Kenya’s corporate giant Safaricom PLC has suffered one of the most embarrassing legal blows in its history after the High Court found the company liable for copyright infringement over its M-PESA Go and “Manage Child Account” product, awarding inventor Peter Nthei Muoki and Beluga Limited a staggering KSh 1.4 billion in damages plus future royalties tied to M-PESA revenues.
In a damning judgment delivered by Justice J.W.W. Mongare, the court concluded that Safaricom unlawfully copied the “M-TEEN MOBILE WALLET USSD CODE” concept after detailed presentations and meetings between the innovator and senior Safaricom executives between March and June 2021. The ruling tears apart Safaricom’s long-standing defense that the product was independently developed and instead paints a picture of a telecom giant accused of taking an innovator’s idea, reworking it internally, and rolling it out under its own powerful brand.
The case centered around a teenage mobile wallet concept designed to allow parents to control spending, track transactions, manage beneficiaries and monitor usage through detailed USSD structures. According to court documents, Peter Nthei Muoki developed the product targeting teenagers aged between 13 and 17 and formally registered the concept with the Kenya Copyright Board. He later shared the concept with senior Safaricom executives including Sitoyo Lopokoiyot after initial approaches to the company. The court found that the detailed USSD flows and menu structures constituted protected literary expression under copyright law.
Safaricom had attempted to argue that copyright law protects expression and not ideas, insisting that parental control functionality was already common within the industry. But the court rejected that defense in strong language, holding that the plaintiffs were not claiming ownership over the general idea of parental control, but over the specific and detailed expression of that concept through unique USSD menu flows, reporting mechanisms, restrictions and operational structures.
The judgment becomes even more damaging when examining how the court dismantled Safaricom’s independent development narrative. Safaricom and Huawei claimed that work on the parent-child control system had begun in 2020 before Peter approached the company. However, the court found glaring inconsistencies and suspicious gaps in the documentation presented by the telecom giant.
Justice Mongare openly questioned how a company of Safaricom’s size could allegedly develop a project of such magnitude without formal instructions, clear records, or credible final Functional Requirements Specifications. The court described the explanations surrounding the Huawei proposal and the alleged Central Bank verbal requests as unbelievable and lacking credible documentary support.
In one of the most explosive findings in the ruling, the court stated that the Huawei proposal appeared to be “a belated attempt to create a paper trail to defeat the Plaintiffs’ claim.” The judge further noted that Safaricom failed to produce the final Functional Requirements Specification document with Huawei, a failure that allowed the court to draw an adverse inference against the telecom company.
The ruling also heavily criticized Safaricom’s conduct after the plaintiffs disclosed the idea to company executives. The court noted that after meetings with Peter between March and June 2021, Safaricom accelerated testing and eventual rollout of the M-PESA Go product in what the judge described as a pattern commonly seen in intellectual property disputes where a large corporation initially rejects an innovator’s idea before later launching a strikingly similar product.
Perhaps the most humiliating section of the judgment for Safaricom comes in the judge’s final remarks. Justice Mongare openly criticized the telecom giant for “shifting explanations,” failing to produce critical documents, and rolling out the product during active litigation, conduct the court said “falls short of the standards expected of a market leader.”
The financial consequences are enormous.
The court awarded KSh 1.400 billion as damages, calculated conservatively as 1% of Safaricom’s FY2024 M-PESA revenue which stood at over KSh 140 billion. Justice Mongare dismissed Safaricom’s arguments that only nominal damages should apply, stating that the award was commercially reasonable given the scale of Safaricom’s business and the company’s massive profits.
But the punishment does not stop there.
The court also imposed an ongoing compulsory licensing structure requiring Safaricom to pay 0.5% of its gross M-PESA revenue every financial year for as long as it continues operating M-PESA Go, Manage Child Account, or any substantially similar parent-child functionality. This means Safaricom now faces continuous financial obligations tied directly to one of its most profitable products.
Although the plaintiffs had sought a permanent injunction to stop the product completely, the court declined to shut it down, citing public interest and the millions of users already relying on the functionality. Still, the refusal to stop the service does little to soften the reputational damage now hanging over Safaricom.
For years, Safaricom has positioned itself as Kenya’s most innovative telecommunications giant, often celebrating M-PESA as a symbol of African fintech success. But this judgment now threatens to stain that image by raising uncomfortable questions about how major corporations handle ideas brought by independent innovators. The ruling suggests that even the country’s most powerful companies can no longer assume they are untouchable when accused of exploiting smaller players.
The court itself described the case as “a cautionary tale for innovators and corporations alike,” warning that companies must ensure internal developments are genuinely independent when they receive unsolicited proposals from innovators.
For Peter Nthei Muoki and Beluga Limited, the judgment represents a dramatic victory against one of East Africa’s most powerful corporate giants. For Safaricom, however, the ruling is more than just a financial loss. It is a reputational crisis capable of shaking public confidence in how Kenya’s largest telecom company handles innovation, intellectual property, and smaller creators who dare to pitch ideas to powerful boardrooms.
