The Competition Authority of Kenya (CAK) has penalized the Directline Assurance Company KSh85 million for abuse of buyer power against SME Garage Owners.

Directline is a general insurance provider with twenty-four (24) branches countrywide, offering a range of services, including motor vehicle insurance, as licensed under the Insurance Act Cap. 487 Laws of Kenya, while the Authority enforces the Competition Act to enhance the welfare of Kenyans by, among other roles, sanctioning Abuse of Buyer Power (ABP).

In a press statement released on December 3, 2025, the authority said Directline has abused two Nairobi-based automobile repair centers.

“In enforcing this mandate, the Authority has penalized Directline Assurance Company Limited (Directline) a total of Ksh 85,019,847.32 for abusing its superior bargaining position over two Nairobi-based automobile repair centers,” read part notice.

“Directline has also been ordered to settle the outstanding delayed payments totaling Ksh 6,063,235 to the two companies,” the Authority added.

Two Garage Businesses

The garage businesses that were abused by Directline are Kilele Motors Limited (Kilele) and Midland Autocare Limited (Midland).

The duo is are small enterprises that provide services such as panel beating, spray-painting, and mechanical repairs on motor vehicles.

“Both filed separate complaints, alleging that Directline refused to pay their invoices without justifiable reasons despite completing several repair assignments, thereby violating the agreed payment terms.

Also Read: NCBA Names Uhuru Kenyatta’s Brother as New Director

What Was Discovered During Investigation

According to the Authority, the commercial relationship between Directline and the two suppliers existed as a skewed bargaining position, and the insurer’s abuse of power

Among the evidence presented were authorization letters, re-inspection reports, release letters, invoices, satisfaction notes, and correspondence showing pending payments.

“The two firms supplied the Authority with evidentiary information to support their allegations, including authorization letters, re-inspection reports, invoices, release letters, customer satisfaction notes, and correspondence between the parties regarding the pending payments,” read part notice.

Kilele and Midland alleged that Directline’s conduct left them in a precarious financial position, making them struggle to meet obligations as needed to their suppliers, landlords, employees, and even threatening the growth of their businesses.

Also Read: Nairobi Water Employee Fined KSh8.5 Million for Using Fake KCSE Certificate to Get Job

What Authority’s Director General Said

Authority’s Director General David Kemei said the administrative action will serve as a deterrent to businesses that abuse their influential positions to disenfranchise their suppliers, most of whom are SMEs.

“The penalties levied are commensurate with the gravity of the offence, as well as the conduct of the accused party during the investigation. Supply contracts between parties to a commercial relationship should be equitable and the product of candid engagements,” said Kemei.

“Abuse of buyer power, which cripples suppliers, defeats the country’s aspiration of promoting inclusive economic development. SMEs are liquidity-constrained enterprises. Therefore, failure to honor payments for work done can destroy a business and render thousands jobless.”

What Was the Initial Debt

During the time of complaints, Directline owed Midland Ksh 7,616,456 and Kiele Ksh 5,038,094.

However, after the Authority intervened, part of the debt was paid and leaving a balance of Ksh1,343,331 and Ksh 4,719,904 to Kilele and Midland, respectively.

Directline said that delays were caused due to temporary inaccessibility of its bank accounts at the moment and assured the Authority that they will pay.

At long last, the insurer ended up ignoring nineteen formal reminders, letters, emails, and phone calls.

Follow our WhatsApp Channel and WhatsApp Community for instant news updates

A photo collage of the CAK logo and the Director of CAK David Kemei during the swearing-in ceremony. PHOTO/Courtesy