From Victor Osula, Abuja
A Federal High Court, sitting in Abuja, on Thursday, held that the Federal Competition and Consumer Protection Commission (FCCPC) lacked the authority to determine price under a free market economy.
The judgement followed the ruling in a suit seeking to stop Multichoice Nigeria Ltd from implementing its DStv and GOtv new tariffs.
MultiChoice Nigeria had announced new tariffs for DSTV and GOtv from March 1, According to the company’s price review, the cost of DStv Compact bouquet increased to N19,000 and Compact Plus, N30,000. The Premium subscription increased to N44,500. Similarly, GOtv Supa increased to N16,800, while Supa was jerked to N11,400. The tariff on GOtv Max moved to N8,500, while that of GOtv Jinja moved to N3,900.
The FCCPC had summoned Multichoice Nigeria Ltd to provide explanations regarding the March 1 price review of its package. It also warned that failure to justify the price adjustment or comply with fair market principles would lead to regulatory sanctions. It directed the company to maintain its old pricing structure for DStv and GOtv, pending the conclusion of an examination of its proposed increase of the subscription fees.
Challenging the directive in an ex parte motion filed by MultiChoice’s legal team led by Onigbanjo, the company sought an order of interim injunction restraining the FCCPC and its officers from carrying out the threat against it. Justice Omotosho had on March 12, restrained FCCPC from sanctioning the pay-Tv company until the hearing and determination of the substance suit.
Ruling on Thursday, Justice James Omotosho held that since Nigeria runs a free market economy, the Federal Competition and Consumer Protection Commission (FCCPC) lacked the power to interfere in the decisions of private companies to fix their prices.
Emphasising that the FCCPC has no business querying how companies fix their prices in a free market economy, the court held that under Section 88 of the Federal Competition and Consumer Protection Act, only the president of the FRN has authority to regulate prices in a regulated industry and for essential goods.
“The power to fix prices is exclusively that of the president. Any decision taken without such delegation is a nullity”, the court held.
It stressed that Nigeria operates a free market system, where service providers like MultiChoice retain the right to set their prices, with consumers free to accept or reject them.
The court further ruled that FCCPC’s actions, including directing MultiChoice to suspend its price increase, breached the company’s right to a fair hearing, as it appeared to have been selectively targeted. It also dismissed as untenable FCCPC’s contention that MultiChoice held a dominant market position.
“The use of services like those provided by the plaintiff is discretionary and not essential. Nigeria can do without it”, Justice Omotosho held, warning that attempts to fix prices by regulatory bodies could scare off investors and harm the nation’s economy.
According to the court, while the FCCPC may investigate market practices, it cannot impose price controls without proper legal backing.
However, the court dismissed MultiChoice’s suit against the FCCPC. Justice Omotosho held that the suit constituted an abuse of the process of the court, having been filed after a similar suit by Festus Onifade on the same issue was already being determined by another court.
The court held that Multichoice Nigeria Ltd could only ventilate the issues in the suit filed by Onifade through a counter claim rather than a separate suit.
