Tanzania recently enacted the Fair Competition (Abuse of Dominant Position) Regulations, 2026 (the Regulations) which came into force on 14 August 2026. The Regulations mark a significant development in Tanzania competition law by expressly bringing the exercise of intellectual property rights within the scope of competition law scrutiny. The Regulations provide clarity on the types of conduct that may constitute an abuse of dominant position and identify factors that may indicate the abusive exercise of intellectual property rights. In particular, the Regulations target situations where the exercise of intellectual property rights is used in a manner that restricts, distorts or prevents competition in the market, thereby aligning the protection of intellectual property with the broader competition law objectives.
Relationship between intellectual property rights (IPRs) and competition law
Intellectual property law and competition law are distinct but increasingly interconnected areas of regulation. This intersection has become more significant as technological advancement, digital markets and innovation-driven industries continue to shape modern economies. While IPRs grant creators and innovators exclusive rights over inventions, literary and artistic works, trademarks, industrial designs, trade secrets and other forms of intellectual property, competition law seeks to preserve competitive market structures and protect consumers from anti-competitive conduct. Together, these legal regimes pursue complementary objectives of promoting innovation, market participation, economic growth and consumer welfare.
By conferring exclusive rights of use, typically for a limited period, intellectual property laws enable right holders to commercialise their creations and recover investments made in research and development (R&D). This incentive encourages further innovation and development of new products and technologies for the ultimate benefit of consumers. However, the exercise of IPRs does not occur in isolation from the competitive process. Businesses often rely on existing intellectual property through licensing arrangements, assignments, technology transfers and other collaborative mechanisms to build and market their own products and services. Such access allows businesses to build upon prior innovations, without incurring full costs and the risk associated with independent R&D.
The relationship between intellectual property and competition is therefore characterised by an inherent tension. On the one hand, intellectual property law rewards innovation by granting exclusivity to those who invest time, resources and expertise in creating new products and technologies while, on the other hand, excessive or exclusionary use of these rights may impede market entry, limit consumer choice or suppress further innovation. It is precisely this balance that competition law sets out to strike so that, on the one hand, intellectual property law can reward innovation by granting exclusivity to creators and inventors while, on the other hand, competition law can ensure that those exclusive rights are not exercised in an unfair manner that would distort, restrict or prevent competition.
Legislative changes
Prior to 2024, the Fair Competition Act, 2003 (the Competition Act) prohibited the abuse of dominant position but provided limited guidance on the specific conducts that could constitute such abuse. Market dominance was generally assessed by reference to market share, with a person being presumed to hold a dominant position where their market share exceeded 35%.
This position changed following the enactment of the Fair Competition (Amendment) Act, 2024 which increased the statutory dominance threshold from 35% to 40% and introduced a non-exhaustive list of 12 forms of conduct that may constitute abuse of dominance. These include:
- directly or indirectly imposing unfair purchase or selling prices, or unfair trading conditions;
- limiting or restricting production, market outlets, market access, innovation, investment, distribution, technical development or technological progress to the prejudice of consumers;
- predatory pricing;
- margin squeeze;
- cross-subsidisation;
- refusal to deal;
- denial of access to an essential facility;
- tying and bundling;
- discrimination in price or trading conditions to the prejudice of suppliers or consumers;
- loyalty discount and rebates that harm competition;
- abuse of an intellectual property; and
- making agreements subject to acceptance of supplementary conditions which by their nature have no connection with the subject matter of such agreements.
Significantly, the 2024 amendments expressly recognised the abuse of IPRs as a form of abuse of dominance. However, the amendments did not explain the circumstances in which the exercise of IPRs could cross the line from legitimate exclusivity to anti-competitive behaviour. The Regulations have now addressed that gap. Regulation 15 introduces a framework for assessing whether the exercise in IPRs amounts to an abuse of a dominant position and provides specific indicators that may evidence anti-competitive conduct. The Regulations do not prohibit the mere ownership or exercise of IPRs. Rather, they seek to identify instances where the exercise of such rights extends beyond their legitimate scope and has the effect of restricting, distorting or preventing competition in the market.
Abuse of IPRs as an abuse of dominance
Regulation 15 provides specific guidance on the circumstances in which the exercise of IPRs may amount to an abuse of a dominant position. The common thread running through the provision is that, while IPRs confer legitimate exclusivity, they should not be exercised in a manner that forecloses competition or unfairly disadvantages rivals.
One category of conduct relates to the denial of access to intellectual property. Under Regulation 15, a dominant undertaking may be considered to abuse its position where it refuses to license an IPR without legitimate justification, particularly where the refusal has the effect of excluding competitors from access to important technologies, products or processes. Although the Regulations recognise that a refusal may be justified by economic considerations, they do not explain what constitutes an economic justification. In practice, factors such as the protection of substantial research and development investments, preservation of innovation incentives, protection of confidential know-how or safeguarding the technical integrity of a technology may be relevant considerations. The challenge will be to strike an appropriate balance between preserving exclusivity that forms the foundation of IPRs and ensuring that such exclusivity is not used to foreclose competition.
The Regulations also seek to address potential abuses arising from licensing practices. These include the imposition of licensing terms or royalty rates that are disproportionate to the value of the intellectual property, as well as the application of discriminatory licensing terms that favour some competitors over others without objective justification. It is noteworthy that the objective is not to regulate licensing fees but, rather, to prevent dominant intellectual property holders from using excessive charges and discriminatory conditions to raise rivals' costs or distort the competitive process. However, the practical application of these provisions may prove challenging given the inherent dynamic nature of intellectual property valuation and the absence of guidance on how the reasonableness of royalty rates will be assessed.
A further category of prohibited conduct concerns the use of licensing arrangements to leverage on market power beyond the scope of the IPR itself. Regulation 15 identifies as potentially abusive the practice of requiring licensees to accept unrelated licences, products, services or contractual conditions as a pre-condition to obtain access to the desired intellectual property. This reflects traditional competition law concerns regarding tying and bundling, particularly where a dominant undertaking uses control over one IPR to distort competition in adjacent markets.
The Regulations also target conduct designed to raise barriers to entry or exclude competitors from the market. In this regard, Regulation 15 identifies the creation of patent thickets and the strategic accumulation or filing of patents for exclusionary purposes as a potential abuse of dominance. Rather than rewarding genuine innovation, such practices may create artificial barriers that make it unduly difficult or costly for competitors to innovate, develop competing products or enter the market. Similarly, the regulations capture sham or predatory litigation, where intellectual property enforcement proceedings are initiated not for the genuine protection of legal rights but as a strategy to harass competitors, increase their costs or delay their market entry.
Regulation 15 further contains a broad catch-all provision that permits scrutiny of any conduct involving IPRs that has the object, effect or likely effect of appreciably preventing, restricting or distorting competition. This provision serves as a safeguard against novel forms of anti-competitive conduct that may not fall neatly within specific examples identified elsewhere in the Regulations. Its breadth underscores that compliance cannot be assessed solely by reference to the listed categories of conduct. Rather, dominant intellectual property holders must consider the overall competitive impact of their conduct and whether the exercise of their rights serves legitimate commercial objectives or operates to undermine competition in the market.
Conclusion
The Regulations represent a significant development in Tanzania's competition law framework. By providing detailed guidance on the forms of conduct that may constitute an abuse of dominance, the Regulations address a longstanding gap in the law and provide businesses with greater certainty as to the boundaries of permissible commercial conduct.
One of the most notable aspects of the regulations is their recognition that IPRs, while legitimate and deserving of protection, are not immune from competition law scrutiny. The Regulations seek to ensure that dominance, whether derived from market share, technology, innovation, intellectual property or other commercial advantages, is not exercised in a manner that forecloses markets, excludes competitors or harms consumers.
More broadly, the Regulations reflect an evolving approach to competition law enforcement – one that is increasingly concerned not only with traditional forms of exclusionary conduct but also with the competitive effects of practices in innovation-driven and technology-intensive markets. In doing so, they reinforce the principle that the possession of market power is not, in itself, unlawful – it is the abuse of that power that attracts regulatory intervention.
For businesses operating in Tanzania, the Regulations underscore the need to assess commercial strategies, through both a competition law and intellectual property lens. Licensing practices, commercial arrangements, access arrangements and enforcement strategies that may previously have been viewed solely as matters of intellectual property or contractual rights may now require closer consideration of their potential competitive effects.
As the Fair Competition Commission begins to apply the Regulations in practice, further clarity will inevitably emerge through enforcement decisions and judicial interpretation. Nevertheless, the direction of travel is unmistakable. The Regulations signal a move towards a more sophisticated and effects-based approach to abuse of dominance, aimed at preserving the delicate balance between rewarding innovation, protecting competition and promoting consumer welfare. In that regard, they are likely to play a central role in shaping the competitive landscape in Tanzania for years to come.
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