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Fifth Annual African Dialogue Consumer Protection Conference

September 10-12, 2013 ● Livingstone, Zambia

Consumer Protection and Competition Remedies And The Impact On Consumers And

Businesses :How Do We Find Solutions.

September, 2013

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Introduction

•Consumer protection and competition laws provide a broad range of statutory (legal) rights, warranties, obligations and remedies.

•Remedies is a means by which the violation of a right is prevented, redressed and/or compensated.

•Remedies can be enforced by a court of law when injury or harm is imposed upon another individual or expressed by a particular statute.

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Consumer Protection and Competition Remedies in Tanzania

• Consumer Protection and Competition remedies are issued by courts of law and the Fair Competition Commission which, is entrusted to administer Fair Competition Act,2003( FCA).

•However, consumer protection remedies are scattered in various legislation enacted to serve other matters but also protect the consumers i.e The Merchandise Marks Act,1963; The Sale of Goods Act1931,The Food,Drugs andCosmetics Act,2003 etc.

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Competition Remedies under FCA.

•The remedies available under competition provisions of the FCA range from pecuniary remedies such as compensatory orders, damages such as compliance orders, injunctions and/or interim orders, adverse publicity of orders by respondents and fines.

•Compliance orders and compliance agreements may require the respondent to refrain from conduct in contravention of the FCA or take actions to comply with the FCA(section 57).

•The order shall state the time within which it shall be complied with as well as its duration.

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Competition Remedies under FCA cont.

• In the case of Fair Competition Commission vs The Bank of Africa, the Bank(respondent) was issued with compliance order for failure to notify a merger. It was also, required to publish a notice of compliance to the public(in a newspaper with wide circulation) and expressing to the public on how it acted contrary to the provisions of the FCA.

• The compensatory orders may require the respondent to pay money; to supply goods or services for specified time and conditions.

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Competition Remedies under FCA cont.

•an order declaring void, terminating or varying a contract and an order requiring the respondent to pay the costs of the applicant or of any person appearing at the hearing or producing documents(section 59).

•A fine of not less than five per cent of respondent’s turn over and not exceeding ten per cent of his annual turnover can be imposed on him. Additionally, the Commission is empowered to impose fines on every person who at the time of the commission of the offence was a director, manager or officer of the body corporate convicted of the offence (section 60).

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Consumer Protection Remedies under FCA

• The FCA requires the goods to be of merchantable quality;the consumer to undertake their duties;sellers and manufacturer’s to adhere to implied conditions and warranties, among others.

• The services to be carried out with care and skill (Part III-XII,XIV).

• The seller commits breach of contract when he does not perform his obligations, infringes statutory rights, conditions and warranties. Hence, consumers are entitled to remedies.

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Consumer Protection Remedies under FCA cont.

•The remedies available pertaining to supply of goods, provision of services and misleading and deceptive conduct include but not limited to:-

• refunds, replacement and repair of the goods.

• the supplying of the services again or the payment of the cost of having the services supplied again.

• compliance and compensatory orders.

• Quit possession of the goods or title by the consumers etc.

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Consumer Protection Remedies under FCA –salient features to note.

• the remedies to consumers are limited to an act of default of a person, damage of the goods by using them in a way they were not meant to be used etc.

• the Consumers can be refunded within “reasonable time after purchase” -the issue is how long is the reasonable time.

• the limitation period to an action is three years after the day on which the cause of action accrued.

• the consumers are required to recover loss or damages through action in a court of competent jurisdiction( Part VI and VII).

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The challenges

• In Tanzania, there are specific and general consumer protection remedies set out in various legislation which, makes it difficult for the consumers to pursue their rights and businesses to meet compliance costs.

• It is costly for consumers to recover a loss or damage through action in a court of competent jurisdiction as it is provided for under Part VI and VII of FCA.

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The Impact On Business and Consumers

• Remedies such as fines, injunctions, litigations by individuals(consumers or competitors),class actions as a result of liability in contract or tort, instituted against businesses, brings about costly disputes with consumers thus, creating burdensome for businesses.

• Generally, consumers do not directly benefit from competition remedies which, focus on behavioural and structural change of the market, because their effect to consumer protection take longer than consumer remedies.

• With regard to consumers, litigation may be costly to the extent of denying them right to redress.

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• The underlisted factors may bring about solutions to the current situation:-

• Put in place mechanisms for dispute resolution which are cheap, accessible and quick, that will save time for consumers and businesses ie ADR.

• Simplify and clarify consumer and competition laws to reduce business compliance costs as well as empower consumers to make informed decisions in the market place. This can be done through law reforms and education programmes.

• Encourage businesses to come up with strong Code of Conduct through self-Regulation initiatives.

Conclusion : How Do We Find Solutions

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References

• Australian Competition and Consumer Commission: Warranties and Refunds : A guide for Consumers and Businesswww.accc.gov.au/...competition

• The Fair Competition Act, 2003.• http://www.gov.uk/government accessed on 06/08/2013 • www.autralian competitionlaw.org/overview.html accessed on

17/07/2013• http://www.clasf.org/ComPLRev/Issues/

voi3Issues2ArtHaracoglou.pdf Accessed on 17/08/2013• http://www.oft.gov.uk/shared_oft/business_leaflets/general/

oft.911.pdf acessed on 14/07/2013

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Thanks for your attention

Martha M. Kisyombe

[ Head –Consumer Protection Department ]

www.competition.or.tz