Nigeria’s consumer watchdog, the Federal Competition and Consumer Protection Commission (FCCPC) yesterday warned Point of Sales (PoS) operators to desist from actions which might lead them to pay between N1million and N10million as fine for violating the provisions of the FCCPC Act 2018.
The PoS operators, acting under the aegis of Association of Mobile Money and Bank Agents in Nigeria (AMMBAN), has lately been pushing for a hike in service charges, citing inclement business operating environment, among others, as reason for their action.
AMMBAN National Public Relations Officer (PRO), Oluwasegun Elegbede, in a telephone conversation with The Nation, had said the group would go ahead with the service charge hike, despite the verbal intervention of FCCPC and the Central Bank of Nigeria (CBN)
Executive Vice Chairman/CEO of FCCPC, Babatunde Irukera, in a statement entitled: Update on Potential Anti-competitive Conduct in Association of PoS Operators’ Statement of Setting Prices for Service, said Commission has advised PoS operators that “violation of an order of the Commission attracts additional consequences apart from the underlying illegal conduct that is the subject of the order such as up to N10 million for corporate entities and N1 million and or a prison sentence of up to three months for individuals”.
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“In addition to stipulated statutory consequences, although the Commission prefers not to disrupt the business and operation of small enterprises, it will (if it becomes necessary prohibited services and privileges to PoS operators or AMMBAN members who persist in conduct that is inconsistent with law and economic efficiency,” Irukera said.
Reacting to the FCCPC warning, AMMBAN said it was studying the development and would respond accordingly.
Elegbede said: “The Secretariat received the purported letter and is studying it. A befitting response to clarify our position and next move will be made in no time.”
He recalled that on Wednesday July 5, 2023, the FCCPC issued a release/advisory informing and discouraging AMMBAN its members and PoS operators from engaging in “coordinated or concerted efforts (otherwise known as price fixing or cartel) and or acting in furtherance of any such coordinated or concerted effort to uniformly determine, announce or implement changes in prices of services they render”.
Irukera said the Commission from monitoring news channels and continuous surveillance regarding the subject of regulatory concern has become aware of what appears to ‘be and adamance of AMMBAN and insistence on a membership-wide implementation of illegal conduct’.
“Specifically, certain news coverage and reportage suggest that the supposed national publicity Secretary of the purported AMMBAN has dismissed regulatory statement while confirming a resolve to execute what has been declared illegal which is a concerted and coordinated approach to uniformly fixing and implementing prices or modifications thereto.
The commission is concerned about such statements and even more so such conduct. The impunity associated with defiance or persisting in a course of action prohibited by law and clearly forbidding by regulators usually constitute aggravating factors in determining penalties for illegal conduct where applicable.
Considering that membership of AMMBAN probably consists mainly of small businesses and creates employment for young and mostly vulnerable citizens, the commission adopted advocacy and business education as a tool to promote and enforce obedience to the law. This is prudential, not weak or helpless approach to ensuring compliance and it underscores the commission’s proportionality approach to its consequence management system and interpretation of the law.
“To be clear the Commission has not sought to limit the prerogative of PoS service providers to determine and set prices for services in a manner of their choosing subject to Section 127 of the Federal Competition and Consumer Protection Act 2018 which prohibits manifestly unjust or exploitative prices.
“As a matter of fact and to the contrary, the Commission respects and encourages a pricing methodology that is the product of market forces in a free competitive and undistorted market. There’s no evidence that the PoS market lacks sufficient players or competition in Lagos which is the subject of the announcement or anywhere else for that matter.
“The Commission welcomes the inherent powers and discretion of each PoS operator to set their prices based on their own internal mechanisms and relevant markets providing consumers with choices and the best possible prices while ensuring profitability. The FCCPA provides the Commission with statutory tools to ensure compliance and penalize violations of the law. As previously noted some of these penalties are still.
“While the Commission continues to provide consideration to and for small businesses and forcing the law must remain non-negotiable. Accordingly, the Commission in escalating this in accordance with the FCCPA and ancillary instruments have entered an Order and Notice (ONC) of the Commission to AMMBAN, persons identified as executives, members and non-member PoS operators to cease and desist from conduct that constitute an infringement of the law,” he explained.
According to him, the ONC was issued by the Commission and served on AMMBAN. The commission recognises that not all members can be personally served or will become aware. In addition, some persons such as non- AMMBAN members may become subject to the ONC.
“Accordingly, the Commission has and is by this again publicly disseminating the ONC. Members are however invited to consider sufficiency of service of the ONC under Section 158 (4) of the FCCPA which deems such service of their association or executives as adequate and acceptable.
“This cautious and collaborative approach underscores the Commission’s desire for a cooperative attitude to compliance. The ONC however conveys the Commission’s will to enforce the law including and up to prosecuting violators and affiliates who may otherwise be statutorily liable for the conduct of violating company or business,” Irukera said.