House passes Federal Competition Commission Bill sponsored by Speaker Dogara



…Bill To Strengthen Business Environment 

….proposes 5 year jail term/ N50m/10% turnover for violators of Competition Law
….10 years jail term/N10m for violators of Consumer Rights/10% turnover for violators of Competition Law

As part of efforts to ease the Nigerian business environment for investors and grow the economy, the House of Representatives has passed a Bill that seeks to, among other things, establish the Competition and Consumer Protection Tribunal to promote healthy business competition and strengthen consumer rights.

The House adopted the recommendation of the report on the bill sponsored by the Speaker, Rt. Hon Yakubu Dogara, to repeal the Consumer Protection Act, establish the Federal Competition and Consumer Protection Commission and Consumer Protection Tribunal.

The bill when concurred by the Senate and assented to by the President, apart from developing business, will also promote fair, efficient and competitive markets in the Nigerian economy, facilitate access by all citizens to safe products, secure the protection of rights for all consumers in Nigeria.

With the adoption of report by the green chamber, the Bill has scaled through the final stage on the floor of the House of Representatives.

The proposed law proposes a 5 year jail term and N50 million for individuals who violate the competition law and a fine not exceeding ten percent turnover in the preceding business year of a defaulting company.

For those in breach of consumer rights, it provides for individuals, imprisonment for a term not exceeding five years, or to payment of fine not exceeding ten million naira or both; and in the case of a body corporate, liable on conviction, to a fine of not less that one hundred million naira or ten percent of its turnover in the preceding year, whichever is higher.

The tribunal, as proposed in the Bill, prohibits acts that deliberately seek to restrain competition by “directly or indirectly fixing a purchase or selling price of goods or services…; dividing markets by allocating customers, suppliers, territories or specific types of goods and services; limiting or controlling production or distribution of any goods or services, markets, technical development or investment; engaging in collusive tendering and making the conclusion of an agreement subject to acceptance by the other parties of supplementary obligations which, by their nature or according to their commercial usage, have no connection with the subject of such agreement.”

It also seeks to prohibit “minimum resale price maintenance”, stating that “any term or condition of an agreement for the sale of any goods or services is void to the extent thst it purports to establish or provide for the establishment of minimum prices to be charged on the resale of the goods or services in Nigeria.”

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When assented to by the president, the Bill will also protect all patented products, protect employees, ensure that consumers have access to products made to the highest standards and compensation for faulty purchases or transactions.

Where provisions of the Bill are breached, the perpetrators, if individual, shall be liable on conviction, “to imprisonment not exceeding a term of five years, or to a fine not exceeding fifty million naira or both finr and imprisonment. On the other hand, if the defaulter is a corporate body, “it shall be liable on conviction, to a fine not exceeding ten percent of its turnover in the preceding business year.

It also adds that “where the offence is committed by a bod corporate, each director of the body corporate shall be liable to be proceeded against and upon conviction, dealt with as stated in paragraph (a) of subsection (1) of this section ( imprisonment not exceeding a term of five years, or to a fine not exceeding fifty million naira or both finr and imprisonment).

For disobedience of an order served by the commission, the defaulter, as an individual, is liable to, upon conviction, imprisonment for a term not exceeding 3 years, to a fine not exceeding fifty million naira, or both. For corporate bodies, it would be, on conviction, liable to a fine not exceeding en percent of its turnover in the preceding business year.
Also, each director of the corporate body shall be liable to imprisonment not exceeding a term of five years, or to a fine not exceeding fifty million naira or both finr and imprisonment.

The proposed law also addresses and provides penalties, where relevant, for issues such as abuse of a dominant position, monopoly, mergers, manipulation of prices (specific offences against competition), conspiracy, bid rigging, obsruction of investigation.

On consumer rights, it proposes that any person who contravenes any consumer rights commits an offence and is “liable, upon conviction, to imprisonment for a term not exceeding five years, or to payment of fine not exceeding ten million naira or both.

“In the case of a body corporate, liable on conviction, to a fine of not less that one hundred million naira or ten percent of its turnover in the preceding year, whichever is higher.”

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