On Wednesday, July 5, 2023, the Federal Competition & Consumer Protection Commission (“Commission”) issued a Release/Advisory informing and discouraging the Association of Mobile Money and Bank Agents in Nigeria (AMMBAN) its members, and Point of Sale (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 efforts to uniformly determine, announce or implement changes in price[s] of services they render.
The Commission from monitoring news channels, and continuing surveillance regarding subjects of regulatory concern has become aware of what appears to be an adamance of AMMBAN and insistence on a membership-wide implementation of illegal conduct.
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.
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.
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 (FCCPA), 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 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.
The FCCPA provides the Commission with statutory tools to ensure compliance and penalise violations of the law. As previously noted, some of these penalties are stiff.
While the Commission continues to provide consideration to, and for small businesses, enforcing the law must remain non-negotiable. Accordingly, the Commission in escalating this in accordance with the FCCPA and ancillary instruments, has entered an Order & 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.
Consequently, 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 through service on AMMBAN. 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 on 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 a violating company or business.
The Commission 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.
In addition to stipulated statutory consequences, although the Commission prefers not to disrupt the business and operations of small enterprises, it will, (if it becomes necessary) prohibit merchant services and privileges to PoS operators or AMMBAN members who persist in conduct that is inconsistent with law and economic efficiency.
