Introduction
In a landmark decision delivered on 22nd November 2024, the High Court of Kenya ruled against Safaricom PLC’s attempt to impose expiry dates on Bonga Points, declaring the move unconstitutional and a violation of consumers’ economic interests. This judgment, arising from Petition No. E554 of 2022, serves as a resounding affirmation of consumer protection principles under the Kenyan Constitution. Here’s a breakdown of the case and its implications for subscribers and the business landscape in Kenya.
The petition, filed by Dr. Magare Gikenyi J. Benjamin, arose after Safaricom issued a public notice on 28th October 2022, stating that Bonga Points older than three years would expire on 1st January 2023. This announcement led to widespread concern, with millions of subscribers potentially losing loyalty points accumulated over years. Dr. Magare argued that this notice:
- Breached subscribers’ legitimate expectations and economic interests.
- Was issued without adequate consultation or notice, violating Article 46 (consumer rights) and Article 47 (fair administrative action) of the Constitution.
- Disproportionately affected vulnerable groups, including individuals with disabilities and those with limited access to information.
Safaricom defended the policy, citing operational costs and the need to encourage redemption of points. The company also argued that the loyalty program was voluntary, with terms subject to periodic updates.
Court’s Analysis and Determination
- Jurisdiction:
The court rejected Safaricom’s argument that it lacked jurisdiction due to the doctrine of exhaustion under the Kenya Information and Communications Act, 1998. It ruled that the case raised constitutional questions related to consumer rights, falling squarely within its jurisdiction under Article 165(3)(b). - Violation of Consumer Rights:
The court held that once awarded, Bonga Points became the property of subscribers, constituting an economic interest protected under Article 46. Safaricom’s unilateral imposition of expiry dates infringed on this right. - Legitimate Expectation:
Subscribers had a legitimate expectation that Bonga Points, once earned, would remain valid indefinitely unless explicitly stated otherwise at the inception of the program. The introduction of expiry dates, without prior consultation, breached this expectation. - Unconstitutionality of the Notice:
The court found Safaricom’s notice unconstitutional, null, and void. It ruled that Safaricom could not retroactively alter the terms of its loyalty program to the detriment of consumers.
- A declaration that the public notice introducing expiry dates on Bonga Points was unconstitutional, null, and void.
- An order of certiorari quashing the notice.
- An order of prohibition preventing Safaricom from implementing the notice.
- Each party was directed to bear their own costs, emphasizing the case’s public interest nature.
Conclusion and Implications
This judgment is a victory for consumers and a reminder to corporations to act transparently and uphold their contractual obligations. For subscribers, it reinforces the value of their loyalty and the need for businesses to respect their economic rights. Businesses, on the other hand, must ensure that any changes to terms affecting consumers are communicated effectively and adhere to constitutional principles.
Subscribe to our newsletter for more insights into consumer rights and legal developments shaping Kenya’s landscape.