The new Trade Practices and Consumer Protection Proclamation Ethiopia come into effect in Ethiopia in August 2010. The Trade Practices and Consumer Protection Authority is the regulatory body which also have judicial mandate, oversees the implementation of the law. The law regulates trade practices by protecting businesses from anti-competitive and unfair trade practices to ensure a competitive business environment.
- Trade Practice and Consumers’ Protection Proclamation No. 685/2010 or 685/2000EC (Download)
It protects business from unfair competition by prohibiting acts that cause confusion and other acts that are against honest commercial practices, puts a restriction on market dominance by prohibiting agreements to the effect of fixing price, collusive tendering and sale by quota. It also prohibits agreements between businesses in vertical relationship with the object of setting minimum retail prices. Mergers are regulated for possible significant hindrance to competition and require notification and permission from the Trade Practices and Consumer Protection Authority.
The law seeks to protect consumers by preventing the circulation of goods and services that could put at risk the health and safety of consumers and ensuring their suitability for human consumption. It also tries to create the possibility that consumers get goods and services commensurate to the price they pay. The law also governs commercial activities outside of Ethiopia, if the transaction has a local effect.
According to Part three of the proclamation, consumers have rights to;
- Get sufficient and accurate information of the quality and type of goods and service;
- Selectively buy goods or services;
- Not to be obliged to buy for the reasons that he looked into quality or options of goods and services or he made price bargain;
In case of infringement upon these rights, the consumer can submit his complaints to the Authority for adjudication. The consumer also has the right to claim compensation for damage he suffers because of transactions in goods and services.
In protecting consumer rights, the law imposes several duties on the merchant. Businesses are obliged to disclose their trade names, issue receipts and keeping their pad, supply sufficient information relating to good and services it sale whenever requested by the consumer, display price of goods and services by affixing a price tag in a conspicuous place in the business premise.
Another obligation is putting labels on the goods to be sold or providing them to the consumer on separate paper. Business should insure that commercial advertisements are not false or misleading, particularly of the details on the labels.
Consumers have protection from defective goods or services. They have the right to demand replacement of goods or refund within 15 days from the date of purchase. Where services purchased are defective, the business person is obliged to deliver the service again to the consumer free of charge or refund the paid amount within 15 days from the date of purchase of service. This protection applies even when there is no written contract. The obligations imposed on the business person are mandatory and cannot be waived by agreement.
Violation of the prohibiting provisions of the proclamation has far reaching consequences for businesses. It can lead to administrative, civil action and criminal prosecution.
Article 49 of the proclamation imposes severe penalties on business persons and businesses that are found in violation of prohibited acts, for instance, acts of abuse of dominance is punishable with 15 % of annual income or 500,000-1,000,000 where it’s impossible to ascertain annual income, and 5 to 15 years rigorous imprisonment.
Price fixing, collusive tendering, sale by quota and setting minimum price is punishable with 20% of annual income or 1,000,000-2,000,000 where annual income cannot be determined, and 5-10 years of rigorous imprisonment. Unfair and misleading acts are punishable with 10-20 years of rigorous imprisonment.
Trade Practices and Consumers Protection Authority
Radio Fana Building, Opposite Black Lion Hospital