The fine is a consequence of what the tribunal deemed discriminatory practices affecting Nigerian users’ data.

The tribunal, under the leadership of Thomas Okosun in Nigeria, upheld the FCCPC’s penalty, rejecting appeals from WhatsApp and Meta, which had sought to overturn the decision. 

The legal team, headed by Professor Gbolahan Elias (SAN), argued that the penalty was unjustified, pointing to vague directives, violations of Nigerian law, and an allegedly flawed process. They maintained that the $220 million fine was disproportionate and unsupported by Nigerian legislation.

However, the FCCPC, represented by Babatunde Irukera (SAN), stood firm asserting that the penalty was intended not as a punishment but as a remedy for the harm caused by Meta’s alleged data exploitation and violation of consumer rights in Nigeria. 

The Commission had raised alarms over Meta’s invasive practices, claiming that the company misused private data and infringed upon Nigerian consumers’ rights.

In the midst of legal arguments, Meta argued that the fine should be annulled due to procedural errors, including the lack of clarity on the penalty’s calculation. The company’s legal team insisted that implementing the FCCPC’s requirements would be both technically impossible and financially burdensome.

But the tribunal ruled in favour of the FCCPC, highlighting that Meta had failed to provide substantial evidence to disprove the claims against them.

Okosun, delivering the verdict, clarified that the FCCPC had acted within its legal authority, emphasising that the regulatory body had conducted a fair hearing process, refuting WhatsApp’s allegations of unfair treatment.

In line with its ruling, the tribunal mandated that Meta reinstate Nigerian users’ right to control how their data is shared, with a compliance letter due by July 1, 2025.

WhatsApp must also revise its privacy policy to meet the commission’s requirements, ensuring explicit user consent for data sharing. 

Furthermore, Meta has been instructed to cease sharing Nigerian users’ information with third parties, including Facebook, and revert to its 2016 data-sharing policy.

Alongside the financial penalty, Meta must also reimburse the FCCPC $35,000 for the investigation costs incurred. The tribunal has given the company 60 days, until April 30, 2025, to settle the $220 million fine.

Recently, large fines have been imposed on tech giants, particularly under data protection laws, with Meta already facing similar penalties in the European Union, not just Nigeria, and WhatsApp, on the other hand, has defended itself.  

In a statement the platform stated that it had globally informed users about how interactions with businesses would be handled in 2021, despite initial confusion.

High-cost borrowing often forces people to take new loans to pay off existing debts, creating a vicious debt cycle, particularly affecting lower-income Nigerians.

The number of approved digital lenders in Nigeria has increased by 79.77% since April 2023, reaching 311 registered lenders by September 2024. 

This growth aligns with a 329.28% year-on-year rise in personal loans, which totalled ₦7.52 trillion in March 2024, according to the Central Bank of Nigeria (CBN). 

The Federal Competition and Consumer Protection Commission (FCCPC) registers digital lenders under the Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending 2022, requiring registration and approval. 

Fully approved lenders grew from 119 to 269, while conditional approvals fell from 54 to 42. The rise in consumer credit is linked to inflation, which reached 32.15% in August 2024, and the increasing demand for accessible loans through fintech.

Growing Consumer Credit and Inflation

The CBN attributes the surge in consumer credit to inflation and the popularity of loan apps. A 2023 report from Piggyvest showed that four in ten Nigerians are in debt, with 26% owing loan apps. Another study from SBM Intelligence found 27% of Nigerians, across income categories, turning to loan apps to cope with living expenses amidst record inflation. 

Trade Lenda’s CEO Adeshina Adewumi noted that “rising cost directly impacts the need to access more funds.” Similarly, Money Lenders Association President Gbemi Adelekan confirmed that “demand for loans has increased double-fold due to hardship,” with loan demand growing at 5% monthly, according to Babatunde Akin-Moses of Sycamore.

The Impact on Borrowers and Economic Distress

Loan apps are popular for their accessibility and speed. Apps like FairMoney, Carbon, and Palmcredit have made it possible for people to get quick, unsecured loans. 

According to recent reports, these platforms have collectively issued billions of naira in loans. The apps appeal because they require no collateral, have quick processing times, and are available to people without access to traditional banking. 

CBN governor Olayemi Cardoso predicted that mobile money and digital lending would drive service sector growth, with more people borrowing. 

However, Prof. Bongo Adi from Lagos Business School noted that most loans are for consumption, pushing borrowers into deeper debt. His research shows that borrowers spend their loaned funds quickly, then struggle to repay, driving them further into financial instability.

Loan Sharks and the Debt Trap

Loan apps often charge high interest rates, sometimes reaching 90%, mimicking traditional loan sharks. Borrowers face challenges with high repayment demands, hidden fees, and aggressive recovery methods, such as harassment and public shaming. What initially seems like a short-term solution can quickly spiral, leading to a debt trap that is difficult to escape.

On average, digital loan apps charge monthly interest rates of 15-30%, with annual rates surpassing 200% in some cases.

These add to financial distress and mental health issues, with anxiety and depression on the rise among borrowers. 

Poverty and Debt’s Impact

Approximately 70% of Nigerians live on less than ₦1,500 per day. High-interest loan repayments take away household incomes, forcing families to sacrifice essentials and perpetuating the poverty cycle. 

This financial limitation affects the current generation and also risks intergenerational poverty, impacting children’s future education and growth opportunities.

Regulatory Challenges and the Need for Reform

While the FCCPC introduced a regulatory framework in 2022, enforcement remains challenging due to the volume of loan apps and the complexity of monitoring their practices. 

Former FCCPC CEO Babatunde Irukera has highlighted the issue of multiple loans from various apps leading to unmanageable debt. A centralized credit information system will improve accountability by offering lenders insights into borrower histories, promoting better lending methods. 

However, gaps in consumer protection remain, pointing to the need for stronger regulations, including possible interest rate caps, transparency requirements, and limitations on debt collection methods.

Proposed Solutions: Alternatives and Financial Literacy

Expanding financial literacy programs could empower Nigerians to make better borrowing decisions. Community-based lending models, like cooperatives and savings groups, could provide low-interest options. 

Collaboration between NGOs, financial institutions, and the government could help provide affordable loans and support financial education. With these measures, Nigeria can address the risks associated with digital loan apps while providing safe financial alternatives for those in need.

Strengthen Regulatory Frameworks

• Enforce Existing Regulations: The Federal Competition and Consumer Protection Commission (FCCPC) and the Central Bank of Nigeria (CBN) should enforce existing regulations more strictly to ensure compliance by digital lenders.
• Update Guidelines: Regularly update the Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending to address emerging issues and close loopholes.

Increase Financial Literacy

• Educational Programs: Implement nationwide financial literacy programs to educate consumers about responsible borrowing, the risks of high-interest loans, and how to read loan terms and conditions.
• Workshops and Seminars: Conduct workshops and seminars in communities to raise awareness about the dangers of falling into debt traps and how to avoid them.

Promote Alternative Financial Services

• Microfinance Institutions: Encourage the use of microfinance institutions that offer lower interest rates and more flexible repayment terms.
• Community Savings Groups: Support the establishment of community savings groups where members can pool resources and access funds without resorting to high-interest loans.

Enhance Consumer Protection

• Transparent Loan Terms: Ensure that loan apps provide clear and transparent information about interest rates, fees, and repayment terms.
• Complaint Mechanisms: Establish strong complaint mechanisms for borrowers to report issues with loan apps and seek redress

Encourage Responsible Lending Practices

• Interest Rate Caps: Implement interest rate caps to prevent loan apps from charging exorbitant rates.
• Ethical Standards: Promote better lending processes among digital lenders, including fair treatment of borrowers and avoidance of harassment and blackmail.

Support for Borrowers in Debt

• Debt Relief Programs: Develop debt relief programs to help borrowers manage and reduce their debt burden.
• Counselling Services: Provide access to financial counselling services to help borrowers develop repayment plans and manage their finances effectively.

Addressing stakeholders during a one-day engagement on exploitative pricing in Uyo, Akwa Ibom State,Mr. Tunji Bello, FCCPC Chief Executive Officer, revealed that the commission’s investigations in major cities have uncovered troubling practices.

In the poultry sector, Bello highlighted how influential players are dictating prices, severely impacting smaller producers. “Small poultry owners previously sold a day-old chick for between N480 and N590 and still made a profit.

However, the entry of two major market players changed that,” he stated, choosing to withhold their names for now.

He explained that these entities injected substantial capital into the market, ultimately controlling 80 to 90% of the poultry sector.

“These big players used their financial clout to hijack the local poultry farmers’ association, mandating that day-old chicks be sold at N1,350, which contradicts the economic principle that greater production typically lowers prices,” he added.

Bello further emphasised that this manipulation is why prices remain high despite various governmental support for the poultry industry.

Over the past year, the Federal Ministry of Agriculture and Food Security has assisted poultry farmers with broilers, vitamins, feeds, and cash through numerous interventions across Nigeria’s six geopolitical zones.

He also pointed to exploitative pricing in the packaging sector, citing a cartel of five dominant players responsible for importing and supplying packaging materials.

“They operate in a mafia-like manner. If you attempt to negotiate with one, they tip off the others, ensuring uniform pricing,” Bello lamented.

Regarding the lack of sanctions against these sharp practices, Bello explained that the FCCPC initially opts for dialogue in the spirit of democracy rather than enforcing the act, which carries severe penalties, including hefty fines and jail time.

He urged the business community in Akwa Ibom to collaborate with the FCCPC to tackle exploitative pricing and promote market integrity.

To alleviate the economic burden on consumers, Bello noted that President Bola Tinubu has introduced several relief measures, including the removal of tariffs on food imports, VAT on pharmaceuticals and medical devices, tax waivers for businesses and public transport, and facilitating easy credit for converting vehicles from petrol to CNG.

“It is only fair that our businessmen and traders share the benefits of these measures with consumers through reduced prices,” Bello stated.

Several speakers at the event expressed concern about the high cost of doing business in Nigeria, particularly citing rising interest rates, multiple taxation, and increased electricity tariffs as significant challenges.

Earlier, Executive Commissioner for Operations at the FCCPC, Dr. Abdullahi Adamu, called on stakeholders to provide suggestions to address cartel activities and improve the market situation in the country.

The FCCPC stated that such disruptions have far-reaching consequences on individuals, businesses, and the economy at large.

In accordance with the Federal Competition and Consumer Protection Act (FCCPA) 2018, the FCCPC outlined that bank customers are entitled to quality service, and any interruptions in accessing essential financial services can be deemed as a failure to meet this standard.

“A key provision is the right to quality service, which mandates that all service providers, including banks, maintain acceptable levels of functionality and reliability,” the FCCPC stated.

The Commission noted that, in today’s increasingly cashless Nigerian economy, online banking has moved from a convenience to a necessity. Technical issues that prevent customers from engaging in transactions or accessing their funds could be considered a violation of the right to reasonable access to services. 

This right, as stipulated in the FCCPA, is essential in an environment where access to funds is critical.

The FCCPC also stressed the importance of transparency from Nigerian banks during such disruptions. According to the Act, service providers are required to communicate openly and accurately with customers, particularly when service outages occur. 

The Commission noted, “During service disruption, it is essential that banks keep their customers fully informed about the causes, scope, and anticipated duration of any service issues.”

However, the FCCPC complained that many customers have been left without information, increasing frustration and leading to a feeling of neglect.

Customers facing difficulties due to these disruptions have the right to seek redress, as per FCCPA provisions, if services fall below acceptable standards. The Commission confirmed that it is monitoring the situation to ensure consumers’ rights are respected.

“The FCCPC is currently reviewing the situation to determine if consumers’ rights to redress are being upheld and if more action is needed to enforce accountability,” the agency affirmed.

The FCCPC revealed that it is collaborating with regulatory authorities, financial institutions, and other stakeholders to address these service issues and safeguard consumers’ interests. 

Banks have been urged to act promptly to restore stable services, prioritise customer support, and improve their communication to manage expectations responsibly and transparently. “The Commission assures affected bank customers that their concerns are being taken seriously,” the FCCPC reiterated, encouraging financial institutions to rectify service disruptions quickly.

Customers impacted by these issues can contact the FCCPC through its official channels to report complaints. The agency reiterated its focus on ensuring compliance with the FCCPA 2018, safeguarding the rights of Nigerian consumers, and holding banks accountable for service standards.

The investigation focuses on allegations of misleading product labelling and a lack of transparency regarding changes in ingredients.

According to the FCCPC’s statement, issues arose in June 2019 when the commission became aware that Coca-Cola was changing its Coke brand from a sugar-based formula to one containing non-nutritive sweeteners. 

This change, the FCCPC alleges, was not adequately communicated to consumers. “The Commission was convinced based on the evidence, that Coca-Cola and NBC on multiple occasions, and counts violated, and remained in violation of the FCCPA, particularly with respect to transparency, and clear disclosure obligations to their product patrons,” the statement reads.

Specifically, the FCCPC accuses Coca-Cola of misleading consumers about its “Original Taste, Less Sugar” variant, alleging that the company portrayed this product as identical to the classic Coca-Cola, despite a difference in formulation. Similar issues were raised regarding undisclosed changes in Fanta and Sprite.

The FCCPC claims it engaged with Coca-Cola and NBC in an attempt to reach a resolution, which included seeking internal documents and production logs to verify the allegations. 

While the commission initially accommodated attempts by the companies to implement clearer labelling and product differentiation, Coca-Cola and NBC ultimately abandoned these exertions, leading to a final order issued on July 29, 2024.

The final order outlines findings that include misleading trade descriptions and unfair marketing tactics. The Commission states that Coca-Cola’s packaging fails to adequately differentiate between “Original Taste” and “Less Sugar” versions, violating several sections of the Federal Competition and Consumer Protection Act. 

The FCCPC claims that the Nigerian Bottling Company engaged in deceptive trade practices by using identical packaging for both its Zero Sugar and 50:50 sugar/sweetener Limca drink, misleading consumers.

The FCCPC has reserved the right to impose penalties on both Coca-Cola and NBC for these violations and has not ruled out investigating possible abuse of market dominance by the companies. NBC was also found to have used identical packaging for different variants of Limca Lime-Lemon, further confusing consumers.

The FCCPC is considering additional regulatory actions, including assessing penalties for potential abuse of market authority. The Commission emphasises its focus on ensuring that companies provide clear and honest product information to consumers.

The company has laid out 22 reasons why the penalty, which followed a detailed investigation, should be overturned.

At the top of its argument, Meta says the FCCPC’s directives are not just vague but also technically unfeasible. The company argues that the requirements fail to consider the operational complexities of their services and are unsupported by Nigerian law. 

Specifically, Meta and WhatsApp highlight that the FCCPC’s order to “immediately reinstate the rights of Nigerian users” is unclear and imposes an unrealistic burden.

Meta disputes the FCCPC mandate to halt data sharing with other Facebook entities and third parties, arguing it is inconsistent with legal standards and industry practices. It challenges the necessity and feasibility of the proposed “remedy package,” claiming the 15-day compliance period is insufficient.

In addition, Meta asserts that the FCCPC lacked the authority to enforce certain conditions, such as requiring prior approval of privacy policies, also pointing to procedural fairness, stating that they were not given adequate opportunity to contest the findings or calculations that led to the fine.

The reasons as listed for appealing the FCCPC’s $220 million penalty are:

1. Vague Directives: The directive to “immediately reinstate the rights of Nigerian users” is considered excessively vague and creates uncertainty.
2. Technical Impracticality: The FCCPC’s requirements do not account for the operational complexities of WhatsApp, making compliance burdensome and technically impossible within the timeframe.
3. Ambiguous Privacy Policy Order: The order regarding the privacy policy is ambiguous, given that WhatsApp users can choose not to accept the Terms of Service.
4. Unjustifiable Data-Sharing Order: The order to halt sharing user data with other Facebook companies and third parties is deemed unjustifiable and against industry standards.
5. Lack of Legal Basis for Privacy Policy Approval: There is no legal requirement for privacy policies to be approved by the FCCPC or the Nigeria Data Protection Commission.
6. 2016 Data Sharing Practices: The directive to revert to 2016 data-sharing practices lacks a legal basis.
7. Unclear Data Transfer Blockage: Instructions to stop data transfer without explicit user consent are not clear.
8. No Need for Written Assurance: The requirement for a written assurance to not infringe on consumer rights is unnecessary.
9. Inadequate Remedy Package Timeframe: The 15-day period for implementing a proposed remedy package is inadequate.
10. Investigation Cost Reimbursement: The order to reimburse the FCCPC $35,000 for investigation costs has no legal basis.
11. Excessive Penalty: The penalty is hefty and was imposed without a fair hearing.
12. Impossibility of Data Consent Mechanisms: Building a consent mechanism for each data point is deemed impossible and costly.
13. Audit Without Personnel Presence: The FCCPC can conduct audits without Meta’s physical presence in Nigeria.
14. No Need for Prior Approval: There is no power for the FCCPC to compel prior approval of privacy policy updates.
15. Extended Implementation Time: Remedy packages require more time for implementation than provided.
16. No Coercion of Consumers: There is no coercion or tying of products that forecloses competition.
17. Meta Not Formally Investigated: Meta was not formally investigated by the FCCPC, which ordered Meta to produce information regarding WhatsApp.
18. No Evidence Against Meta: There is no evidence to warrant treating Meta as a target of the FCCPC’s orders.
19. Right to Fair Hearing: The appellants argue that their right to a fair hearing was violated.
20. Lack of Opportunity to Query Penalty Calculation: Meta and WhatsApp were not allowed to challenge the penalty calculation.
21. No Findings Against Meta: The Final Order lacks findings of fact or law against Meta.
22. Unsigned Final Order: The penalty was imposed without signatures from the Executive Chairman or Vice Chairman of the FCCPC, questioning its legitimacy.

Following Multichoice’s initial objection to the tribunal’s jurisdiction, which was overruled, the decision, issued last Friday, is part of the ongoing legal proceedings focused on consumer protection and fair competition in the Nigerian market.

According to a notice of appeal obtained from sources close to the case, Multichoice is contesting the tribunal’s jurisdiction and the imposed sanctions.

The tribunal, led by Justice Thomas Okosu, ordered Multichoice to provide Nigerian subscribers with one-month free access to DStv and GOtv. 

This directive also follows Multichoice’s non-compliance with interim orders that restrained the company from increasing subscription rates pending the outcome of a motion filed by Barrister Festus Onifade.

Onifade’s lawsuit against Multichoice Nigeria Ltd and the Federal Competition and Consumer Protection Commission (FCCPC) accused the Pay-TV giant of unjustly raising subscription fees without adequate notice to customers. 

The tribunal’s interim order, issued earlier, prevented Multichoice from implementing a scheduled price increase on May 1, 2024, until a full hearing could take place.

Multichoice’s lawyer, Moyosore J. Onibanjo (SAN), argued that the tribunal should dismiss the case based on precedent, asserting that similar disputes had been resolved previously in Multichoice’s favour. 

However, Onifade maintained that the core issue was the insufficient notice given to customers regarding the price hike, rather than the hike itself.

The tribunal ruled that it has jurisdiction over the matter under Section 39(2) of the FCCPC Act, which covers all commercial activities aimed at profit across the federation. 

The panel determined that Multichoice’s eight-day notice for the price increase was inadequate and dismissed the company’s preliminary objections. Consequently, the tribunal imposed the N150 million fine and mandated a free subscription period for Nigerian users.

In response to the ruling, Multichoice’s legal team communicated their intent to appeal, pointing to a breach of their right to a fair hearing. They argued that the tribunal delivered a verdict on the merits of the case without allowing Multichoice to fully present its defence.

According to sources, Multichoice has officially filed an appeal, seeking to overturn the tribunal’s decision. Meanwhile, the company has announced new price adjustments for DStv and GOtv packages, which took effect on May 1, 2024, due to rising operational costs. This adjustment has led to a 25% to 26% hike in subscription fees, despite the ongoing legal dispute.

The FCCPC has disclosed that it will review Multichoice’s reasons for the price hike and may involve other regulatory bodies, such as the National Broadcasting Commission (NBC).

In the midst of these developments, Multichoice Group has attributed the decline in active DStv subscribers in Nigeria to the country’s challenging economic conditions. 

Dr. Vincent Olatunji, the National Commissioner/CEO, NDPB, in his welcome remarks during the signing ceremony at NDPB Headquarters on Friday, 28^th August 2022, expressed his optimism about the objectives of the MoU and the enforcement mechanism for consumer rights and data protection.

He noted that the MoU will serve as a model in promoting an ecosystem of cooperation among regulatory authorities. The National Commissioner further commended FCCPC Executive Vice Chairman, Barr. Babatunde Irukera for his altruism and commitment towards consumer rights and competitive trade practices in Nigeria.

In his remarks, the FCCPC Executive Vice-Chairman expressed delight in the momentum that data protection has gained in the country since the establishment of the Bureau by President Muhammadu Buhari, GCFR. He highlighted that the institutional possibilities of the MoU in leveraging data governance for sustainable development are compelling. The Executive VC pledged the full support of FCCPC to NDPB through the implementation of the MoU. 

Both agencies established a Joint Technical and Enforcement Committee and agree among others “to use their best endeavors in the exercise of their respective powers to enforce and ensure compliance with any mutually agreed decisions, actions, orders, recommendations or understandings arising from any effort, initiative, or investigation that is subject of this  MoU or any mutual cooperation/collaborations by Parties.”

The MoU will, ultimately, foster:- prompt resolution of complaints, capacity building, awareness among consumers/data subjects and information sharing between the two agencies.

Dr. Olatunji also commended data controllers and data processors that have complied with the recently issued Compliance Notice within a very short time. He noted that this is a clear evidence that many data controllers and processors in Nigeria are becoming more and more transparent and accountable in their dealings with data subjects.

This is part of the national effort towards ensuring that no one is left behind in the implementation of National Digital Economy Policy and Strategy (NDEPS).  

With the signing of the MoU, the National Commissioner called on all organizations who collect personal data/records/information on citizens – irrespective of age or gender – to avoid grave legal and reputational consequences by complying with the provisions of the Nigeria Data Protection Regulation (NDPR) 2019.

Details of compliance processes are contained in the recent Newsletter VOL.1/ NDPB/CN/ 1/22 posted on the website of the Bureau.