5 interesting facts you need to know about the new Federal Competition and Consumer Protection Act

5 Interesting facts you need to know about the New Federal Competition and Consumer Protection Act

       Credit: von.gov.ng

Great news! President Muhammadu Buhari just signed into law the Federal Competition and Consumer Protection Bill thereby making it the Federal Competition and Consumer Protection Act.

The New Federal Competition and Consumer Protection Act repeals the Consumer Protection Act, Cap. 25, Laws of the Federal of Nigeria, 2014.

The Act seeks to ensure economic efficiency, maintain competitiveness in the Nigerian Market, encourage innovation, prohibit restrictive business practices and protect the welfare of consumers most especially as regards the right to choose and have access to a variety of products and services at fair and competitive prices.

The Act has introduced new provisions that if implemented, would revitalize the economy significantly. I would highlight five of them for the purpose of this blog post.

1. Scope of Application

The Act applies to and is binding on all Corporate bodies engaged in commercial activities within Nigeria including Federal, State, or Local Government agencies involved in economic activities aimed at making profit and geared towards the satisfaction of public demand. 

It also applies to commercial activities outside Nigeria by a citizen of Nigeria or a person resident in Nigeria including Foreign Companies incorporated in Nigeria or carrying on business in Nigeria. So companies like Uber, Multichoice, MTN and Amazon are bound by this new Federal Competition and Consumer Protection Act.

2. Establishment of the Competition Commission

The Federal Competition and Consumer Protection Act establishes a Federal Competition and Consumer Protection Commission also known as the "Competition Commission to administer the Act and the Tribunal as well as to handle issues and disputes arising from the operations of the Act.

3. Elimination of Anti-Competitive  Business Practices

The Act prohibits all forms of agreements made to restrain competition such as agreements for price fixing, price rigging, collusive tendering etc (with a specific exemption for collective bargaining agreements, employment etc). By virtue of this Act, a situation where the Union of Petroleum Marketers or union of hairdressers decide to provide their products and services at a uniform price is prohibited and considered illegal. The commission is also empowered to investigate cases of monopoly in a particular sector of the economy and consider actions to be taken in order to prevent adverse effects that would lead to a restraint of trade in that sector.

The Act also empowers the President to regulate the prices of certain goods and services on the recommendation of the Competition Commission.

4. Mergers and Acquisition

The New Act divests the exclusive powers of the Securities and Exchange Commission to approve Merger transactions and places the responsibility of approving merger transactions on the Competition Commission.

In considering a proposed merger, the commission shall determine whether or not the merger is likely to substantially prevent or lessen competition or result in technological efficiency or other pro-competitive gain is to be obtained if the merger is granted or whether or not the merger cannot be justified on the grounds of public policy.

Under the Act, the commission is entitled to receive a percentage of all the fees chargeable by other regulators for licence applications, processing and issuance.

5. Penalties for offences against the Act

The Act prescribes penalties against any person who enters into an agreement to restrict trade competition to imprisonment not exceeding a term of five years or N5,000,000 (Five Million Naira ) fine or both fine and imprisonment.

As for Corporate bodies that commit an offence under the act, they are liable to pay 10% of its turnover in the preceding business year and each director of the Company shall be liable on conviction to imprisonment for a term not exceeding three years or to payment of fine not exceeding N50,000,000.00(Fifty Million Naira) or to both imprisonment and fine.

The Act is really comprehensive and I believe if implemented, would boost economic productivity and encourage consumer protection.

There is also good news for Lawyers as there is enough room for specialization and development of the law, hence more people are empowered and the economy is diversified.

In what ways do you think the New  Competition and Consumer Protection Act would protect you the consumer?

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