Nigeria’s agency imposes N1m fine on PoS operators for illegal charges

July 24, 2023

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The Federal Competition and Consumer Protection Commission (FCCPC) will henceforth fine any member of Association of Mobile Money and Bank Agents in Nigeria (AMMBAN) and Point of Sale (PoS) operators from engaging in coordinated price-fixing or cartel or acting in furtherance of any such coordinated or concerted efforts to uniformly determine, announce or implement changes in price[s] of services they render.

The commission in a statement signed by its Chief Executive Officer, Babatunde Irukera, advises 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 N10,000,000 for corporate entities; and N1,000,000 and or a prison sentence of up to three months for individuals.

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 (FCCPA), which prohibits manifestly unjust or exploitative prices.

He noted that the Commission respects and encourages a pricing methodology that is the product of market forces in a free, competitive and undistorted market. There is 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”.

Specifically, certain news coverage and reportage suggest that a supposed national publicity secretary of the purported AMMBAN has dismissed regulatory statements 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 forbidden by regulators usually constitutes aggravating factors in determining penalties for illegal conduct where applicable.

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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 the tool to promote and enforce obedience to the law. This is a 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.