry to justify these legislative shifts.
Beyond the macroeconomic risks, her analysis identified crucial drafting flaws in the Bill. 
“The Bill introduces broad new concepts such as "strategic market position," "superior bargaining position," and "digital activities" borrowed piecemeal from the EU DMA and the UK's Digital Markets, Competition and Consumers Act (DMCCA)”, she observed. 
She held that by listing specific digital activities such as search engines, app stores, operating systems, and cloud computing directly within the legislation, the Bill risks creating immediate legal confusion and rapid obsolescence as technology evolves. 
Further, she argued, the definition of a "superior bargaining position" overlaps heavily with the regional provisions of the COMESA Competition Regulations and the AfCFTA Competition Protocol, raising questions about legal jurisdiction and forum shopping for regional trade.
Rather than rushing the amendments into law in their current form, she urged the Committee to delete premature categorizations of digital services and step back to conduct a market-wide digital inquiry.
"The Kenyan government and CAK, working together with key stakeholders, should undertake a market-wide digital market study culminating in a background paper to inform stakeholders on why these key amendments are justifiable, taking into consideration domestic, regional, continental, and global developments in digital market regulations," Dr. Kigwiru recommended.
Members of the Committee led by the Chairperson, Hon. Kuria Kimani welcomed her analysis, and lauded her efforts to confine her analysis to broader perspectives covering other emerging markets. 
“We want to thank you for the insightful analysis you have offered this Committee. We find it quite useful because it also highlights the practice in other markets. I particularly find the example of TikTok very insightful. We want to thank you for taking your time to make this presentation”, Hon. Kimani submitted. 
His sentiments were echoed by Committee Members Hon. Peter Kaluma and Hon. Julius Rutto who observed that the insights would help the Committee make progressive recommendations on the Bill.