S.K Macharia’s owned Directiline Assurance fined Sh85million for abusing buyer power
Media mogul and Royal Media Services (RMS) chairman S. K Macharia’s owned Directline Assurance has been fined ShSh85,019,847.32 by the Competition Authority of Kenya (CAK) for abusing its buyer power over two Nairobi-based automobile repair SMEs, marking one of the most significant enforcement actions against unfair commercial practices this year.
The penalty follows complaints from Kilele Motors and Midland Autocare, which accused the insurer of repeatedly delaying payments for repair services delivered in 2023 and 2024.
At the time the complaints were lodged, the company owed two clients, who had made separate complaints, Sh7.6 million and Sh5 million respectively.
CAK imposed the hefty penalty against Directline after determining that the insurer abused its buyer power in dealings with the SMEs garages and ignoring 19 reminders.
The action places Directline Assurance fined among the most notable enforcement decisions this year.
Kilele Motors and Midland Autocare were contracted by Directline to provide services including panel beating, spray-painting and mechanical repairs on insured motor vehicles.
The firms told the regulator that Directline failed to honour agreed payment timelines, leaving them with unpaid invoices totalling Sh5,038,094 for Kilele and Sh7,616,456 for Midland at the time the complaints were lodged.
Following the complaints, CAK initiated an Abuse of Buyer Power (ABP) investigation, a process guided by Sections 2 and 24A(4) of the Competition Act and the Authority’s Buyer Power Guidelines, 2022. The Authority first assessed whether Directline held a superior bargaining position and then evaluated whether that position had been abused. The findings confirmed both elements.
According to CAK, Directline Assurance ignored at least 19 formal reminders to clear pending payments, including letters, emails and follow-up calls despite being granted several opportunities to respond under the Fair Administrative Action Act.
While the insurer later made partial payments, the Authority reported that outstanding balances of Sh1,343,331 remained for Kilele and Sh4,719,904 for Midland. Directline said the delays were caused by temporary inaccessibility of its bank accounts and stated that it was aware of the importance of timely payments. However, CAK noted that the insurer repeatedly failed to provide updates or respond to communication seeking clarity on the delays.
CAK Director General David Kemei said the ruling highlights the need for equitable supply contracts and transparent business engagements, particularly when large firms deal with SMEs vulnerable to cash flow disruptions.
Beyond the fine, Directline must clear all arrears, amend its supply contracts to include interest on late payments, and refrain from any practices that shift undue costs to suppliers or involve unilateral contract changes.
CAK says the ruling is intended as a strong deterrent to dominant purchasers who exploit smaller vendors, reinforcing the regulator’s commitment to safeguarding fair competition in Kenya’s commercial ecosystem.
Platinum Credit has been ordered to pay Sh400,000 to a Kenyan for sending him loan promos, text messages and calls, using data he never gave them and without his consent.
Samuel Kamau complained to the ODPC that Platinum Credit repeatedly sent him unsolicited marketing calls and messages using his personal data without consent. During the investigation, the company falsely claimed the caller wasn’t their agent, but the ODPC confirmed she was.
The Commissioner found Platinum Credit liable for unlawful data processing, ordered them to pay Sh400,000 in compensation, issued an enforcement notice, and recommended prosecution of its directors for providing false information.
