FCCPC on BAT, WhatsApp and Coca-Cola: Why Are We Targeting Only Foreign Firms?

 By Chudy Uwadiegwu

The Federal Competition and Consumer Protection Commission (FCCPC) is a Nigerian government agency established to ensure fair competition, protect consumer rights and prevent anti-competitive practices within the Nigerian market. It was formed following the merger of the Consumer Protection Council (CPC) and the Federal Competition Commission (FCC). The FCCPC derives its powers and functions primarily from two key pieces of legislation – Federal Competition and Consumer Protection Act (FCCPA) and the Consumer Protection Council Act. However, it seems that the powers conferred on the FCCPC is being fragrantly abused as seen from its recent activities. From the absurd fine on the British American Tobacco (BAT) and WhatsApp to the emerging scenario with Coca Cola, the FCCPC seem to be biting more than it can chew and taking down the Nigeria ease of doing business rating with it.

In abusing its primary function, the agency has in recent times carved a niche for itself as an antithesis of what a protector of competition and consumer should be particularly where foreign multinational corporations are concerned. Its actions against BAT Nigeria, WhatsApp and now Coca-Cola Nigeria have sparked intense public discourse. While the commission’s mandate to protect consumers is given, its apparent selective focus on foreign entities raises pertinent questions about its fairness, effectiveness and overall agenda.

For example, in the case of Coca-Cola, having duly obtained regulatory approval to use the Less Sugar variant label by the National Agency for Food and Drug Administration and Control (NAFDAC), the agency empowered to conduct laboratory tests on product content and approve labels, the FCCPC waded in querying the actions of its fellow regulator and threatening to fine the company for obeying NAFDAC by using their duly approved label. All these without recourse to its fellow regulatory agency. So is this really a case of government fighting itself and making a foreign investor pay the cost? Again, the FCCPC accused Coca Cola of unfair marketing practice while failing to justify its position. Could it be said then that using a label that was duly approved by NAFDAC after due diligence now constitutes an unfair marketing practice? Under which jurisdiction will this empty charge hold water? And to further create a scenario that makes Nigeria a laughing stock amongst the committee of nations, the FCCPC then issues an official statement like this on X (Twitter) with gusto. How pitiable?

Now let us look at the genesis of the FCCPC’s regulatory shiftiness. Starting out, the FCCPC’s case against BAT Nigeria centred primarily on allegations of unfair trade practices and misleading advertising. The commission accused the tobacco giant of having engaged in advertising campaigns that downplayed the harmful effects of smoking — this without considering the fact that tobacco advertising had earlier been banned in Nigeria with no evidence of violations of same.  The FCCPC argued that these advertisements were deceptive and misled consumers about the risks associated with tobacco consumption. The commission also accused BAT of employing aggressive marketing tactics, including targeting minors and using promotional offers to entice new smokers – without due substantiation. These practices, according to the FCCPC, were detrimental to public health. The FCCPC imposed a fine of $110 million on BAT Nigeria for these alleged infractions. Again we note, that some of these claims are coming out of Simon Coopers, a Law Chamber, where Tunde Irukera was a Senior Partner and actually the lead counsel in the Class Action suit filed against the BAT in 2007 before becoming the Executive Vice-Chairman at the FCCPC. Looking at the prognosis of the claims leading to the fines issued against BAT, it seems that the prosecutor took on the role of the judge in this matter.

In the case of WhatsApp, a popular messaging platform owned by Meta, the FCCPC again displayed acts which seem premeditated as Meta found itself in the crosshairs of the FCCPC over concerns about privacy and data protection – without due substantiation. The commission’s primary allegations were that WhatsApp’s data collection and sharing practices infringed on the privacy rights of Nigerian users. Specifically, concerns were raised about the platform’s terms of service and how user data was handled. The commission coyly argued that WhatsApp’s business practices were not in line with Nigerian consumer protection laws. The question arising therefrom is if Nigeria Data-Protection Law goes against the grain of global best practice and now takes on other considerations not known anywhere else in world except Nigeria?  And for this, WhatsApp was fined a whopping $220 million by the FCCPC for the alleged violations.

The most recent target of the FCCPC’s regulatory shiftiness is Coca-Cola Nigeria and the Nigeria Bottling Company (NBC) over trumped-up allegations of misleading trade description and unfair marketing practice – all coming out of the fact that the company sought and got due approvals from NAFDAC, another government agency with due powers to so approve, before deploying the same label on their less sugar-variant package. By countering the approval of NAFDAC, the FCCPC merely contradicts itself as government cannot cancel out its own action and turn round to blame the companies involved. It is important to note that the outcome of these cases will have significant implications for both the companies and the regulatory landscape in Nigeria while impacting the perception of Nigeria’s investment climate.

The FCCPC’s recent actions against BAT Nigeria, WhatsApp, and Coca-Cola Nigeria underscore a pattern of targeting multinational corporations. These companies are undeniably attractive targets for regulators seeking to make money through fines denominated in hard currency as seen from the BAT and WhatApp fines. However, the question remains: Is this focus justified?

These action cast these foreign firms as victims rather than offenders given the undue sensationalism that the cases have attracted as a result of FCCPC’s penchant for courting cheap publicity. It is essential, therefore, to thoroughly examine the specific allegations against the companies without acceding to claims of the FCCPC which seems directed at an ultimate destination – the issuance of a dollar denominated fine. 

The glaring omission in the FCCPC’s regulatory purview is the local business landscape. Nigerian banks, notorious for subpar service delivery, have escaped relatively unscathed. The airline industry, plagued by incessant flight delays and cancellations, seems to operate with impunity. These sectors, with a direct and daily impact on the lives of millions of Nigerian consumers, appear to be off-the-radar of the FCCPC.

One cannot help but wonder if the commission’s focus on foreign companies a strategic choice or a case of misplaced priorities. Is it easier to take on entities with substantial resources, or is there a deeper-rooted issue at play?

The hefty fines imposed on foreign corporations have raised eyebrows. Critics argue that the FCCPC is morphing into a revenue-generating agency rather than a consumer protection body. While penalties are essential for deterrence, excessive fines can stifle innovation and investment, ultimately harming the economy and by extension, the consumer.

Moreover, the question of fairness arises. If foreign companies are subjected to stringent penalties, shouldn’t local businesses face similar consequences for equivalent offences? A level-playing field is crucial for a healthy business environment.

The FCCPC must adopt a more balanced approach to its regulatory duties. It should widen its scope to include local businesses that infringe on consumer rights. A transparent and equitable enforcement mechanism is essential to build public trust.

Central to the FCCPC’s work is the selection of targets for investigation. What specific criteria does the commission employ in identifying potential violators of consumer protection laws? Is the process transparent, and are there clear guidelines to prevent arbitrary targeting? Understanding the selection process is crucial in assessing the fairness and effectiveness of the FCCPC’s actions.

Moreover, concerns have been raised about the potential for bias in target selection. Are there internal mechanisms in place to ensure impartiality in case selection? Does the FCCPC have a system of checks and balances to prevent undue influence or favoritism? Without robust safeguards, the commission risks undermining public trust in its operations.

Assessing the impact of the FCCPC’s actions on consumer welfare and market competition is essential to evaluating its overall performance. How does the commission measure the benefits accrued to consumers as a result of its interventions? Are there metrics in place to track changes in consumer behaviour, prices and product quality?

Furthermore, the FCCPC’s role in promoting market competition is crucial. How does the commission assess the impact of its actions on market structure and dynamics? Does it consider the potential consequences of its decisions on innovation, investment, and job creation? A comprehensive evaluation of the commission’s impact is vital for optimizing its regulatory mandate.

Furthermore, the commission’s ability to address the challenges posed by local businesses is crucial. How is the FCCPC adapting its strategies to effectively tackle consumer protection issues in Nigerian banks, airlines and other crucial sectors? 

By addressing these questions, the FCCPC can strengthen its credibility and effectiveness as a consumer protection agency. For now its operations raises a lot of dust that more than meets the eye.

* Mr. Uwadiegwu, a commentator on national issues, writes from Abuja