Uganda’s recently passed Competition and Consumer Protection Act still awaits Presidential assent and coming into force. However, a recent positive resolution of an impasse relating to a Presidential directive in the media industry is a good sign for the coming law.
Background
After several stalled attempts spanning over a decade, Uganda passed the Competition and Consumer Protection Act on 25 May 2023. The primary goal of the Act is to control anti-competitive behaviour by firms that is having a negative impact on Uganda’s market. The Act applies to all economic activities in Uganda and binds the government or an enterprise owned wholly or in part by the government, that engages in trade or business for the production, supply or distribution of goods or the provision of a service within a market that is open to participation by other enterprises.
The Act establishes the Competition and Consumer Protection Commission as an independent regulator to administer the law. It proscribes anti-competitive behaviour and requires notifications of mergers and acquisitions.
Uganda Broadcasting Corporation: a test case?
Uganda Broadcasting Corporation (“UBC”) is a state-owned broadcasting company. It is licensed by the telecommunications regulator and competes with a multitude of private broadcasters. As fate would have it, UBC has not fared well and sought the intervention of the president to help turn around its fortune.
In March this year, even as the Competition and Consumer Protection Bill was working its way through parliament, the president directed that all government advertising would be done solely through UBC and that any accounting officer disobeying the directive would face dismissal. This directive was promptly relayed by the Ministry of Finance to all accounting officers, with the addition that print media advertising would also have to be done through the majority state-owned New Vision Printing and Publishing Company Ltd.
This directive was contrary to the government’s long-standing policy of liberalisation of the economy, and it was not clear whether the directive received the approval of cabinet as would be required for a change of government policy. The constitution obligates the government to give the highest priority to enacting legislation to enhance the right of the people to equal opportunities in development. In addition, the communications sector under which UBC is regulated is one of the few with sector-specific competition regulations.
As can be expected, the directive drew loud protests from private media houses, represented by the National Association of Broadcasters and the Editors Guild, who announced a ban on all coverage of government news pending a meeting with the president. Following this meeting, the directive was reversed with the president reaffirming the need for government to support the private media as well.
It would be inaccurate to refer to this UBC directive as a test case as the Act is yet to take effect and the necessary administrative structures are far from being established. However, the resolution of the matter in favour of fair competition principles sends a very strong signal to the market on the government’s commitment to competition and a private sector-led economy.
Would the Competition and Consumer Protection Act have helped?
The answer to this would be yes. During the debate on the Competition and Consumer Protection Bill in parliament, the deputy speaker said “Attorney-General, when we finish this law – the playing field when you are doing business with Government is where the biggest concern is. A very recent example is the President’s recent directive on advertisements for UBC. If we have this law, I hope we shall respect it and be serious.”
The scope of the Act covers the activities of state-owned enterprises. It prohibits agreements or practices with respect to the provision of services that cause or are likely to cause an adverse effect on competition in the market. The withholding of government business from private media would be void under the new law. The Competition and Consumer Protection Commission would be empowered to direct the discontinuation of such practice and payment of a fine by the enterprise and its officials. In addition compensation could be ordered for any aggrieved parties.
Conclusion
Even as we await the coming into force of the new law, the resolution of the UBC matter in favour of competition principles is reassuring. There will be a need for the law to be kick-started with a lot of awareness campaigns for all players in the economy including the government.
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Read the original publication at ENSafrica.
