Competition and Fair Trading Commission Malawi Enhances Enforcement Powers

Malawi's competition law landscape has undergone a significant transformation with the enactment of the Competition and Fair Trading Act of 2024, which came into force on July 1, 2024. This new legislation repeals and replaces the 1998 Act, substantially strengthening the powers of the Competition and Fair Trading Commission (CFTC) to address restrictive business practices and unfair trading. The amendments grant the CFTC explicit authority to impose administrative monetary penalties, a power previously challenged in court, and introduce mandatory merger notification, expanded consumer protection, and provisions against abuse of buyer power. These changes signal a more robust enforcement regime aimed at fostering a competitive and fair market environment in Malawi, with recent enforcement actions by the CFTC demonstrating its proactive stance.

The regulatory framework governing competition and fair trading in Malawi has recently experienced a pivotal overhaul, marking a new era for businesses operating within the jurisdiction. Effective July 1, 2024, the Competition and Fair Trading Act of 2024 (CFTA 2024) officially replaced its 1998 predecessor, introducing far-reaching amendments designed to enhance market competition and consumer protection. This legislative evolution directly addresses identified gaps and enforcement challenges that previously constrained the Competition and Fair Trading Commission (CFTC), the primary regulatory body in this domain.

The enactment of CFTA 2024 is particularly significant for its impact on the enforcement of restrictive business practices. The new Act empowers the CFTC with explicit authority to impose substantial administrative monetary penalties and introduces mandatory merger notification, among other critical provisions. This article delves into the implications of these legislative changes, examining the types of restrictive business practices prohibited, the CFTC's enhanced enforcement capabilities, and recent cases that underscore the Commission's commitment to a more vigilant regulatory environment. For legal practitioners, understanding these developments is crucial for advising clients on compliance and navigating the evolving competition law landscape in Malawi.

Competition law in Malawi is primarily governed by the Competition and Fair Trading Act, which establishes the Competition and Fair Trading Commission (CFTC). The CFTC, operational since 2005, is mandated to regulate, monitor, control, and prevent acts or behaviours that adversely affect competition and fair trading in Malawi. Prior to the 2024 Act, the Competition and Fair Trading Act of 1998 (Cap. 49:06) served as the foundational legislation, prohibiting anti-competitive trade practices and providing for consumer protection.

Under the previous regime, the CFTA 1998 broadly prohibited agreements, decisions, and concerted practices that were likely to prevent, restrict, or distort competition to an appreciable extent. These included practices such as price-fixing, market sharing, limiting production, bid-rigging, and abuse of a dominant position. Cartels, in particular, were considered *per se* prohibited. However, a significant challenge emerged in 2023 when the High Court of Malawi, in *CFTC v Airtel Malawi Plc*, Civil Appeal Cause No. 17 of 2023, ruled that the CFTC lacked the statutory power under the 1998 Act to impose administrative fines for contraventions. This ruling highlighted a critical enforcement gap, necessitating legislative intervention to bolster the Commission's regulatory efficacy.

The Competition and Fair Trading Act of 2024 directly addresses the limitations of the previous Act, particularly concerning the CFTC's enforcement powers. A key amendment grants the Commission express authority to issue administrative orders, including financial penalties of up to 5% of annual turnover for individuals and up to 10% of annual turnover for companies found in violation of the Act. This legislative enhancement directly overturns the *Airtel Malawi Plc* judgment, providing the CFTC with a robust deterrent against anti-competitive conduct and unfair trading practices. The new Act also expands the definition of 'consumer' and introduces specific provisions to address the abuse of buyer power, which was largely unaddressed by the 1998 Act.

Restrictive business practices under the CFTA 2024 continue to encompass a broad range of anti-competitive behaviours. These include horizontal agreements such as price-fixing, market allocation, and bid-rigging, which are considered *per se* prohibitions. Vertical restraints, such as exclusive dealing arrangements, tying and bundling, and resale price maintenance, are also scrutinised. Furthermore, the abuse of a dominant position remains a core focus, prohibiting actions like imposing unfair purchase or selling prices, limiting production or market access, refusing to supply, and engaging in predatory behaviour. The expanded scope and clearer definitions in the 2024 Act are intended to provide greater certainty for businesses and stronger tools for the CFTC.

Recent enforcement actions by the CFTC illustrate its proactive approach under the strengthened legal framework. In May 2026, during its 75th meeting, the Commission adjudicated 14 cases, imposing administrative monetary fines totaling MK361 million and ordering refunds exceeding K126 million to consumers. Notable cases include penalties against FDH Bank plc and Standard Bank plc for unfair consumer practices, misleading conduct, and supplying defective products and services. The banks were ordered to pay significant fines and rectify their policies, with FDH Bank plc specifically ordered to refund K120 million in over-deductions on keyman insurance. While some cases, like that against United General Insurance concerning alleged restrictions on Toyota Plus Insurance, were closed due to insufficient evidence, the overall trend indicates a heightened level of scrutiny and enforcement. These decisions highlight the CFTC's readiness to utilise its enhanced powers to ensure market fairness and protect consumer interests across various sectors.

The introduction of mandatory and suspensory merger notification, based on determined thresholds, is another critical change. This shifts from the previous voluntary notification regime, ensuring that mergers and acquisitions with potential anti-competitive effects are reviewed by the CFTC before implementation. This proactive measure aims to prevent the creation or strengthening of dominant positions that could harm competition. The CFTA 2024 also empowers the Commission to conduct market inquiries and studies, further enhancing its ability to identify and address systemic competition issues.

The enactment of the Competition and Fair Trading Act of 2024 represents a landmark development in Malawi's competition law regime, ushering in an era of more vigorous enforcement against restrictive business practices and unfair trading. The explicit empowerment of the CFTC to impose administrative fines, coupled with expanded definitions of anti-competitive conduct and consumer protection, significantly strengthens the regulatory landscape. Practitioners must be acutely aware of these changes, particularly the mandatory merger notification requirements and the increased penalties for non-compliance.

Moving forward, businesses in Malawi should review their practices to ensure full compliance with the enhanced provisions of the CFTA 2024. The CFTC's recent enforcement actions signal a clear intent to actively monitor and penalise anti-competitive behaviour. Legal professionals are advised to guide clients on developing robust internal compliance programmes, conducting thorough competition audits, and diligently assessing merger transactions to mitigate legal and financial risks in this evolving regulatory environment. The focus on abuse of buyer power and expanded consumer protection also necessitates a broader understanding of market conduct beyond traditional cartel and dominance issues.