Introduction

In a competitive economy, commercial success is neither unlawful nor something that competition law seeks to prevent. Businesses are expected to grow, gain customers, increase their market shares and become more efficient. The legal concern arises when a business possessing substantial market power uses that position in a manner capable of harming the competitive process or exploiting customers.

1. Purpose of the Regulation

The Fair Competition (Abuse of Dominant Position) Regulations, 2026, published under Government Notice No. 244 of 2026, the principal objective of the regulation is to regulate abuse of dominant position and preserve effective competition, consumer welfare and fair opportunities for market participation.

That, the regulations should therefore not be understood as a prohibition against successful business since Success in the marketplace is not prohibited; what is prohibited is the use of market power in a manner that harms competition or consumers. This principle provides the foundation for understanding both the purpose of the Regulations and their practical implications for businesses operating in Tanzania.

2. What is a Dominant Position?

A dominant position does not simply mean that a business is successful or has many customers. It concerns the ability of an undertaking to exercise substantial market power.

Under the amended framework, a person may be regarded as occupying a dominant position where, acting alone or together with another person, it can profitably and materially restrain or reduce competition for a significant period and its share of the relevant market exceeds 40%. The 2026 Regulations further require the FCC to consider the wider circumstances of the market rather than treating market share as an automatic conclusion of dominance.

3. What is Abuse of Dominant Position?

Abuse of dominant position occurs where an undertaking that possesses dominance uses that position in a manner that harms the competitive process or exploits customers.

Regulation 5 of the 2026 Regulations provides the relevant threshold, once dominance is established, conduct may constitute abuse where it has the purpose, effect or likely effect of exploiting customers or preventing, restricting or distorting competition.

4. What Constitutes Abuse of Dominant Position?

 The regulation identifies a number of practices that may attract scrutiny as follows

• Unfair purchase or selling prices and trading conditions
• Predatory pricing
• Margin squeeze and cross-subsidization
• Refusal to deal
• Denial of access to essential facilities
• Tying and bundling
• Unjustified price or trading-condition discrimination
• Loyalty discounts or rebates that harm competition
• Abuse of intellectual property rights and
• Contractual conditions unrelated to the subject matter of the agreement.

5. What does predatory pricing mean?

Predatory pricing generally occurs where a dominant undertaking deliberately sets prices at an excessively low level, potentially below an appropriate measure of cost, with the objective or likely effect of driving competitors from the market or preventing effective entry, followed by the possibility of recovering the losses through higher prices or other restrictive conduct.

For example, imagine a dominant digital-service provider competing with a smaller entrant, the dominant provider could temporarily reduce its prices to a level that the smaller competitor cannot sustainably match. If the strategy succeeds in weakening or eliminating the competitor and the dominant undertaking can subsequently increase prices, consumers may ultimately face less choice and higher prices.

The important point is that low prices are not automatically predatory. Low prices can be the result of legitimate competition, efficiency or innovation and may benefit consumers. The concern arises where pricing forms part of a strategy capable of excluding competitors and subsequently harming competition.

6. Case study on how Kenya approach abuse of Dominance?

Tanzania’s approach is not isolated. Similar principles exist in other established competition regimes.

In Kenya, the Competition Act prohibits abuse of a dominant position. The Competition Authority of Kenya explains that dominance is not itself prohibited; rather, the concern is the abuse of that position. Examples include unfair prices or trading conditions, restrictions on production or market access, discriminatory conditions and other exclusionary practices.

Kenya’s guidelines also distinguish between exploitative abuse, which may harm customers or suppliers, and exclusionary abuse, which may eliminate or weaken competitors, Predatory pricing and unjustified refusal to deal are among the practices that may be assessed as exclusionary conduct.

7. Concluding observations

Particular attention should be given to markets characterized by high barriers to entry, significant customer dependence or control over essential infrastructure to include Telecommunications and digital markets, Energy, Transport, Financial services, and Digital and technology markets.

This does not mean that firms in these sectors are presumed to be dominant or abusive. Rather, the economic characteristics of these markets make the consequences of exclusionary or exploitative conduct potentially more significant that’s why attention