MultiChoice Nigeria challenges regulator’s ₦150 million penalty

On Friday, MultiChoice Nigeria, a subsidiary of the South African pay-TV operator, publicly declared its plan to challenge the verdict handed down by the Competition and Consumer Protection Tribunal in Abuja. The company expressed dissatisfaction, claiming that the tribunal had violated its right to a fair hearing.

The announcement followed a punitive action by the tribunal, which imposed a fine of ₦150 million on MultiChoice Nigeria for defying a court order that had temporarily prohibited the company from increasing the subscription rates for its DStv and GOtv services.

The ruling, issued by a panel of three members headed by Thomas Okosu, additionally mandated MultiChoice Nigeria to compensate its customers with a one-month complimentary subscription for both its DStv and GOtv platforms.

Previously, the tribunal had issued an injunction preventing the subscription-based television service provider from adjusting its subscription fees without providing sufficient notice. This injunction came as a result of a legal motion brought forth by Barrister Festus Onifade, who argued that MultiChoice’s 8-day notification of a pending price hike was insufficient and required extension.

MultiChoice was instructed by the Competition and Consumer Protection Tribunal to delay any plans to increase prices until the resolution of Onifade’s legal challenge. However, it appears that MultiChoice did not comply with the tribunal’s restraining order.

In the legal case identified as CCPT/OP/2/2024, which involved MultiChoice Nigeria Ltd. and the Federal Competition and Consumer Protection Commission (FCCPC), Onifade accused the company of arbitrarily raising subscription prices without providing the legally mandated one-month notice to its subscribers.

As a result, the tribunal, under the leadership of Saratu Shafii, sided with Onifade and issued a provisional order restraining MultiChoice from implementing the proposed price increase that was intended to take effect on May 1, 2024. This order was to remain in place until the tribunal could convene to hear and decide on the Motion on Notice.

In response to the ongoing legal dispute, Moyosore J. Onibanjo, representing MultiChoice Nigeria, raised a preliminary objection. He urged the court to dismiss Onifade’s motion on the grounds that the authority to regulate prices falls under the purview of the President of Nigeria. Onibanjo also argued for the dismissal of the case, citing that a similar dispute had previously been resolved in MultiChoice’s favor.

Onifade, on the other hand, countered by clarifying that his grievance was not with the price increase per se, but rather with the insufficient notice period provided by MultiChoice. He contended that the central issue was the lack of adequate notification, which prompted the tribunal to acknowledge its jurisdiction and subsequently issue an injunction against the company.

Furthermore, Onifade petitioned the tribunal to compel MultiChoice Nigeria to pay a penalty of N1 billion or any other sum the tribunal deemed fit as punishment for the company’s willful defiance and failure to adhere to the interim order issued by the tribunal on April 29, 2024. Despite Onifade’s request for a larger sum, the tribunal ultimately decided to impose a fine of ₦150 million on MultiChoice Nigeria.

Representing the Federal Competition and Consumer Protection Commission (FCCPC), which was also named in Onifade’s lawsuit, counsel Nikiomari Abeke addressed the tribunal. Abeke stated that the FCCPC did not oppose the application put forth by MultiChoice Nigeria and that the commission would respect and comply with the decision made by the tribunal’s panel.

On Friday, June 7, 2024, during the proceedings, the tribunal panel referenced Section 39(2) of the FCCPC Act. This particular section of the legislation confers upon the tribunal the authority to oversee all commercial activities aimed at generating profit within the entire federation. This legal provision was pertinent to the case at hand, as it underlined the tribunal’s jurisdiction and its capacity to adjudicate in matters concerning consumer protection and competition, including the dispute involving MultiChoice Nigeria’s subscription fee increase and the notice provided to consumers.

The tribunal took careful note of the fact that the essence of Onifade’s lawsuit was not to contest the actual increase in subscription prices by MultiChoice, but to challenge the legality of the brief 8-day notice period given to subscribers before implementing the price hike. The panel emphasized that the crux of the matter was the company’s non-compliance with the requirement for a longer notification period, which is considered a consumer right.

In light of this, the tribunal acknowledged that MultiChoice had failed to adhere to the interim orders that had been previously issued. Consequently, the panel rejected the preliminary objection raised by MultiChoice, which sought to have the tribunal decline jurisdiction over the case and to have Onifade’s motion struck out. By dismissing this objection, the tribunal affirmed its authority to proceed with the case and address the issues related to the inadequate notice period provided by MultiChoice to its customers.