The Competition Authority of Kenya (CAK) has imposed an Sh85 million fine on Directline Assurance for abusing buyer power by failing to pay two Nairobi-based auto repair centres on time.
According to the Authority, the insurer, associated with media mogul S.K. Macharia, delayed payments for repair services completed in 2023 and 2024 under its insurance cover. The delays reportedly pushed the small businesses into financial strain, forcing one to scale down operations.
The complaints were filed in May 2024, prompting a detailed investigation by CAK. The probe established that Directline withheld payments far beyond the agreed timelines, violating provisions of the Competition Act that protect suppliers from unfair trading practices by dominant buyers.
In its ruling, the regulator emphasized that late payments by large firms to smaller service providers amount to abuse of buyer power, a growing concern in Kenya’s insurance and retail sectors.
The CAK stated that the Sh85 million penalty serves as both a deterrent and a reminder that companies must honour contractual obligations promptly. It also directed the insurer to settle all outstanding payments and adopt measures ensuring timely transactions in future.
This marks one of the largest fines issued by the Authority in recent months as it steps up efforts to protect small and medium enterprises from unfair business practices by larger market players.
