Kenya High Court Overturns KBC Advertising Monopoly

In a decisive move that reshapes the intersection of public procurement, media operations, and constitutional governance, Kenya’s High Court has struck down a directive that had granted the Kenya Broadcasting Corporation (KBC) a monopoly over government advertising. The directive, issued by the Ministry of Information, Communication, and Technology (ICT), aimed to revitalize the financially struggling state broadcaster by channeling exclusive advertising revenue from all government entities.

However, this policy, though arguably well-intentioned, faced backlash for undermining procurement laws, limiting media freedom, and threatening the diversity of Kenya’s media landscape.

Background: What Was the Directive?

The directive was issued on March 7, 2024, by Broadcasting Principal Secretary Edward Kisiang’ani. It required all public institutions—including ministries, state corporations, commissions, and universities—to exclusively place their advertisements with KBC for two years. The move was framed as an economic lifeline for the state broadcaster, which has faced years of financial struggles.

Immediate Implications:

1. Exclusion of Private Media: The directive sidelined private media houses from accessing lucrative government advertising contracts.
2. Threat to Media Diversity: The policy risked creating a state-controlled advertising monopoly, undermining a pluralistic media environment.
3. Legal Violations: Critics flagged violations of Kenya’s Public Procurement and Asset Disposal Act, which mandates transparent, competitive, and fair procurement processes.

The Law Society of Kenya (LSK) and other stakeholders quickly challenged the directive, arguing it was unconstitutional and detrimental to the broader media industry.

The Legal Battle

The case was brought before the High Court, where petitioners, including the Law Society of Kenya (LSK), contended that the directive breached multiple constitutional provisions. Specifically, they argued:

1. Violation of Public Participation Requirements: The Kenyan Constitution mandates inclusive consultation in policymaking.
2. Contravention of Procurement Laws: The directive bypassed provisions under the Public Procurement and Asset Disposal Act, which requires fair competition.
3. Threat to Media Freedom: A state monopoly on government advertising threatened the independence and financial viability of private media houses.

The Court’s Ruling

“It follows, therefore, that the 2nd respondent (Prof Kisiang’ani) unlawfully appropriated unto himself non-existent powers. Under the Public Procurement and Asset Disposal Act, the second respondent has no capacity to exercise such powers, thus rendering his memo void ab initio,” Judge Lawrence Mugambi.

High Court Judge Lawrence Mugambi quashed the directive, declaring it unconstitutional. His decision rested on several key findings:

1. Overreach of Authority
   The court ruled that the Broadcasting PS lacked the legal authority to issue procurement directives to government entities. Such decisions rest solely with accounting officers within individual agencies, as per procurement laws.
2. Failure of Public Participation
   The directive was formulated and implemented without public consultation, violating constitutional requirements for inclusivity in policymaking.
3. Discrimination in Procurement
   By mandating exclusive advertising on KBC, the directive promoted discriminatory practices that contravened the principles of fairness and transparency enshrined in procurement laws.
4. Media Freedom and Diversity
   Justice Mugambi highlighted the directive’s potential to erode media plurality. He emphasized that media freedom is critical to a democratic society, and policies undermining it must be avoided.

“For the State to make such a fundamental policy shift affecting the procurement of advertising services that excludes the privately owned enterprises, such a decision is not a mere internal matter to be effected without the involvement of the public, whose concerns must be heard and taken into account before the policy is made,” ruled the judge.

Implications of the Ruling

1. For Media Freedom in Kenya

The ruling underscores the critical role of media freedom in fostering democracy. Kenya’s media landscape relies on diversity and competition to ensure citizens receive unbiased, comprehensive information. Granting KBC an advertising monopoly could have:

• Financially influence negatively private media outlets.
• Restricted access to alternative perspectives.
• Undermined the public’s right to information.

2. For Public Procurement Practices

The judgment reaffirms the principles of transparency, fairness, and competitiveness in public procurement. By quashing the directive, the court has reinforced the need for:

• Adherence to the Public Procurement and Asset Disposal Act.
• Avoiding monopolistic practices that distort free markets.
• Ensuring policies align with the Constitution.

3. For Governance and Public Participation

The directive’s lack of public participation was a significant oversight. The ruling highlights the importance of:

• Involving stakeholders in policymaking.
• Upholding constitutional values in decision-making processes.
• Avoiding policies that prioritize expediency over legality.

4. For KBC and State-Supported Enterprises

While the directive aimed to provide financial relief to KBC, the ruling emphasizes that such support must not come at the expense of private sector players or constitutional principles. The government must explore alternative means to bolster KBC, such as:

• Increased funding through the national budget.
• Strategic partnerships with private entities.
• Enhanced operational efficiencies.

Broader Context: Media Freedom in Kenya

The case highlights ongoing challenges to media freedom in Kenya, a country often regarded as a regional leader in press independence. However, policies like the KBC directive reveal the underlying tensions between state control and media autonomy.

Key Challenges:

• State Influence on Media: Government attempts to control narratives through financial levers.
• Financial Viability of Private Media: Declining advertising revenue exacerbates vulnerabilities.
• Digital Disruption: Media houses face growing competition from online platforms.

The High Court ruling is a reminder that safeguarding media freedom requires constant vigilance and robust legal protections.

The Role of the Government Advertising Agency (GAA)

The Government Advertising Agency (GAA) was established in 2015 to streamline public sector advertising. While its objectives include cost efficiency and centralized coordination, its operations have faced criticism for:

• Favoring state media over private outlets.
• Delayed payments to media houses, affecting their financial stability.

The court ruling underscores the need for reforms within the GAA to ensure fairness, transparency, and timely disbursement of funds.

Way Forward: Balancing State Support and Market Fairness

The ruling presents an opportunity for the government to recalibrate its approach to supporting state-owned enterprises like KBC. Possible strategies include:

1. Alternative Funding Models
   • Direct budgetary allocations.
   • Revenue diversification through digital platforms.
2. Strengthening Public-Private Collaboration
   • Partnerships with private media houses to co-produce content.
   • Joint advertising initiatives that benefit all stakeholders.
3. Promoting Policy Transparency
   • Ensuring all policies undergo public participation.
   • Aligning directives with constitutional principles and legal frameworks.

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The High Court’s decision to quash the KBC advertising monopoly is a landmark ruling that reaffirms the importance of constitutional governance, media freedom, and transparent public procurement practices. It sends a clear message that government policies must align with the law, protect democratic values, and foster a fair economic environment.

While the ruling poses challenges for KBC, it also provides an opportunity for the government to rethink its approach to supporting state enterprises without undermining private sector players or constitutional rights. For Kenya’s media industry and democratic governance, this ruling is a step in the right direction.