LEGAL REGIME FOR CONSUMER PROTECTION AND COMPETITION IN NIGERIA

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Introduction

Consumer protection is the practice of safeguarding buyers of goods and services, and the public, against unfair practices in the marketplace.[2] Consumer protection laws are designed to protect and promote consumer interest. Competition rules in Nigeria are made to promote healthy competition in Nigerian markets at all levels, by eliminating monopolies, prohibiting the abuse of a dominant market position and penalizing other restrictive trade and business practices.[3]

There are several reasons for Consumer Protection in Nigeria, and these reasons include:

  • To ensure that consumers have accurate information to make informed choices based on their preference;
  • To make sure providers of goods and services observe all laws regarding safety and quality standards;
  • To advance markets for products and services that operate transparently and efficiently to facilitate access and innovation;
  • To ensure restitution and compensation for buyers of defective goods/services;
  • To ensure that consumers get value for money spent; and
  • To promote fair competition through consistent enforcement of Federal consumer protection and competition laws.

Legislative Provisions Governing Consumer Protection in Nigeria

The principal legislation which regulates and protects the rights of consumers in Nigeria is the Federal Competition and Consumer Protection Act, 2018 (“FCCPA”) (“the Act”).[4] The FCCPA established the Federal Competition and Consumer Protection Commission (“FCCPC”) (“the Commission”)[5] to protect the interests and welfare of consumers by providing consumers with a wider variety of products at competitive prices and to prohibit unconscionable business practices.

The Act is applicable to all commercial activities within or having effect in Nigeria, 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.[6] It is applicable extraterritorially to any prohibited conduct by a Nigerian citizen or a person ordinarily resident in Nigeria, a corporate body registered in Nigeria or carrying on 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 the business, part of the business or any asset of the business in Nigeria.[7]

Prior to the enactment of the Act, the Consumer Protection Council Act 2004 (“CPA”)[8] protected the rights of consumers in Nigeria and established the Consumer Protection Council (“CPC”). The FCCPA repealed the CPA[9] and the FCCPC assumed all the rights, powers and functions of the CPC. To aid the FCCPC in discharging its functions and duties, the FCCPA empowered the FCCPC to make rules and regulations for the effective implementation and operation of the provisions of the Act.[10]

The Act thus empowered consumers with the following rights: Right to select suppliers,[11] Right to cancel advance reservation booking or order,[12] Right to choose or examine goods,[13] Right to return goods,[14] Right to fair dealings,[15] Right to safe, good and quality goods and services.[16]

Other relevant legislations for the regulation of consumer goods/services include: The Standard Organization of Nigeria Act,[17] the National Agency for Food Drugs Administration and Control Act,[18] the Quality of Service Regulation,[19] the Utilities Charges Commission (amendment) Act,[20] Counterfeit and Fake Drugs and Unwholesome Processed Foods (Miscellaneous Provisions) Act,[21] etc.

It is noteworthy that the FCCPA provides that the provisions of the Act shall override the provisions of any other Iaw in all matters relating to competition and consumer protection, subject to the provisions of the Constitution of the Federal Republic of Nigeria.[22]

Regulatory Agencies in Charge of Consumer Protection

The Federal Competition and Consumer Protection Commission (“FCCPC”) is the apex consumer protection agency in Nigeria. The FCCPC was established by the FCCPA to administer and enforce the provisions of the FCCPA.

The Competition and Consumer Protection Tribunal (“CCPT”)[23] is the adjudicatory authority for determination of matters arising from the operation of the Act.[24] The CCPT amongst others, has the power to: hear appeals from or review any decision of the FCCPC taken in the course of implementation of any of the provisions of the FCCPA; hear appeals from, or review any decision from, the exercise of the powers of any sector-specific regulatory authority in a regulated industry, with respect to consumer protection matters; and issue such orders as may be required of it under the FCCPA.[25] Any order, ruling, award or judgement of the CCPT is binding on the parties and must be registered with the Federal High Court of Nigeria solely for the purposes of enforcement.[26] Appeal of an order, ruling, award or judgment of the CCPT is to be made within 30 days to the Court of Appeal of Nigeria.[27]

Powers of the FCCPC[28]

The Commission is empowered to:

  1. Prevent the circulation of goods or services which constitute a public hazard or an imminent public hazard;
  2. Compel manufacturers, suppliers, dealers, importers, wholesalers, retailers, providers of services and other undertakings to;
  • Comply with the provisions of this Act;
  1. Certify that all standards are met in their goods and services;
  2. Give public notice of any health hazards associated with their goods or services;
  3. Seal up any premises on reasonable suspicion that such premises contain or is being used to produce or disseminate goods or services that are substandard, hazardous or inimical to consumers’ welfare.

Investigation into breach of consumer protection rights in relation to the quality and functions of goods and services may be triggered by individuals, accredited consumer protection groups, industry sector regulator, and FCCPC of its own motion.[29]

Application of the FCCPA

On Monday, October 18th 2021, the Commission executed a judicial search warrant and order of the Federal High Court to search and gather information/evidence in furtherance of an open and active investigation of potential infringements of the Federal Competition & Consumer Protection Act 2018 (FCCPA) on five (5) companies within the shipping and freight forwarding industry. Prior to the execution of the search warrant and order of the court, the Commission had gathered credible and actionable intelligence sufficient to establish probable cause and reasonable basis for the court to issue a warrant and enter an order permitting executives and operatives of the Commission to conduct a search of the companies named in the warrant and order. Essentially, the intelligence indicate that the five companies identified in the warrant (as well as others who were neither subject of the warrant nor targets of the search) have over a period of time, within and outside Nigeria participated in, or coordinated anticompetitive conduct that materially affect or distort the market in Nigeria, including preventing fair competition, and engendering continuing high freight rates and associated costs to, and in Nigeria.[30]

On Tuesday August 11, 2020, the Federal Competition and Consumer Protection Commission (FCCPC) became aware of representations appearing to show that a consumer, (and presumably others) purchased Laziz vegetable oil in sachets produced by Apple and Pears Ltd., from their retail/storage location in Abuja. The representation suggested that the food products purchased were expired, even at the time of purchase. Upon further investigation and reconnaissance, the Commission uncovered what appears to be unapproved and unsafe production, decanting, or repackaging of vegetable oil at the Abuja location. The Commission placed the location in Abuja under seal and stated that it will remain shuttered until the Commission and NAFDAC have confiscated the expired or unwholesome products, and are otherwise satisfied that Apples and Pears can, and will operate safely and legally.[31]

Conclusion

Since the FCCPC was passed into law in January 2019, the regulatory landscape of Nigeria’s competition and consumer protection regime has been greatly improved. Citizens have more confidence in demanding respect for their rights and the Commission has been very responsive in instilling and enforcing consumers’ rights and stabilizing competition in the Nigerian economy.

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_________________________________________________________

For further information on this article and area of law, please contact

Oreoluwa Adebayo at: S. P. A. Ajibade & Co., Lagos

by telephone (+234.1.4729890), fax (+234.1.4605092)

mobile (+234.809.790.4717, +234.810.318.8416) or

email: oadebayo@spaajibade.com

www.spaajibade.com

_________________________________________________________

[1] Oreoluwa Adebayo, Associate Corporate Finance & Capital Markets Department, SPA Ajibade & Co., Lagos, Nigeria.

[2] Wikipedia, ‘Consumer protection’ available at <https://en.wikipedia.org/wiki/Consumer_protection>, accessed on 14/12/2021.

[3] Explanatory Memorandum, FCCPA.

[4] Federal Competition and Consumer Protection Act, 2018.

[5] Section 3, FCCPA.

[6] Section 2, FCCPA.

[7] Section 3, FCCPA.

[8] Cap C25 LFN 2004.

[9] See Section 165, FCCPA.

[10] Section 163, FCCPA.

[11] Section 119, FCCPA.

[12] Section 120, FCCPA.

[13] Section 121, FCCPA.

[14] Section 122, FCCPA.

[15] Section 124, FCCPA.

[16] Section 130, FCCPA.

[17] Standard Organisation of Nigeria, 2015.

[18] Cap N.1, LFN 2004.

[19] Quality of Service Regulations, 2013.

[20] Utilities Charges Commission (amendment) Act, 2016.

[21] Cap C.34, LFN 2004.

[22] Section 104, FCCPA.

[23] Established pursuant to section 39 of the FCCPA.

[24] Section 39(2), FCCPA.

[25] Section 47(1), FCCPA.

[26] Section 54, FCCPA.

[27] Section 55(1), FCCPA.

[28] Section 18, FCCPA.

[29] Section 146, FCCPA.

[30] FCCPC, ‘Federal Competition & Consumer Protection Commission Launches Cartel and other Anti-Competitive Conduct Investigation into Shipping and Freight forwarding Industry’, available at https://www.fccpc.gov.ng/news-events/releases/2021/10/24/federal-competition-and-consumer-protection-commission-launches-cartel-and-other-anti-competitive-conduct-investigation-into-shipping-and-freight-forwarding-industry/, accessed on 15/12/21.

[31] FCCPC, ‘Sealing of Apples & Pears Business Location for Expired/Expiring Inventories and Unsafe Food Product Handling’, available at https://www.fccpc.gov.ng/news-events/releases/2020/08/13/fccpc-seals-apples-and-pears-business-location-for-expired-slash-expiring-inventories-and-unsafe-food-slash-product-handling/, accessed on 15/12/21.

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