Kenya Investigates Multinational Companies in Alleged Abuse of Power in Transport Sector

Competition Authority launches probe into claims of market dominance abuse by global shipping giants

The Competition Authority of Kenya (CAK) has launched a comprehensive investigation into allegations that multinational companies are abusing their dominant market position in the country’s transport and logistics sector, potentially stifling local competition and discriminating against Kenyan businesses.

Background of the Investigation

The probe follows a formal complaint filed by the Kenya Transporters Association (KTA), which represents local road transport operators across the country. The KTA has accused multinational companies, particularly in the shipping and logistics sector, of engaging in discriminatory practices that effectively lock out local firms from lucrative contracts.

According to a summary update released by the Competition Authority on June 30, 2025, the investigation centers on several key allegations against multinational companies operating in Kenya’s transport sector.

Key Allegations

The KTA’s complaint outlines four primary concerns about multinational companies’ operations in Kenya:

Limited Local Participation: Multinational companies are accused of bypassing local firms in logistics and warehousing service contracts, effectively excluding Kenyan businesses from participating in their own country’s economy.

Investment Disparity: The complaint alleges that these global companies fail to make substantial investments in Kenya, despite generating significant revenue from the local market.

Uneven Economic Impact: Local transporters claim that multinational companies’ operations do not provide proportional economic benefits to the Kenyan economy.

Unfair Business Practices: The KTA has specifically called out shipping lines for engaging in practices that disadvantage local operators.

Anti-Competitive Practices Under Investigation

The Competition Authority has identified six specific business practices that may violate Kenya’s Competition Act:

1. Exclusive Contracts: Agreements that prevent local companies from accessing business opportunities
2. Discriminatory Practices: Different treatment of local versus international service providers
3. Barriers to Entry: Artificial obstacles that prevent Kenyan firms from entering the market
4. Anti-Competitive Agreements: Deals that restrict fair competition
5. Predatory Pricing: Pricing strategies designed to eliminate local competitors
6. Lack of Transparency: Insufficient disclosure of business practices and contract terms

Companies Under Scrutiny

The investigation has sent information requests to major international shipping and logistics companies operating in Kenya, including:

• Maersk Shipping Company
• Mediterranean Shipping Company
• Pacific International Line (PIL)
• CMA CGM
• Evergreen
• China Ocean Shipping Company
• Hapag-Lloyd
• ONE (Ocean Network Express)
• Yang Ming
• HMM
• MESSINA

These companies represent some of the world’s largest shipping and logistics operators, many of which have significant operations at Kenya’s Port of Mombasa, the region’s primary maritime gateway.

Parliamentary Pressure

The investigation has gained momentum following pressure from Members of Parliament, who have demanded action against multinational companies allegedly exploiting local truckers and transport operators. Thousands of Kenyans are facing joblessness because of alleged dealings, according to recent parliamentary discussions.

Faced with renewed scrutiny from lawmakers, Kemei revised his earlier deadline, promising to fast-track the process. “Given the public interest and the committee’s request, the Authority will endeavour to conclude the investigation by September 30, 2025,” he assured the committee.

The National Assembly’s Committee on Trade, Industry, and Cooperatives has been particularly vocal in pushing for the investigation, following complaints by the Kenya Transporters Association (KTA) which claimed unfair treatment and discrimination of local investors in the transport and logistics sector by multinational companies.

Legal Framework and Authority

The Competition Authority is conducting its investigation under Section 31 of the Competition Act, which grants it the power to investigate conduct that may constitute an infringement of prohibitions relating to restrictive trade practices or abuse of dominance in any market within Kenya.

The investigation follows established procedures outlined in Sections 31 to 36 of the Competition Act, as well as principles of fair administrative action as set out in Article 47 of the Constitution of Kenya, 2010, and the Fair Administrative Action Act, 2015.

Current Status and Timeline

The Authority has already begun interviewing various stakeholders and collecting evidence relevant to the investigation. A legal and economic analysis of the evidence is currently underway, with a progress report containing recommendations being prepared for the Committee.

The investigation is examining several key areas:

• Volumes of containerized cargo handled by different operators
• The role of trucking companies in the logistics chain
• Key constraints affecting local businesses in the logistics sector
• Agreements and contracts between multinational companies and local operators

Critical Timeline: The Competition Authority has committed to completing the investigation by September 30, 2025, recognizing the public interest concerns raised by this matter.

Industry Context

Kenya’s transport and logistics sector is crucial to the country’s economy, serving not only the domestic market but also acting as a gateway for landlocked countries including Uganda, Rwanda, Burundi, South Sudan, and parts of the Democratic Republic of Congo. The Port of Mombasa handles the majority of cargo for the East African region, making fair competition in this sector essential for regional economic development.

The investigation comes at a time when Kenya’s government has been balancing the need to attract foreign investment while protecting local businesses from unfair competition. The government reassured the maritime industry that all operators, both local and foreign, would receive licenses for 2025 under previous regulatory criteria, without the new restrictions. “Kenya is a free-market economy and a hub for international investment,” Mudavadi stated, reflecting the delicate balance the government seeks to maintain.

Potential Impact

The outcome of this investigation could have significant implications for Kenya’s transport and logistics sector. If the Competition Authority finds evidence of anti-competitive practices, it could result in:

• Substantial fines for companies found to be in violation of competition laws
• Mandated changes to business practices and contract terms
• Increased opportunities for local transport and logistics companies
• Enhanced transparency requirements for multinational operators
• Potential structural changes to how the sector operates

The investigation represents a significant test of Kenya’s competition enforcement capabilities and could set important precedents for how the country manages the balance between welcoming foreign investment and protecting local business interests.

As the investigation progresses, stakeholders across the transport and logistics sector will be watching closely to see how the Competition Authority addresses these serious allegations of market dominance abuse in one of Kenya’s most critical economic sectors.