Malawi Competition Law Enacted: CFTC Gains Enhanced Powers

Malawi's competition law landscape has undergone a significant transformation with the enactment of the Competition and Fair Trading Act, 2024, which repealed its 1998 predecessor. This new legislation, effective July 1, 2024, substantially enhances the regulatory and enforcement powers of the Competition and Fair Trading Commission (CFTC). Key reforms include the introduction of mandatory and suspensory merger notification thresholds, the explicit power for the CFTC to impose administrative monetary penalties of up to 10% of annual turnover for companies, and expanded provisions for consumer protection and the regulation of anti-competitive practices. These changes necessitate a thorough review of compliance strategies for all enterprises operating within or affecting the Malawian market.

The regulatory framework governing competition and fair trading in Malawi has recently experienced a profound overhaul, marking a new era for market conduct and consumer protection in the country. On July 1, 2024, the much-anticipated Competition and Fair Trading Act, 2024 (the "2024 Act") officially came into force, repealing the long-standing Competition and Fair Trading Act, 1998 (the "1998 Act"). This legislative update is a critical development for legal practitioners and businesses alike, as it significantly strengthens the mandate and enforcement capabilities of the Competition and Fair Trading Commission (CFTC), the primary regulatory body in this domain.

The enactment of the 2024 Act reflects Malawi's commitment to aligning its competition and consumer protection laws with international best practices and addressing the evolving dynamics of its economy. The new legislation introduces a robust set of provisions designed to foster a more competitive market environment, curb anti-competitive trade practices, and enhance consumer welfare. For legal professionals advising clients with interests in Malawi, understanding these changes is paramount to ensuring compliance and navigating the updated regulatory landscape effectively.

The Competition and Fair Trading Commission (CFTC) was initially established under the Competition and Fair Trading Act of 1998, with a broad mandate to regulate, monitor, control, and prevent acts or behaviours adversely affecting competition and fair trading in Malawi. However, the 1998 Act faced criticism for certain limitations, particularly regarding the CFTC's enforcement powers. A pivotal moment that underscored these deficiencies was the 2023 High Court ruling in *Airtel Malawi Plc v Competition & Fair Trading Commission, Civil Appeal Cause No. 17 of 2023*. This judgment determined that the CFTC lacked the statutory authority under the 1998 Act to directly impose administrative fines on infringing parties, significantly weakening its regulatory teeth.

Recognizing these shortcomings and the need for a more effective regulatory framework, the Malawian Parliament passed the Competition and Fair Trading Act, 2024, which received presidential assent in May 2024 and commenced on July 1, 2024. The 2024 Act aims to encourage competition, prohibit anti-competitive trade practices, regulate monopolies and concentrations of economic power, protect consumer welfare, and strengthen the efficiency of production and distribution of goods, digital products, and services. It specifically addresses the lacuna identified in the *Airtel Malawi Plc* case by granting the CFTC explicit powers to issue administrative orders, including monetary penalties.

The Competition and Fair Trading Act, 2024, introduces several critical changes that significantly impact how businesses operate in Malawi. Foremost among these is the CFTC's newfound power to impose substantial administrative monetary fines. Under the new Act, the Commission can levy penalties of up to 5% of annual turnover for individuals and up to 10% of annual revenue for companies found in violation of the Act. This is a stark departure from the previous regime and provides the CFTC with a much stronger deterrent against anti-competitive conduct and unfair trading practices. Beyond fines, the CFTC can also issue orders for redress, such as instructing refunds, exchanges, returns of defective products, and the termination of unfair contracts.

Another pivotal reform lies in merger control. The 1998 Act provided for voluntary notification of mergers and acquisitions, which often meant that potentially harmful transactions could proceed without prior scrutiny. The 2024 Act, however, introduces a mandatory and suspensory merger notification regime, requiring prior approval from the CFTC for transactions that meet specific financial thresholds. A merger must now be notified if the combined annual turnover or combined value of assets of the merging parties in, into, or from Malawi equals or exceeds MWK 10 billion, or if the annual turnover of the target undertaking in, into, or from Malawi equals or exceeds MWK 5 billion. The merger filing fee is set at 0.5% of the combined annual turnover or total assets derived from Malawi, whichever is higher. The Act also introduces a public interest test that the CFTC must apply when evaluating mergers, considering factors such as the effect on specific industrial sectors, employment levels, and the saving of failing firms.

The 2024 Act also broadens the scope of consumer protection and anti-competitive practices. It expands the definition of "consumer" to offer greater protection, particularly for users of technology and digital products. New provisions address various unfair trading practices, including misleading conduct, unconscionable conduct, failure to disclose material information, and the imposition of unfair terms in consumer contracts. The Act explicitly prohibits restrictive business practices such as price-fixing, market sharing, bid-rigging, and abuse of a dominant position, which includes predatory conduct, discriminatory conduct, and exclusive dealing arrangements. Furthermore, the new legislation addresses the abuse of buyer power, a significant addition that tackles issues like unjustified payment delays and unilateral termination of commercial relationships by powerful buyers.

Recent enforcement actions by the CFTC demonstrate its proactive stance under the new regime. For instance, in May 2026, the Commission ordered six companies to pay administrative monetary fines totaling MWK 361 million and refunds exceeding MWK 126 million for various violations. Notable cases include fines imposed on FDH Bank plc and Standard Bank plc for unfair consumer practices, misleading conduct, and unconscionable conduct, such as unilaterally extending loan periods or altering insurance terms. The CFTC has also fined companies like RAB Processors Limited and Topmax Enterprises Limited for excessive and exploitative pricing, highlighting its focus on market fairness and consumer welfare. While the 2024 Act strengthens enforcement tools, the CFTC acknowledges that the law is still maturing, leading to new interpretive challenges that require close alignment between Parliament, the judiciary, and the Commission.

The enactment of the Competition and Fair Trading Act, 2024, represents a monumental shift in Malawi's regulatory landscape for competition and consumer protection. Legal practitioners must recognize the profound implications of this new legislation, particularly the CFTC's enhanced powers to impose administrative fines and the introduction of mandatory, suspensory merger notification thresholds. Businesses operating in Malawi, or those contemplating transactions with a Malawian nexus, must urgently review their compliance frameworks to align with the stringent requirements of the 2024 Act and its subsidiary regulations, such as the Competition and Fair Trading (Thresholds for Proposed Mergers) Notice, 2024, and the Competition and Fair Trading (Fees) Regulations, 2024.

Going forward, vigilance will be key. Practitioners should closely monitor the CFTC's enforcement trends, particularly in areas like exploitative pricing, unfair trading practices, and merger reviews, as these will shape the interpretation and application of the new law. Proactive engagement with the CFTC's guidelines and a thorough understanding of the expanded definitions and prohibitions are essential to mitigate legal risks and ensure a competitive and fair market for all stakeholders in Malawi.