Final Order And Judicial Resolution of Investigation of Multichoice; In Federal Government of Nigeria V. Multichoice Nigeria Limited Suit No. FHC/ABJ/CS/894/18
Wednesday, June 12, 2019:
On June 17, 2018, the Consumer Protection Council, (Now Federal Competition & Consumer Protection Commission; FCCPC) filed an action against MultiChoice Nigeria Limited (operators of DStv payTV) before the Federal High Court in Abuja.
Essentially, the case was necessitated because MultiChoice acted in bad faith in preempting the FCCPC after a broad investigation, and a proposed mutually agreed Consent Order. The Order addressed broad consumer protection and service responsiveness/quality issues that were lacking and had become the subject of incessant complaints. A key mutual understanding in the jointly agreed Consent Order was that no material terms of the Subscription Agreement between MultiChoice and its subscribers will change during an agreed period of supervision by FCCPC, to ensure that the crucial issues in repeated complaints, and that were covered by the Consent Order were sufficiently addressed under the existing terms and rubric of expectations by consumers.
However, instead of abiding by that understanding and executing the Consent Order at the proposed time agreed, MultiChoice rather increased subscription rates (a material term of the Subscription Agreement) in preemption to executing the Consent Order. The FCCPC considering this a demonstration of bad faith engaged MultiChoice unsuccessfully, and as such, ultimately filed an action to enjoin MultiChoice to return to honouring the mutual understandings with the FCCPC, and subject itself to the authority and jurisdiction of the FCCPC.
The Court granted interim injunctive relief prohibiting MultiChoice from proceeding with the conduct that the Commission alleged constituted bad faith. MultiChoice failed to obey the injunctive order of the court, preferring instead to challenge the validity and proprietary of the order and powers of the court. The court order became the subject of appeal to the Court of Appeal.
Considering that consumers were not receiving the benefits of the proposed modification of MultiChoice’s approach to consumer protection while the case remained pending, the Commission after broad legal consultation and interpretation of the law decided to proceed with entering an order against MultiChoice anyway. Although, the possibility of resistance and argument by MultiChoice that the entire subject matter was subjudice, and the Commission unable to proceed or enforce any such order existed, the Commission sufficiently believed there was adequate legal authority to still modify MultiChoice’s conduct while the case remained pending in court.
On January 25, 2019, the Commission entered a Final Order against MultiChoice. The directives in the Final Order were no longer a matter of consent or mutual agreement with MultiChoice. They are directives, the compliance to which the Commission believes it is capable of legally enforcing.
Specifically, the Commission ordered that:
(1) MultiChoice shall, subject to prevailing regulatory and telecommunications industry practices and constraints, commence toll free technical and customer service helplines, including inter-network;
(2) MultiChoice shall operate fully resourced call centers 24 hours, and 7 days a week, including public holidays;
(3) MultiChoice shall develop and publish a clear complaints resolution process describing the process for receiving, addressing and resolving complaints. This shall include an appeal and escalation process as well as timelines;
(4) MultiChoice shall clarify and expressly state in its compensation policy that subscribers will be compensated for inconveniences experienced in addition to the compensation for disruption of services resulting from failed, faulty, poor, or unprofessional installation by its agents;
(5) MultiChoice shall create multiple and additional social media platforms where subscribers can easily upload proof of payment when service is not restored immediately after payment;
(6) MultiChoice shall provide subscribers the option of periodically suspending subscription no less than three (3) times annually for up to fourteen (14) days in each instance;
(7) MultiChoice shall ensure that all subscribers have free and automatic access to the prevailing selected local free-to-air channels;
(8) MultiChoice shall carry out periodic customer sensitisation about changes made pursuant to the Commission’s Orders during the monitoring period and in a manner that adequately satisfies a reasonable and measurable degree of subscriber awareness;
(9) MultiChoice shall be under the Commission’s monitoring for a period of twelve (12) months of this Order;
(10) MultiChoice shall provide prior notice of proposed changes or modifications of material terms and conditions of service that are subject of this Order;
(11) MultiChoice understands the need to introduce more flexible and value adding pricing options such as price locks or similar equivalent benefits subscribers in other jurisdictions enjoy.
In addition, MultiChoice’s legal strategy was to mischaracterize the Commission’s case as seeking to exercising powers that were not in the then Consumer Protection Council Act (now repealed), and attempting to engage in price control, which is inconsistent with Nigeria’s trade policy and free market philosophy. MultiChoice sought to argue that, in the absence of a clearer legislative and regulatory framework for competition and product/services pricing, the Commission (as it then was constituted), and the courts lacked the power and jurisdiction to in anyway interfere with its conduct within any context whatsoever.
However, on January 30, 2019, President Muhammadu Buhari signed the Federal Competition & Consumer Protection Act 2018 into law. This law now indeed establishes both the statutory and regulatory framework for a more robust regulation of anti-competitive conduct and greater scrutiny of conduct in the market place that could distort the market, or impede competition. Although, this law is not retroactive, it does render MultiChoice’s argument before the court mute and untenable.
The combination of the Commission’s new mandate/powers under the new law, and its Final Order, renders the issue the Commission sought to enforce in part mute, and MultiChoice arguments defeated. As a result, the Federal High Court on May 16, 2019 struck out the case pending before it on the subject matter.
However, MultiChoice is under obligation to comply with the Commission’s Final Order of January 25, 2019 and the directives therein, which summary of the Final order can be located at www.cpc.gov.ng. The Commission is monitoring compliance, and welcomes consumer feedback in this respect.
The Final Order, or the case that has been struck out are without prejudice to the jurisdiction of the Commission to inquire into the operations and behaviour of MultiChoice under the FCCPA for conduct arising after January 30, 2019, and the Commission again welcomes information that may assist in holding MultiChoice, or any other company for that matter, accountable to consumers and competitors, as well as under prevailing law.
Chief Executive, FCCPC