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Federal Competition and Consumer Protection Act

Federal Competition and Consumer Protection Act

The Federal Competition and Consumer Protection Act was enacted by the National Assembly in December 2018, and subsequently signed into law by President Muhammadu Buhari in January 2019.

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Wole Obayomi

Partner & Head, Tax, Regulatory & People Services

KPMG in Nigeria

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Federal Competition and Consumer Protection Act

The introduction of a codified set of competition rules into Nigeria’s regulatory oversight framework came as a long anticipated change, to ensure that market distortions across all sectors are minimized and rules of fair play are respected in the market place.

Background

The Act repealed the Consumer Protection Council Act, dissolving the Consumer Protection Council, and established the Federal Competition and Consumer Protection Commission (‘FCCPC’) in its stead. Unlike the defunct CPC, the FCCPC’s oversight extends beyond just consumer protection issues, and covers all entities in Nigeria - whether they are engaged in commercial activities as bodies corporate, or as government agencies and bodies. This Act is poised to introduce ground breaking changes into the Nigerian regulatory regime and the highlights include:

1. Establishment of the Federal Competition and Consumer Protection Tribunal

The Act provides for the establishment of a Competition and Consumer Protection Tribunal (“Tribunal”). The Tribunal is expected to adjudicate over matters which arise from the operation of the Act. Interestingly, the Tribunal is also empowered to hear appeals from, or review any decision from the exercise of the powers of any sector specific regulatory authority in a regulated industry in respect of competition and consumer protection matters.

The Tribunal can impose administrative penalties for breaches of the Act, and oversee forced divestments, partial or total, of investors from companies.

Appeals against the Tribunal’s decisions lie directly to the Court of Appeal, although its decisions are to be enforced after registration at the Registry of the Federal High Court (FHC). It is not clear why a process for registration of its decisions should be necessary at all since that suggests that there might have to be recourse to an extant or new protocol at the FHC for this purpose. Procedurally, that would set the FHC up to serve as a review panel for decisions of the FCCP Tribunal.

ii. Voidance of restrictive agreements

The Act prohibits and voids restrictive agreements between business entities. The description of restrictive arrangements which are likely to prevent, restrict or distort trade is very wide-ranging, and includes prohibition of minimum resale prices (even for patented goods), direct or indirect price fixing, collusive tendering, withholding supply of goods and services from a dealer, exclusionary contractual provisions, etc.

However, some of the prohibited arrangements may be approved by the Commission, if the Commission is satisfied that they are fair and do not eliminate competition.

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