Trade practice and consumer protection proclamation No.685/2010

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Proclamation No. 685/2010
(Year No. 49 ADDIS ABABA 16th August, 2010)

Whereas, it is necessary that commercial activities must be undertaken in accordance with appropriate practices based on free market economic policy of the country;
Whereas, it is desirable to protect the business community from anti-competitive and unfair market practices, and also consumers from misleading market conducts, and to establish a system that is conducive for the promotion of competitive market;
Whereas, it is necessary to prevent the proliferation of goods and services that endanger the health and well being of consumers, following the expansion of commercial activities, and to ensure their safeness and suitableness to human health in a sustainable manner, and to create the possibility that consumers get goods and services equivalent to the price they pay;
Whereas, it is found important to determine the powers and duties of organs that will be in charge of the responsibility to carry on executive and judiciary activities in order to ensure the implementation of this Proclamation;
Now therefore, in accordance with Article 55(1) of the Constitution of the Federal Democratic Republic of Ethiopia it is hereby proclaimed as follows:
This Proclamation may be cited as “Trade Practice and Consumers’ Protection Proclamation No. 685/2010.”
In this Proclamation, unless the context otherwise requires:
1/ “Basic Goods or Services” mean goods or services related to the daily need of consumers, the shortage of which in the market may lead to unfair trade practice;
2/ “Basic Public Utilities” means utilities such as water, electricity, telephone and the like;
3/“Authority” means Trade Practice and Consumers Protection Authority established pursuant to Article 31 of this Proclamation;
4/ “Consumer” means a natural person who buys goods and services for his personal or family consumption, where the price is being paid by him or another person and not for manufacture or resale;
5/ “Business Person” means any person who professionally and for gain carries on any of the activities specified under Article 5 of the Commercial Code, or who dispenses services, or who carries on those commercial activities designated as such by law;
6/ “Commercial Activity” means any activity carried on by a business person as defined under sub article (5) of this Article;
7/ “Essential Facility” means an infrastructure or resource that cannot easily or reasonably be found, and which is very important to competitors in order to supply their goods and services to their customers;
8/ “Goods“ means movable commodities that are being purchased or sold or leased or by which any commercial activity is conducted between persons except monies in any form and securities;
9/ “Minister” or “Ministry” means the Minister or the Ministry of Trade and Industry;
10/ “Person” means any natural or juridical per son;
11/ “Service” means any commercial dispensing of service for consideration other than salary or wages;
12/ “Unfair Trade Practice” means any act in violation of provisions of trade related Laws;
13/ “Bureau” means regional state trade and industry bureau or another appropriate bureau;
14/ “Importer” means any person who imports goods from abroad via land or sea or air into Ethiopia;
15/ “Exporter” means any person who exports goods abroad via land or air or sea from Ethiopia;
16/ “Wholesaler” means any person who sells goods to a retailer after buying them from a manufacturer or an importer, or when a manufacturer or an importer sells goods to a retailer or to a wholesaler is considered to have been engaged in wholesale business.
17/ “Retailer” means any person who sells goods to consumers or users after buying them from a wholesaler or a manufacturer or an importer, or when a wholesaler or a manufacturer or an importer sells goods to consumers or users is considered to have been engaged in retail business;
18/ “Anti Competitive or Acts Restricting Market Competition” means acts limiting the competitive capacity of other business persons in commercial activities through acts of putting business persons engaged in selling similar goods and services at loss by reduction of prices or through acts of taking over of businesses and technologies of business persons engaged in similar businesses or through act of restricting the entry of other business persons in to market or through acts of restricting the suppliers of goods and services from determining their selling prices or through the tying of the sale of certain goods and services with the sale of other unlike goods and services by limiting the choices of consumers or users or are the acts prohibited under Articles 5, 11, 15 and 21 of this Proclamation and the like;
19/ “Manufacturing Activity” includes any formulation, alteration, and assembling and prefabrication activity carried on by an industry;
20/ “Regulation” means regulation issued to implement this Proclamation;
21/ “Public Enterprise” means an enterprise established in accordance with Public Enterprises Proclamation № 25/1992 or a business organization whose shares are totally owned by the federal government or public enterprise established by a regional state;
22/ any expression in the masculine gender includes the feminine.

This Proclamation has the objectives of:
1/ protecting consumers rights and benefits;
2/ ensuring the suitableness of the supply of goods and services to human health and safety and installing a system of follow up;
3/ ensuring that manufacturers, importers, service dispensers and persons engaged in commercial activities in general carry on their activities in a responsible way;
4/ preventing and eliminating trade practices that damage the interests and goodwill of business persons;
5/ accelerating economic development.
1/ This Proclamation shall apply to all persons carrying on commercial activities and to any transaction in goods and services within the Federal Democratic Republic of Ethiopia.
2/ This Proclamation shall apply to a commercial activity even though conducted outside the Federal Democratic Republic of Ethiopia if its out come has effect in Ethiopia.
3/ This Proclamation shall not, however, apply to:
a) the sovereign act of the state which is exclusive of public enterprises;
b) basic utilities;
c) basic goods and services subject to decision of the Council of Ministers to price regulation;
d) collective agreements applying to
employer and employee relationships.
4/ Without prejudice to the provision of sub article (3) of this Article, the limitations of scope of application provided for under this sub article (3)(b) and (c) shall not apply to matters stated in this Proclamation in connection with consumers.
5/ The application of this Proclamation shall not in any way prevent civil actions consumers may file on matters of extra contractual liabilities under the civil code.
6/ Without prejudice to the adjudicatory power of Trade Practice and Consumers Protection Authority and the enforcement power of the Ministry and the bureaus, the provisions of this Proclamation may not apply to matters with regard to supervisory activities and measures undertaken in accordance with the Food, Medicine and Health Care Administration and Control Proclamation No. 661/2009.

No business person, either by himself or acting together with others, may carry on commercial activity by openly or dubiously abusing the dominant position he has in the market.
A business person either by himself or acting together with others in a relevant market, is deemed to have a dominant market position, if he has the actual capacity to control prices or other conditions of commercial negotiations or eliminate or utterly restrain competition in the relevant market.
1) A dominant position in a certain market may be assessed by taking in to account the business person’s share in the market or his capacity to set barriers against the entry of others into the market or other factors as may be appropriate or a combination of these factors.
2) The market relevant for the assessment of a dominant position is the market that comprises goods or services that actually compete with each other or fungible goods or services that can be replaced by one another
3)The geographic area of this market is the area in which the conditions of competition are sufficiently homogeneous and can be distinguished from the conditions of competition in neighboring areas.
4)The Council of Ministers may determine by regulation the numerical expression of the degree of market dominance.
The following acts shall, in particular, be considered acts of abuse of market dominance:
1)limiting production, hoarding or diverting or preventing or withholding goods from being sold in regular channels of trade;
2)with the view to restrain or eliminate competition, doing directly or indirectly such harmful acts, aimed at a competitor, as selling at a price below cost of production, causing the escalation of the costs of a competitor, preempt inputs or distribution channels;
3)directly or indirectly imposing unfair selling price or unfair purchase price;
4)contrary to the clearly prevalent trade practice refuse to deal with others on terms the dominant business person customarily or possibly could employ as though the terms are not economically feasible to him;
5)without justifiable economic reasons, denying access by a competitor or a potential competitor to an essential facility controlled by the dominant business person;
6)with a view to restrain or eliminate competition, impose discrimination between customers, in prices and other conditions in the supply and purchase of goods and services;
7) without any justifiable cause and with the view to restrain or eliminate competition:
a)making the supply of particular goods or services dependent on the acceptance of competitive or non competitive goods or services or imposing restrictions on the distribution or manufacture of competing goods or services or making the supply dependent on the purchase of other goods or services having no connection with the goods or services sought by the customer;
b)in connection with the supply of goods or services, imposing such restrictions as where or to whom or in what conditions or quantities or at what prices the goods or services shall be resold or exported.

A business person who conducts business to achieve legitimate business purposes, by ensuring that acts he commits are indispensable, decisive by their nature and cannot be achieved in any other ways; in particular:
1)maintenance of quality and safety of goods;
2)leveling with prices or benefits offered by a competitor; and
3) achieving efficiency and competitiveness;
shall not be considered as abusing market dominance.
The Council of Ministers may specify by regulation, those trade activities which shall be exempted from the application of the foregoing provisions of this Chapter One, when it deems such activities are vital in facilitating economic development.
Agreement or concerted practice or a decision by an association is prohibited if it has the object or effect of preventing, restricting or distorting competition.

1) For the purpose of this chapter, the term agreement includes mutual understanding, written or oral contract and operational procedures, whether or not legally enforceable.
2) For the purpose of this chapter concerted practice means a unified or cooperative conduct of business persons depicted in a way that does not look like an agreement and done to substitute individual activity.
1) The following acts are absolutely prohibited:
a)agreements or concerted practices or decisions by associations of business persons in a horizontal relationship and have the object or effect of the following:
i. directly or indirectly fixing prices;
ii. collusive tendering;
iii. allocating customers, or marketing territories or production or sale by quota;
b)agreement between business persons in a vertical relationship that has an object or effect of setting minimum retail price
2)For the purpose of the preceding provisions horizontal relationship is deemed to exist between competing business persons in a certain market, whereas vertical relationship is deemed to exist between business persons and its customers or suppliers or both.
It is possible for a business person accused of anti competitive practice as provided for under Article 13(1) (a) and (b) above or other provisions of this chapter, to prove that the technological or efficiency or other pro-competitive gains of the agreement or the concerted practice or the decision by association outweigh the detriments of the prohibited acts.

1)The Authority shall prohibit the act of merger, if it decides that it causes or is likely to cause a significant restriction against competition or eliminates competition.
2)The Authority shall immediately notify its decision under sub article (1) of this Article to the body that conducts commercial registration.
1)Merger for the purpose of this Proclamation is deemed to have occurred when two or more business organizations previously having independent existence amalgamate or when such business organizations pool the whole or part of their resources to carry on a certain business purpose.
2)Merger also occurs by directly or indirectly acquiring shares or securities or assets of a business organization by a person or group of persons jointly or the business of another person through purchase or any other means
3)For the purpose of the implementation of sub article (2) of this Article, a person or a group of persons shall be deemed to have acquired or to have taken control of a business organization or a business where such person or group of persons could influence the decision making in the affairs or in the administrative activities of a business organization or a business.
1)A government office, which conducts commercial registration, shall inform the Authority, the merger of business organizations or the transfer of shares or securities or assets which shall be entered in the commercial register before registering the same.
2)Any person, who is concerned with an agreement or arrangement that has the purpose of merger, shall, inform the Authority of the conclusion of an arrangement or agreement with the purpose of merger or an attempt to conclude the same.
3)No merger arrangement shall be implemented before the Authority grants permission.
1)The Authority shall prohibit the acts of merger that cause or are likely to cause a significant restriction on competition or that eliminate competition.
2)The Authority, when a notification of merger is submitted to it, shall, immediately communicate to the applicant in writing of its decision either to grant or deny its permission.
3)If the Authority needs additional information or documents, it shall communicate its decision to the applicant within a short period of time in order that the information and documents be submitted.
4)Where the Authority deems necessary, may notify the applicant how he shall amend the merger and that it gives the permission on condition of the submission of the amendment.
5/ The Council of Ministers may specify by regulation those acts of mergers that are subject to supervision.

The Authority may grant a permission to implement a merger in spite of the fact that it has an anti competitive effect, where the applicant can justify the merger by proving that gains in this respect cannot be obtained without restricting competition and technology, efficiency and pro-competitive gains resulting from the merger outweigh its anti competitive effects.
The Council of Ministers may specify by regulation those trade activities it deems are vital in facilitating economic development to be exempted from the application of the provisions of chapter three.
1) Any act or practice carried out in the course of trade, which is dishonest, misleading, or deceptive and harms or is likely to harm the business interest of a competitor shall be deemed to be an act of unfair competition.
2) In particular the following acts of unfair competition shall be prohibited:
a)any act that causes or is likely to cause confusion with respect to another business person or its activities, in particular, the goods or services offered by such business person;
b)any act of disclosure, possession or use of information, without the consent of the rightful owner of that information, in a manner contrary to honest commercial practice;
c)any false or unjustifiable allegation that discredits, or is likely to discredit another business person or its activities, in particular the products or services offered by such business person;
d)comparing goods and services falsely or equivocally in the process of commercial advertisement;
e)with a view to acquire an unfair advantage, disseminating to consumers or users, false or equivocal information including the source of which is not known, in connection with the prices or nature or system of manufacturing or manufacturing place or content or suitableness for use or quality of goods and services;
f) obtaining or attempting to obtain confidential business information of another business person through his ex-employee or obtaining the information to pirate his customers or to use for purposes that minimize competitiveness
Any consumer shall have the right to:
1) get sufficient and accurate information or explanation on the quality and type of goods and services he purchases;
2) Selectively buy goods or services;
3) 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;
4) be received humbly and respectfully by any business person and to be protected from such acts of the business person as insult, threat, frustration and defamation;
5) Submit his complaints to the Trade Practice and Consumers Protection Authority for adjudication; and
6) Be compensated for damages he suffers because of transactions in goods and services.
1)Any business person shall, display price of his goods and services by posting such list in a conspicuous place in his business premise or by affixing price tags on the goods.
2) The price of goods and services shall be inclusive of customs duties, taxes and other lawful fees.

1) Any business person shall, affix labels on the goods he sells or provide them to the consumer on a separate paper.
2) Labels affixed on goods shall indicate the following particulars as may be appropriate:
a) the name of the goods;
b)country of manufacturing or export of the goods;
c) The gross and net weight, volume, and quantity of the goods;
d) Quality of the goods;
e) Statement of materials used to manufacture the goods;
f) Technical specification of the goods and their operational or utilization methods;
g) Safety measures to be considered during the use of the goods;
H) A warranty of the service of the goods to be provided by the business person;
i) The name and address of the factory, packer and the importer;
j) expiry date of the goods;
k) manufacturing date of the goods;
l) indication that the goods have fulfilled requirements set in Ethiopian standards; and
m) other details published in public notices by the Ministry when deemed necessary to safeguard public interest.
3) Labels to be posted on goods shall be posted or printed on the good or its pack, being not easily detachable and shall be written at least in the Amharic or English language.
1) Any business person shall have the obligation to issue receipts to the consumer in respect of goods or services sold.
2)The business person shall keep pads of receipts issued in respects of goods and services he sold pursuant to sub article (1) of this Article or receipts obtained in respect goods and services he bought for sale, for ten (10) Years.
1) Any business person shall display his trade name in an overt place.
2)Any business person, shall, upon a request by a consumer relating to goods or services he sell, satisfactorily disclose himself and let the consumer take the information he wants.
Commercial advertisements about goods and services announced by any one shall not be false or misleading in any manner particularly on:
1) the nature, components and quantity of the goods; or
2)the source, weights, volume, method of manufacturing, date of manufacturing, expiry date of the goods and how it is used; or
3)the manufacturer or the supplier of the goods or services; or
4)the place of delivery, basic nature, the use and on how to use it, as far as services is concerned; or
5)conditions of purchase, warranty and services after purchase, conditions of payment and prices of the goods and services; or
6)quality marks; or
7)trade mark and emblem; or
8)results expected by using the goods or services.

1)Any consumer may report defects in goods and services purchased and the damage the defects may cause, to the Ministry or the bureau.
2)Without prejudice to warranties on goods or legal or contractual provisions more advantageous to the consumer, where the consumer finds defect in the good, he may demand the replacement of the good or a refund within fifteen days from the date of purchase of the goods.
3)Where the service purchased by the consumer is defective, the business person, shall, by the choice of the consumer, deliver the service again to the consumer free of charge or refund the consumer the fee he paid for the service within fifteen days from the date of the purchase of the service:
a)the written contract between the service provider and the consumer shall apply for damages happening to the property of the consumer during the delivery of the service.
b)where there is no written contract, the service provider shall replace the entire or part of the damaged property.
The contract shall be of no effect, where the provisions of the contract made between a consumer and a business person, waive legal obligations imposed on the business person by this Proclamation or prevent the consumer from exercising his rights under the law.
The following unfair and misleading acts are prohibited from being committed by any person or business person:
1) issuing misleading information on quality or quantity or volume or acceptance or source or nature or component or use of goods and service may have;
2) failing to disclose correctly the newness or model or the decrease in service or the change in or re-fabrication or the recall by the manufacturer or the second hand condition of goods;
3) describing the goods and services of another business person in a misleading way;
4)failing to sell goods and services as advertised or advertising goods or services with intent not to supply in quantity consumers demand, unless the advertisement discloses a limitation of quantity;
5) making false or misleading statements of price reduction;
6)applying or attempting to apply a pyramid scheme of sale by describing that a consumer will get a reward in cash or in kind by purchasing a good or service or by making a financial contribution and which describes that the consumer will get additional reward in cash or in kind where other consumers through his salesmanship purchase the good or service or make financial contribution or enter into the sales scheme, based on the number of consumers;
7)failing to meet warranty obligation entered in connection with the sale of goods and services,
8)misrepresenting the need for repair or replacements of parts to be made to goods as though not needed;
9)delivering services of repairing or replacing parts of goods or immovable properties or delivering the service of making or building immovable properties or delivering any other services below the standard recognized in the business or with deficiency;
10)preparing or making available for sale or selling goods or services that are dangerous to human health and safety or those source of which is not known or whose quality is below standards set in advance or are poisoned or have expired or are adulterated;
11)doing any act of cheating or confusing in any transaction of goods and services;
12)refusing to sell goods and services for reasons that are not protecting the rights of the consumer;
13)making available for sale or selling goods or services without standard marks for which the standard mark is needed;
14)selling goods or services at a price above the price affixed to the goods or the price posted in the business premise;
15)describing the country of the making of goods falsely;
16)unduly favoring one consumer over the other;
17)subjecting the consumer to purchase a good or service not desired in order to sell another good or service;
18)cheating in balance or measurements or any other measurement contrary to the lawful ones.

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6 replies »

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