NAIROBI, Kenya- Safaricom has been hit with an antitrust complaint over its exclusive partnership with the Ziidi Money Market Fund, a joint product with Standard Investment Bank and ALA Capital.
Investor Edwin Dande, in a complaint through IC Law Advocates, accuses the telco of abusing its dominant market position by offering fee-free M-Pesa transactions exclusively to Ziidi users, creating what the complainant calls a “structural disadvantage” for competing funds such as Cytonn and Etica.
The complaint, submitted to the Competition Authority of Kenya (CAK), claims that “Safaricom applies dissimilar conditions by waiving transaction fees for Ziidi Fund clients while imposing fees on clients of other funds for identical M-Pesa transactions.”
The deal enables Ziidi investors to move money in and out of their accounts through M-Pesa at no cost, a privilege Dande argues is only offered to customers of rival funds like Cytonn and Etica.
This, the filing argues, violates Sections 21 and 24 of the Competition Act by distorting competition and limiting market access.
The legal documents further assert that M-Pesa’s 98% market dominance in Kenya makes it an “essential facility” for financial services.
By allegedly favoring its partners through zero-rated transaction terms, Safaricom is said to have “tilted the competitive landscape,” thereby discouraging innovation and investment in the broader fintech ecosystem.
IC Law Advocates is urging CAK to terminate the fee waiver arrangement, impose penalties on Safaricom, and issue interim relief to halt the practice pending full investigation.
“This restriction forecloses competitors’ ability to attract customers on equal terms.”
Dande in his application aver that Safaricom’s ability to dictate terms on the M-Pesa platform significantly influences the viability of services reliant on mobile payments, including money market funds.
