The Federal Competition and Consumer Protection Bill 2018 was signed into law by the President of Nigeria on 30 January 2019 (“FCCPA” or “Act”). The FCCPA repealed the Consumer Protection Act and the provisions of the Investment and Securities Act relating to merger control. The FCCPA also established the Federal Competition and Consumer Protection Commission (“FCCPC” or “Commission”) with the responsibility of reviewing all mergers and other business combinations or arrangements, among other functions.
Between 3 May 2019 and March 2020, merger notifications and filings were jointly reviewed by the Securities and Exchange Commission (“SEC”) and the FCCPC, but starting from April 2020, merger control notifications and filings were required to be submitted to the FCCPC. The SEC, however, reviews mergers and acquisitions by or involving public companies as well as transactions involving a change of shareholding of capital market operators.
On 20 November 2020, the FCCPC published the Merger Review Regulations (Regulations), Merger Review Guidelines, and other ancillary instruments for the purpose of providing a robust guideline on competition related matters such as computation of fees, description of control, merger filing exemptions and other matters, which clarified a number of grey areas in the competition regulatory space.
In a bid to strengthen the application of the recently enacted regulations, in October 2021, the FCCPC launched an online merger notification portal (“Portal”) to automate the submission of merger notifications by merging parties. The Portal eliminates the need for physical submission of documents relating to merger transactions at the Abuja offices of the FCCPC and enables merging parties consult with and obtain clarifications from the FCCPC online, before filing a formal merger notification and also contains a fee calculator to enable parties automatically assess the fees without need for recourse to the FCCPC.
Also in January 2022, the FCCPC signed a regulatory Memorandum of Understanding with the Nigerian Shippers’ Council, which is expected to regulate pricing, promote fair competition among operators in the industry and ensure that the playing field is level for all in the market, without undue entry barriers.
From a sectoral perspective:
- The Companies and Allied Matters Act, 2020 (“CAMA 2020”) was enacted on 7 August 2020, which repeals and replaces the Companies and Allied Matters Act, 1990. The CAMA 2020 permits the merger of incorporated trustees with similar aims and objects, under the terms and conditions prescribed in regulations made by the Corporate Affairs Commission. CAMA 2020 also provides a legal framework for mergers involving of two or more companies, as well as compromise, arrangement or reconstruction between two or more companies.
- The Nigerian Communications Commission (“NCC”) published the NCC Licensing Regulations 2019 (“NCC Regulations”) which became effective on 11 January 2019. The NCC Regulations prohibit the issuance of an individual license to an applicant that has a controlling interest in another licensee, where the NCC is satisfied that anticompetitive issues would likely arise upon grant of such licence. Furthermore, where a licensee wishes to transfer ownership or control of more than 10% of its total share capital, it is required to apply to the NCC for an approval of the transfer, 90 days prior to the proposed date of such transfer, or such other period stated in the licence conditions or determined by the NCC. The NCC is mandated to refuse the transfer where it makes a determination that the acquisition of ownership or control of the licensee is likely to lead to anticompetitive issues in that segment of the telecommunications market.
- The National Broadcasting Commission (“NBC”) published certain amendments to the 6th edition of the Nigeria Broadcasting Code (“NBC Code”) on 26 March 2020. The NBC Code prohibits a broadcaster or a licensee from entering into any form of agreement, contract or arrangement that is intended to prevent, restrict or distort competition in the broadcast media industry in Nigeria. Based on the above, a broadcaster or a licensee is prohibited from entering into any form of broadcasting rights acquisition either in Nigeria or anywhere in the world to acquire any broadcasting right(s) in such a manner as to exclude persons, broadcasters or licensees in Nigeria from sub-licensing the same. Any such agreement entered in contravention of the NBC Code is void. There are, however, concerns around the power of the Director General of the NBC and the Nigerian Minister of Information to issue the NBC Code without recourse to the board of the NBC. In the event that the NBC Code is found to be issued without recourse to the due procedure for issuance of guidelines or codes under the NBC Act, the NBC Code will be deemed void.
The FCCPC has conducted the market inquiries and investigations listed below:
a) Investigation of competition and possible consumer rights violations by dominant PayTV service providers.
b) Surveillance regarding price gouging and arbitrary increases in prices of protective and hygiene products on account of COVID-19 concerns.
c) Investigation of anticompetitive conduct of five companies in the shipping and freight forwarding industry.
d) Investigation of distribution companies over arbitrary billing and mass disconnection of electricity within the power sector.
e) Setting up a regulatory committee to investigate the complaints of violation of consumer rights in the money lending industry, with the aim of shutting down an illegal money lending businesses.
Yes. The FCCPC expressed concerns over competition and possible consumer rights violations by dominant PayTV service providers, and price gouging by suppliers and retailers of protective and hygiene products during the COVID-19 pandemic.
The FCCPC has also expressed concerns over the anti-competitive conduct of five companies in the shipping and freight forwarding industry, including the formation of a cartel by these companies. Additionally, in December 2021, the FCCPC expressed concerns that the electricity, banking and aviation sectors have again topped its 2021 consumer-related complaints chart as they did in the year 2020.
No.
Yes. Dawn raids are a high risk in Nigeria. Recently it was reported that operatives of the FCCPC and the National Agency for Food and Drug Administration and Control conducted a joint dawn raid at a popular skin care facility in Surulere, Lagos. It was reported that during the dawn raid, operatives of both regulators removed various skin care products and chemicals for laboratory analysis and ordered an interim suspension of operation, and use of unapproved products/chemicals and procedures. However, it is noted that this raid is in relation to consumer protection and quality control not competition.
Yes. The FCCPC released a publication entitled “Business Guidance Relating to COVID-19 On Business Co-operation / Collaboration and Certain Consumer Rights Under the Federal Competition and Consumer Protection Act” in April 2020. The publication provides clarity for businesses and consumers regarding authorisations for cooperation among businesses during the COVID-19 pandemic, and regarding consumer rights under Part XV of the FCCPA during the COVID-19 pandemic.
The FCCPC released an additional publication entitled “Guidance Regarding FCCPC’s Merger Notification Process / Interpretation of the Law on Other Competition Issues Under the FCCPA During COVID-19 Pandemic”, in April 2020, in relation to continuing operations regarding certain competition and consumer protection regulations during the Pandemic.
Another measure introduced by the FCCPC in October 2021 to alleviate the pressures of remote working as a result of the pandemic, is the launching of an online merger notification Portal to automate the submission of merger notifications by merging parties. The Portal eliminates the need for physical interface between the FCCPC and merger parties, while facilitating the merger review process.
Yes. In June 2020, the FCCPC filed an action against four major pharmacies and supermarkets at the Federal High Court, for allegedly taking advantage of the COVID-19 outbreak in the country by increasing the prices of key hygiene products. Furthermore, in August 2020, the FCCPC conducted investigations on various pharmacies, in response to multiple social media posts about alleged excessive pricing by the pharmacies, of hydroxychloroquine, which was considered effective for managing COVID-19.
In January 2022, the FCCPC signed a regulatory Memorandum of Understanding with the Nigerian Shippers’ Council which is expected to, inter alia, regulate pricing and competition in the shipping industry.
In view of the provisions of section 17(a) of the FCCPA, which empowers the FCCPC to administer and enforce provisions of every Nigerian law with respect to competition and protection of consumers, it was reported that in November 2021, the FCCPC entered into a partnership with the National Information Technology Development Agency to create a more robust and concerted regulatory approach to the protection and use of consumer information and data by firms within the digital market space.