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A CRITIQUE OF THE NIGERIAN FEDERAL COMPETITION AND CONSUMER PROTECTION ACT (FCCPA) 2019

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Abstract

On January 30, 2019, Nigeria joined the ranks of countries with a competition regime upon the enactment of the FCCPA. This came 17 years after the first idea for a competition law was touted in Nigeria in December 2002.1 This article will critically appraise the general provisions of the FCCPA with the aim of making a case for further legislative intervention in these areas of concern, and conclude with recommendations.
1
A CRITIQUE OF THE NIGERIAN FEDERAL COMPETITION AND CONSUMER
PROTECTION ACT (FCCPA) 2019.
By
UWADI, Enyinnaya C.
LLM Candidate, International Commercial Law with Competition Law and Regulation,
University of Reading, United Kingdom.
Introduction
On January 30, 2019, Nigeria joined the ranks of countries with a competition regime upon the
enactment of the FCCPA. This came 17 years after the first idea for a competition law was
touted in Nigeria in December 2002.
1
This article will critical appraise the general provisions
of the FCCPA with the aim of making a case for a further legislative intervention in these areas
of concern, and conclude with recommendations.
Background
The FCCPA created two institutions for the purposes of enforcing its provisions namely; the
Federal Competition and Consumer Protection Commission (FCCPC) and the Competition and
Consumer Protection Tribunal (CCPT). It saddled them with the responsibility of promoting
competition in the Nigerian market by eliminating monopolies, prohibiting abuse of a dominant
position and penalizing other restrictive trade and business practices.
2
1
Enyinnaya Uwadi, ‘Competition Law in Nigeria: A Brief Overview of the Federal Competition and Consumer
Protection Act 2019’ (Sound Counsel August 2019) 36.
2
Explanatory Memorandum, FCCPA.
2
The FCCPA repealed the Consumer Protection Council Act,
3
and established the FCCPC
4
in
the place of the Consumer Protection Council. It also repealed Sections 118 to 127 of the
Investments and Securities Act 2007 which hitherto empowered the Securities and Exchange
Commission (SEC) to regulate and approve mergers, and assigned this role to the FCCPC.
5
The FCCPA is applicable to all commercial activities within, or having effect in Nigeria.
6
Its
provisions are also binding on all government departments and state owned corporations, and
indeed all commercial activities aimed at making profit and targeted at satisfying demand from
the public.
7
It equally applies extraterritorially to any prohibited conduct by a Nigerian citizen
or a person ordinarily resident in Nigeria; a corporate body registered in Nigeria or carrying
out business within Nigeria; any person supplying or acquiring goods or services into or within
Nigeria; any person in relation to the acquisition of shares or assets outside Nigeria which
results in the change of control of the business, part of the business or any asset of the business
in Nigeria.
8
The FCCPC is composed of a Board made up of a Chairman, the Chief Executive of FCCPC,
two Executive Commissioners and four non-executive Commissioners.
9
These Board members
are to be appointed by the President subject to confirmation by Senate.
10
Likewise, the CCPT
is composed of a Chairman who shall be a lawyer with 10 years post-qualification, and
experienced in competition law, consumer protection or commercial and industrial law; six
other members with 10 years professional experience in either of competition and consumer
protection law, commerce and industry, public affairs, economics, finance, or business
3
Cap C25 LFN 2004; See Section 165, FCCPA.
4
Section 3, FCCPA.
5
Section 93 of the FCCPA
6
Section 2.
7
ibid.
8
Section 3.
9
Section 4.
10
Section 5.
3
administration.
11
The tenure of office of the members of the CCPT is 5 years from the date of
confirmation or upon the attainment of 70 years, whichever comes first.
12
The procedure for
appointment of the members of CCPT is the same with the FCCPC. The CCPT adjudicates
over conducts prohibited by the FCCPA, entertain appeals from and reviews any decision of
the FCCPC,
13
hear appeals on the decisions of sector-specific regulators on competition and
consumer protection matters, after the FCCPC had first considered the appeal.
14
The decision
of the Tribunal is to be registered at the Federal High Court for enforcement purposes only,
15
while appeals on the Tribunal’s decision goes to the Nigerian Court of Appeal.
16
In the context of existing legal framework, the provisions of the FCCPA override that of any
other law in all matters relating to competition and consumer protection. This implies that the
FCCPC has precedence over and above any other sector-specific regulator in matters or
conducts which affect competition and consumer protection.
17
To ensure a cordial relationship
and guard against power tussle between sector-specific regulators and the FCCPC, the FCCPC
is mandated to negotiate agreements with sector specific regulators having competition and
consumer protection competence to co-ordinate and harmonize the exercise of jurisdiction over
competition and consumer protection matters within the relevant industry or sector.
18
Although the enactment of the FCCPA is a welcome development, there are some areas of
concern which may impede the implementation and attainment of the objectives of the FCCPA.
I will address them in the next section.
11
Section 40.
12
Section 41.
13
Section 47 (1)(a).
14
Section 47 (2).
15
Section 54.
16
Section 55 (1).
17
Section 104.
18
Section 105 (4) (5) (6).
4
Critical Review
First, there has been some concern about the overbearing political interference in the FCCPA
as exemplified by some powers granted to the executive in several provisions of the Act, a
feature that is considered to be antithetical to the independence of the FCCPC, and could make
the Commission an appendage of political actors. For example, sections 88 to 91 which make
up Part XI of the Act provide for price regulation of some select goods and services upon an
order of the President published in the Gazette. This power it is argued, ought to reside with
the FCCPC to guarantee its independence and insulate it from political interference, and not
with the President. The concern is that a power such as this, sitting in the context of competition
enforcement, ought to rest on the FCCPC itself without reference to any political actor
including the President, because of the high tendency to prioritize political calculations over
economic decisions. From experience, decisions by political actors even in the economic
sphere, tend to be driven by political considerations and undertones. Most times, governments
may shy away or backtrack from necessary economic decisions, especially if unpalatable in the
short term, for fear of an unfavourable reaction in the polity.
19
Secondly, some provisions of the FCCPA clash with the statutory powers of some regulatory
agencies like the Standards Organisation of Nigeria in Sections 17(m) (u) (w) (y) and 18(1)(d)
and (e)(i); the National Agency for Food and Drug Administration and Control in Section 18
(1)(b)(d) and (e); Nigerian Customs Service in Section 17(q). These other agencies whose
mandate also includes consumer protection may consider the FCCPA to be encroaching into
19
For example, the reversal of the removal of subsidy on petroleum products by the administration of President
Jonathan in 2012 due to nationwide protests. This removal could have paved way for the deregulation of the
Nigerian petroleum sector and saved a lot of recurrent expenditure needed to fund capital projects.
Consequently, Nigeria pays over GBP 5 Million daily on subsidy. See The Guardian, Nigeria restores fuel
subsidy to quell nationwide protests’ (16 January 2012)
< https://www.theguardian.com/world/2012/jan/16/nigeria-restores-fuel-subsidy-protests>;
Emmanuel Okogba, ‘Fuel subsidy hits 2.4bn daily’ (Vanguard 19 June 2018)
< https://www.vanguardngr.com/2018/06/fuel-subsidy-hits-n2-4bn-daily/> accessed August 28, 2019.
5
their statutory provinces, where they have developed considerable expertise. This raises
questions as to whether these agencies will respond favourably to any approaches to be made
by the FCCPC to them pursuant to the provisions of Section 105(4) Act.
Thirdly, the provision of Section 38 appears to subject the right of appeal on the decision of
the FCCPC to the regulations made by the same FCCPC, who will certainly be a respondent at
the CCPT. This provision which offends the natural justice principle of nemo judex in causa
sua, in my opinion is counter-productive and defeats the overall purpose of justice. The
regulations for appeals procedures to the CCPT ought not to be the responsibility of FCCPC
whose decision is being appealed against, but that of a neutral body like the CCPT. Retaining
this provision may lead to arbitrariness and misuse of power by the FCCPC as it may
intentionally adopt complex appeal procedures while drafting of the regulations, which may
systematically foreclose aggrieved parties from having recourse to appeal, thereby technically
rendering its decision on some matters final, which I believe contravenes the purpose of the
FCCPA.
Fourthly, there is confusion on whether the FCCPC is actually a supreme competition regulator
under the FCCPA. This confusion arises when comparing Section 104 which makes the
FCCPA supreme to any other law on competition and consumer protection, with Sections 47(2)
and 105(4), (5) and (6) (a) (b) which recognizes sector-specific regulators established under
the relevant sectoral law. Irrespective of the fact that Sections 47(2) and 105(6) (c)
acknowledges the leadership position of the FCCPC when dealing with sector-specific
regulators, recognizing these sector-specific regulators established by other laws and
mandating the FCCPC to negotiate agreements with them
20
appears to contradict Section 104
which starts with the supremacy phrase, ‘Notwithstanding the provision of any other law but
20
Section 105
6
subject to the Constitution of the Federal Republic of Nigeria…..” The problem here is whether
these sector-regulators will exercise their competition related powers pursuant to their
establishing Act, the negotiated agreement or the FCCPA.
In a similar vein, the experience Nigeria had with SEC when it focused more on securities
regulation which is SEC’s area of primary competence, after it was clothed with competition
law powers over merger in 2007,
21
is a pointer to the fact that there is a likelihood for these
sector-regulators to focus on their primary area of competence as a result of lack of expertise
in competition law. This may lead to under-regulation of competition in those sectors.
Fifthly, there is also some concern with a provision such as Section 156(2) of the Act which
appears to accommodate suits being brought against members of the CCPT for any act done in
pursuance or default in the execution of the provisions of the FCCPA, provided the normal 3
months notice under the Public Officers Protection Act is given. This appears to run against
the understanding that the CCPT is a court of law. If the CCPT is a court of law, then its
members ought to enjoy full judicial immunity from litigation connected with the performance
of their functions. By retaining that provision in the manner it appears in the Act, concerns are
that the FCCPA made away with the longstanding principle of judicial immunity which
protects judicial officers and employees from any liability resulting from the performance of
their statutory judicial functions.
22
The importance of this judicial immunity is very critical in
the administration of justice to the extent that even when a judicial officer is accused of acting
maliciously and corruptly in the performance of his judicial functions, he is still immune to
lawsuits because ‘it is not for the protection or benefit of a malicious or corrupt judge, but for
21
Nnamdi Dimgba The Regulation of Competition Through Merger Control: Case Under the Investments and
Securities Act 2007(Paper presented at the Nigerian Bar Association, Section on Business Law Conference, 16
April 2009).
22
Scott v. Stansfield, L. R. 3 Ex. 220, 223 (1868).
7
the benefit of the public, whose interest it is that the judges should be at liberty to exercise their
functions with independence and without fear of consequences’.
23
In my opinion, the responsibility of a judge is to decide all cases before her/him, which may
include contentious cases which stir the most intense feelings among the parties. Her/his
mistakes can be reversed on appeal, but (s)he ought not be scared that a party who is not
satisfied with the decision may pursue her/him with a law suit by claiming malice or corruption.
Such a burden being imposed on judges will not lead to sound and fearless decisions, but add
more pressure on the judge, as in the case of the FCCPA. This provision is one which ought to
be repealed immediately, because there is a process of dealing with an alleged official
misconduct as provided in Section 43 (2) and (3) of the FCCPA, which empowers the President
to remove such an officer upon the recommendation of the National Judicial Council. This is
equally in line with the 3rd Schedule of the 1999 Constitution of the Federal Republic of
Nigeria.
Another concern which is closely related to the one above is on the single 5 year tenured
appointment of the members of the CCPT.
24
This provision is equally similar to that of South
Africa (SA), the jurisdiction from which Nigeria adopted most of the provisions of the FCCPA
from.
25
The reason why this is a problem for Nigeria is because the FCCPA seems to hold out
a position that the CCPT is a court of law,
26
unlike SA. If this is so, there is a problem in
subjecting its members to a short tenured appointment, especially for a new competition regime
in a developing country. From experience, the longer a judicial officer performs her/his duties
23
ibid.
24
Section 41.
25
Enyinnaya Uwadi, ‘Prospects and Challenges of Implementing Competition Law in Developing Countries: A
Review of the FCCPA 2019’ (LLM Dissertation, University of Reading).
26
Section 43(3).
8
in interpreting the law, the more experienced (s)he becomes.
27
The implication of this provision
is that in every 5 years, new officers who may not have had any prior judicial experience will
be appointed into the CCPT. This does not guarantee the stability much needed by a new
competition regime, as the judicial philosophy of the new members may differ from that of the
previous ones. SA avoided this problem by stating clearly that the Tribunal is a juristic person
(not a court of law)
28
and created the Competition Appeal Court (CAC), a division of the high
court which sits on appeal over the decisions of the Tribunal. The judges of the CAC are
appointed for a fixed unspecified term, until they either cease to be judges of the high court or
resign. A testament to this is Dennis Davis who was appointed in 2000 as the first President of
the CAC, and holds that position to date.
29
This longevity in office of the members of the CAC
could be a testament to the positive impact of competition law jurisprudence in SA. One may
argue on the other hand that the FCCPA addressed this concern by subjecting the CCPT to the
appellate authority of the Nigerian Appeal Court, whose judges have tenure longevity. With all
due respect to my lords, the Nigerian Court of Appeal cannot be equated to the CAC in
competition law context, because it is not a specialized court, and its judges as of today are not
competition law experts.
30
The importance of judicial specialization is that the expertise of
judges in both legal and economic concepts enables them to hear and understand expert
evidence and argument, and make decisions that are legally and economically sound, having
regard to the impact upon the system as a whole.
Furthermore, inasmuch as I commend the strong anti-cartel position of the FCCPA in
criminalizing cartel activities under section 107 to 109, there is a high probability that if a
27
Benjamin Iverson, and others, ‘Practice Makes Perfect: Judge Experience and Bankruptcy Outcomes’ (OBLB
22 December 2017). < https://www.law.ox.ac.uk/business-law-blog/blog/2017/12/practice-makes-perfect-judge-
experience-and-bankruptcy-outcomes> accessed 29 August 2019.
28
Competition Act, s 26(b)
29
Eleanor Fox and Mor Bakhoum, Making Markets Work for Africa: Markets, Development and Competition
Law in Sub-Saharan Africa (OUP 2019) 96.
30
Uwadi (n24).
9
leniency program is not immediately adopted by the FCCPC, this will be an overambitious
target. This is because the FCCPC is not at a vantage position to discover, investigate and
prosecute cartels, owing to the challenges of it being a new agency with a shortage of technical
skills, while operating in a developing country with a weak competition culture.
31
Indeed,
competition authorities from developed countries with their expertise and funding still have
some difficulties in detecting cartels. This led to the adoption of the leniency programs in the
fight against cartels. SA recorded tremendous success in cartel prosecution following the
adoption of the leniency program, but experienced a downward trend upon the criminalization
of cartel in 2016.
32
This should be a lesson for the FCCPC.
Finally, there are some typographical errors, conflicting provisions, and wrong placement of
some sections of the act. This could have been an oversight or clerical error. Whatever the case
may be, it is expected that a legislation which took 17 years, and passed through several review
processes by the stakeholders, lawmakers and president before the latter appended his signature
should be error proof. These errors which will be highlighted below make one wonder if the
government really intended to enact the FCCPA or whether it was done out of political
calculations, having received presidential assent a few days prior to the 2019 presidential
elections, from an incumbent president who was seeking re-election.
i. Section 167(1)(b) in the interpretation section defines “Act” as Federal Competition
and Consumer Protection Act 2017, while Section 168 provides that “This Act may be
cited as the Federal Competition and Consumer Protection Act 2018”.
ii. Part XII under the arrangement of sections reads “Price Mergers” instead of “Mergers”.
This may have been a result of copy and paste, as the preceding Part XI is “Price
31
George Lipimile, CCC Leadership Perspective: Nudging Uganda And Nigeria Towards Competition
Enforcement’ < https://africanantitrust.com/category/nigeria/> accessed 29 August 2019.
32
‘Cartels in South Africa’, Interview with Pieter Steyn (Getting the Deal Through July 2018)
<https://gettingthedealthrough.com/intelligence/172/article/6247/cartels-south-africa> accessed 25 July 2019.
10
Regulation”. Although this error does not reflect in the body of the FCCPA in section
92, it is important for it to be corrected.
iii. The marginal note of section 9 talks about emoluments of the members of FCCPC,
however, the said section only talks about vacancy in the board of FCCPC. Emolument
is nevertheless found in Section 20(4). The same occurred in section 19(1) which talks
about the Executive Vice-Chairman of FCCPC while the marginal note refers to the
Secretary of the FCCPC which is found in Section 19(3).
iv. Section 48(5)(a) made reference to subsection (4), however, having reviewed the Act
and compared it to that of SA from which Nigeria adopted most of its FCCPA
provisions, it is my humble view that the reference to subsection (4) is erroneous and
ought to be subsection (3).
33
Conclusion
From the above issues raised, an amendment of the FCCPA is imminent in order to address the
raised concerns to wit; guarantee the independence of the FCCPC and insulate it from political
interference, correct the errors, as well as address the conflicting provisions, for ease of
enforcement.
Furthermore, institutional roles need to be clearly defined in the FCCPA. It is my view that
sector-specific regulators ought not to interfere with competition matters and should focus on
their areas of core competence pursuant to the supremacy clause. This is to avoid jurisdictional
clashes and more importantly under-regulation of competition in those sectors following from
the experience of SEC as discussed earlier on.
33
Compare this provision with Section 31 of the SA Competition Act.
11
If an amendment is not imminent in the near future, the FCCPC pursuant to its powers under
the FCCPA should collaborate with stakeholders to develop relevant guidelines and address
some of the issues which may not require legislative intervention.
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