A court in Uganda has ordered MTN Uganda to pay a sum of Shs 2.3bn (about N131 million) to EzeeMoney Ltd for sabotaging its business.
EzeeMoney is an e-transaction business which obtained a contract from MTN for the provision of digital transmission [E1] and 30 fixed telephone lines to carry out its mobile money business.
After both parties agreed to the terms of the contract, EzeeMoney contracted Yo! Uganda Limited (YUL) to implement the service after approval by the Uganda Communications Commission. 7711 was chosen by EzeeMoney as the short code to enable its customers to subscribe for e-money services.
However in 2013, MTN cancelled the contract, saying EzeeMoney is a direct competitor to its mobile money business.
EzeeMoney took MTN to court, saying MTN’s action “restricted and distorted competition.” It also said MTN damaged its ties with YUL and deprived it of services of other telecommunications operators. It argued that MTN used its exclusivity agreements to stop its agents from working for any other firm with similar business, further limiting competition.
The presiding judge eventually ruled on November 6, ordering MTN to stop acting in an unlawful and anti-competitive manner, which denies other businesses an opportunity to prosper. The Presiding judge, Justice Adonyo said MTN should pay Shs 800m to EzeeMoney in general damages for loss of business and also a penalty of Shs 1.5bn in punitive damages to deter not only MTN but also warn other companies against uncompetitive business tactics.
