Why Nigeria is Ripe for a Competition Law

As these laws facilitate private sector participation and open the door to increased economic competitiveness among players, genuine concerns emerge as to the mechanism for promoting healthy competition among the market players.  It is therefore important that a specific Competition Law (different from the sector-specific laws and which should be administered by a distinct body), be enacted to govern all trade and business practices with the aim of prohibiting anti-competitive practices between firms, such as agreements to fix prices or terms of trade or to carve up markets or customers; discriminate between customers without legitimate basis and; prevent, restrict or distort competition as well as abuse a dominant market position.

What is the New Bill About?

The Bill presently before the National Assembly combines the regulation of Competition and Consumer Protection. Competition law is not, sticto sensu, about consumer protection, or trading standards, although both may benefit from the application of competition law. It is therefore a common practice in most jurisdictions to vest in only one agency, the powers to regulate both Competition and Consumer Protection.

The current Bill is for an Act “to repeal the Consumer Protection Act, Cap C25, LFN, 2004 and establish the Federal Competition and Consumer Protection Commission and the Competition and Consumer Protection Tribunal; for the development and promotion of fair, efficient and competitive markets in the Nigerian economy, facilitate access by all citizens to safe products, secure the protection of rights for all consumers in Nigeria and for other related matters” – (see the House of Representatives Bill No. HB. 15.07.60 of 24th August, 2015).

The objectives of the Law as stated in Section 1 of the Bill are to: a) promote and maintain competitive markets in the Nigerian economy; b) promote economic efficiency; c) protect and promote the interests and welfare of consumers by providing consumers with competitive prices and product choices; d) prohibit restrictive business practices which prevent, restricts or distorts competition or constitute an abuse of a dominant position of market power in Nigeria; and contribute to the sustainable development of the Nigerian economy.

The Federal Competition and Consumer Protection Commission (“the Commission”) established in the Bill has superior powers to all other regulatory bodies created under any laws, such as the Securities and Exchange Commission (“SEC”), Nigerian Communications Commission (“NCC”) etc. but subject to the provisions of the Constitution of the Federal Republic of Nigeria; in all matters relating to competition and consumer protection.

Effectively, the Bill regulates all competition-related issues which are of serious concern to market players such as; restrictive agreements (restraint of trade), monopoly, abuse of a dominant position, price regulation, mergers, business combination and the issues concerning consumer rights. Anti-competitive offences are also created; such as price-fixing, bid-rigging, giving of false or misleading information and failure to attend or give evidence when summoned; and appropriate sanctions and penalties are specified.