A contract dispute has arisen between Safaricom, Kenya’s largest telecom operator, and Goodweek Inter-Services Limited.
This dispute has escalated into a legal battle. Goodweek, which previously sold M-PESA services, SIM cards, and Safaricom products, claims that Safaricom abused its market power by imposing unfair contract terms when it removed them from its dealership network.
As a result, Goodweek has taken the matter to court. The case is currently being heard in the Constitutional and Human Rights division of the High Court of Kenya.
The defendants in the case also include Vodafone Plc, Vodafone Kenya Limited, and Mobitelea Ventures Limited, with Goodweek having lodged complaints against these companies as well.
Goodweek had been operating on Safaricom’s dealership portal since 2002 but lost access in April 2024 after failing to renew its contract. Safaricom argues that the suspension was automatic and triggered by the expiration of the dealership agreement.
According to Safaricom, all dealers operate under similar terms, and over 400 other dealers renewed their agreements without issue. Safaricom asserts that Goodweek was notified in advance about the need to renew its contract but chose not to, making the claims of unfair treatment baseless.
On the other hand, Goodweek argues that Safaricom used its market power to force dealers into signing contracts without room for negotiation. Goodweek claims that they were effectively shut out because they refused to accept these terms.
At the heart of the case is an important legal question: Did Safaricom simply enforce standard contract terms, or did it use its market power to force smaller players into signing contracts?
The outcome of the case will involve considerations of arbitration courts, market dominance concerns, and contract law. As a result, the case could have far-reaching implications.