Engineers Face Hefty Fines Over ‘Price-Fixing’ Attempt

The Engineers Board of Kenya (EBK) is risking hefty financial penalties or criminal prosecution following its recent push to set minimum fees for engineering services in the country.

EBK has found its way into the black book of the Kenyan competition watchdog after issuing a gazette notice inviting members of the public to comment on the proposed Engineers (Scale of Fees for Professional Engineering Services) Rules, 2021.

The proposed minimum fees, the engineers’ body said, will prevent price undercutting among professional engineers, thereby ensuring quality engineering services.

“(The rules will) address the challenge of collapsing of buildings… as the public will be aware of the professional engineering services and the importance of engaging professional engineers,” EBK chief executive Margaret Ogai said in a notice.

The Competition Authority of Kenya (CAK) is, however, unhappy with the proposal – which it says amounts to killing competition and making engineering services expensive.

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The market watchdog says such a move infringes on the Competition Act, 2012 and could attract a fine of up to 10% of an entity’s previous year’s gross annual turnover, a fine of Sh10 million and a jail term of up to five years.

Reduce competition

Section 21 of the CAK Act forbids organisations from setting up deals that could prevent, distort or reduce competition unless they obtain an exemption from the watchdog.

The Act also criminalises strategies that fix purchase or sale prices or any other trading conditions relating to goods and services as well as minimum resale price maintenance.

In an advisory on Oct. 5, CAK said bodies such as the Institute of Certified Public Accountants and the EBK could be engaging in price fixing by setting minimum service rates.

“It has come to the attention of the Competition Authority of Kenya of a renewed momentum by various professional associations seeking to set minimum chargeable prices or fees for their members without observing the requisite provisions of the Competition Act,” CAK said.

The watchdog said the proposed setting of minimum fees was only meant to quench competition among members of the professional associations to the detriment of customers.

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