Re: The Nigerian Antitrust Bill

In this commentary, I respond to the concerns expressed by Mr. Ikeogu Oke in his articles in the Thisday of 31 May and June 1, 2016, about the Antitrust Bill presently, at the Senate. The Bill under discussion is SB. 137 (the Bill) which is sponsored by Senator Nneji Athan Achonu. It is also important to emphasise that the Bill is identical to HB. 60 presently at the House of Representatives (House), which was inter alia the subject of the public hearing recently held by the House on May 31, 2016 (I attended this public hearing and submitted a memorandum). The Bill is also a duplication of the past efforts of the Federal Government in enacting a competition and consumer protection framework, which had the input of various MDAs such as the Bureau of Public Enterprises (BPE), Attorney-General’s Office (AG), Federal Ministry of Trade and Industry (FMITI), and was presented as the Federal Competition and Consumer Protection Bill, 2013 (the Executive Bill) in the last (7th) Legislative Assembly for their consideration.

As an Antitrust lawyer, and more importantly an officer in the temple of justice, I owe a duty to Mr. Oke and the general public to expound the law, by putting the Bill in the proper perspective.

In his first submission, Mr. Oke states that there is “a Clause that says the Commission can shut down a business on suspicion that an anti-competitive act will be committed.” According to Mr. Oke, “This is comparable to punishing someone on suspicion that the person will commit a crime.” However, my review of the Bill did not reveal such a Clause. Mr. Oke ought to have specified the particular Clause of the Bill.

Secondly, Mr. Oke complains about Clauses 4 (5) and 13 (b) which are to the effect that the work of the Commission or any committee appointed by the Commission shall not be invalidated by a defect in the appointment of a member of the Commission or of the committee. In this regard, Mr. Oke submits that “Will the Commission or any of its Committees consider it right if, for instance, its decisions to sanction businesses are routinely taken by its members who have interests in rival businesses and so should not have been appointed to serve on the Commission or Committees on moral grounds due to such conflict of interest?” While I agree with Mr. Oke that this concern is legitimate, it is important to note that similar provisions are provided for in various Nigerian statutes such as the Librarians (Registrations, etc) Council of Nigeria Act (Section 6), Teaching Regulatory Council of Nigeria Act (Section 7) and Chartered Insurance Institute of Nigeria Act (Section 8). So far, none of these provisions (or the work of the body established thereunder) has been invalidated as null and void ab initio by a Nigerian court.

Thirdly, Mr. Oke argues that the reference to “whenever the need arises” in Clause 17 (q) which provides that “cause all imported goods to be registered for traceability whenever the need arises” does not impose a mandatory obligation to register imported goods. This is an apt observation, one that was also raised during the public hearing. In construing this provision, Hon. Uzoma Nkem-Abonta (who is the sponsor of HB.60) stated that it is mandatory for all imported goods to be registered with the relevant authority for traceability. It is my expectation that the House Committee on Commerce currently working on HB. 60 will amend Clause 17 (q) to reflect Hon. Nkem-Abonta’s clarification, or alternatively should the issue of construing this Clause come before a court, it is likely that the court in determining legislative intent by tracing legislative history of the Bill will avail itself of Hon. Nkem-Abonta’s statement.

Fourtly, Mr. Oke argues that the powers of the Commission under Clause 8 is a duplication of the statutory functions of existing agencies such as SON, NAFDAC and COREN, and should be expunged, as failure to do will “set the stage for jurisdictional conflict with such organisations besides resulting in wasteful duplication of responsibilities”. This is also an apt observation, however Mr. Oke should also bear in mind that the CPC under the extant law also has these functions, and that the Bill seeks to repeal the Act establishing the CPC. Consequently, if finally enacted, the functions of CPC under the repealed Act will now be ascribed to the Commission, hence the inclusion of Clause 18.   

Fifthly, Mr. Oke argues that Clause 27 (3) which provides that “The Commission shall, if there are grounds to believe that a violation, civil or criminal, of the provisions of this Act or regulations made pursuant to this Act, was is being or will be committed, take any interim measures, including authorising an authorised officer to exercise powers contained in subsection (1) of this section pending the issuance of a warrant to that effect”, “will amount to prompting prejudice, illogicality and arbitrariness to make a law that imposes sanctions for offences that will be committed”. In disagreeing with Mr. Oke, let us consider the hypothetical scenario, where a price-fixing cartel under covert investigation by the Commission has been holding a series of meeting for the purpose of fixing the price of their product (This is an Antitrust offence under Clause 108 of the Bill). In the last meeting where the price is supposed be fixed, the Commission storms the venue through its authorised officer(s), and removes minutes of their previous meetings and/or the attendance register as evidence. In this particular case, it cannot be said that the Commission did not have any valid suspicion or “probable cause” for entering and/or searching the premises. In the light of this, I am certain that Mr. Oke will now see the importance of Clause 27 (3).   

Sixthly, Mr. Oke argues that Clause 39 (1) “will create a scenario in which the Commission becomes a judge in its own case – a body that invests itself with the power to determine when a crime has been committed, investigate the crime, arraign the accused before its tribunal, rule on the case and determine the guilt and punishment for the convict or otherwise by the tribunal which is virtually an extension of its operations”. In this regard, I do not agree with Mr. Oke, as the Commission is established under Clause 3 (1) of the Bill, while the Tribunal is established under Clause 39 (1) of the Bill. Thus, the Tribunal is a separate institution from the Commission. In addition, the Tribunal is authorised under Clause 48 (1) (a) to review any decision taken by the Commission, and thus cannot be an appendage of the Commission. Even if for the sake of argument this were so, Clause 56 of the Bill ensures that the Federal High Court can subject any ruling, award, or judgement issued by the Tribunal to a judicial review. In addition, various statutes in Nigeria establish both an enforcement and an adjudicatory agency, for instance SEC and the IST, CCB and CCT and FIRS and TAT.

Seventhly, Mr. Oke argues that Clause 72 should rather provide for “geographical boundaries that encompass the entire country and possibly extends to other ECOWAS countries with potentials for trading with ours in accordance with the relevant treaties”. In responding to this question, it is important to emphasise that the concept of delineating a relevant market as provided by this Clause is a substantive Antitrust issue, which comprises both the relevant geographical market (geographical boundary) and the relevant product market. According to Black’s Law Dictionary (9th Edition), the relevant geographical market is “the part of a relevant market that identifies the regions in which a firm might compete”, thus when assessing whether a conduct is in breach of Antitrust law, it is important to ascertain “the area of effective competition in which the particular product or its reasonably interchangeable substitutes are traded” (See, Hornsby Oil Co., Inc. v. Champion Spark Plug Co., 714 F. 2d 1384 Court of Appeals, 5th Circuit 1983). Thus, the relevant geographic market may be local, regional, national or international in scope. Consequently, Mr. Oke’s argument in this regard is unnecessary. Moreover, for treaties as mentioned by Mr. Oke to apply in Nigeria, the National Assembly in accordance with Section 12 (1) of the Constitution must enact it into law.

Eighthly, as contended by Mr. Oke, “Factual barriers is a vague construct open to all manner of interpretations.” I do not share the view of Mr. Oke, as “factual barriers” (another substantive issue in Antitrust) within the context of a dominance assessment, simply means “factual” circumstances that impede or delay entry into a relevant market such as upfront capital investment required to start a business or enter a particular Antitrust market.

Ninthly, as contended by Mr. Oke, the “ability” referred to in Clause 73.2 (g) of the Bill “can only be determined subjectively, and so it creates an arbitrary factor that makes it undesirable to retain in the [B]ill”. This is also another substantive issue in Antitrust, and simply refers to the ability of the [dominant] firm under review, to shift from producing one good to another in response to a price increase. This conclusion is not based on a subjective determination, but rather on an objective determination resulting from factual enquiries.

Tenthly, Mr. Oke argues that the provision of Clause 73 (3), which provides that “An undertaking shall not be treated as abusing a dominant position if its conduct (a) contributes to the improvement of production or distribution of goods or services or the promotion of technological or economic progress, while allowing consumers a fair share of the resulting benefit”, “creates a vague and exploitable basis for granting exemptions, since any undertaking can claim and seek to prove that its conduct conforms to its stipulations”. I do not agree with Mr. Oke, as this Clause contemplates “efficiency” (another substantive Antitrust issue) generated by an otherwise anti-competitive act. For instance, in the context of a merger, an efficiency allows the combined firms to better utilise existing assets more efficiently, thereby lowering their cost of production than either firms could have achieved individually. The efficiencies that benefit consumers may be in the form of lower prices or, cost savings in production or distribution, which gives the post-merger firm the ability and incentive to charge lower prices following the merger. Under Antitrust law, this efficiency must be “verifiable”, that is a firm relying on an efficiency claim must be able to demonstrate its existence by providing the necessary information, thus I do not see how a dominant firm abusing its dominant position, can exploit this Clause by seeking for an exemption, absent any verification.   

Eleventhly, Mr. Oke argues that any person seeking for a monopoly investigation must depose to an affidavit confirming the trueness of the request, so as “[t]o guard against the possibility of businesses making such requests frivolously or maliciously against their rivals”. While this is an apt observation, it is important to note that this Clause is not limited to only businesses as consumers who are also stakeholder in the economy may also wish to make a request under this Clause. Moreover, in Nigeria now, there is no investigation that is triggered by a sworn affidavit, not even a criminal investigation, hence the suggestion by Mr. Oke is unnecessary. Even the recently “killed” Frivolous Petition Bill (otherwise known as the social media Bill) contained a similar Clause, unfortunately the opprobrium against this Bill forced the Senate to drop it.   

Twelvethly, while I agree with Mr. Oke’s argument that market forces should determine prices of commodities, however in the case of essential commodities, my suggestion is that Clause 89 should also take cognisance of Item 62 (e) of the Exclusive Legislative List, which empowers the National Assembly to legislate on the control of the prices and goods designated as essential.   

Lastly, I do not agree with Mr. Oke’s submission that Clause 105 of the Bill which states “Notwithstanding the provisions of any other law but subject to Supremacy of the Constitution of the Federal Republic of Nigeria, in all matters relating to competition and consumer protection, the provisions of this Act shall override the provisions of any other law [and] grants the FCCP Act supremacy over all other legislation (except the Constitution)”, poses the threat of legal and jurisdictional friction with other agencies. This is because it is a common law principle of statutory interpretation that when two statutes, though both are expressed in affirmative language, are contrary in manner, the latter abrogates the former (See, F.R.N v. Osahon & Ors. (2006) 5 N.W.L.R (Pt. 973) 361). This is expressed by the latin maxim leges posteiuores prioues contrarias abrogant. Thus, in such circumstance where two statutes conflict, the later one will be held to prevail over the earlier one.

In all, judging from the stakeholders’ expression at the public hearing especially submissions by the Honourable Minister of Industry, Trade and Investment, Dr. Okechukwu Enelamah, the DG of the CPC, Mrs. Dupe Atoki and the Nigerian Employer’s Consultative Association (NECA), there is massive support for this Bill that cuts across the various stakeholders. In conclusion, I hope I have been able to put Mr. Oke’s concern about the Bill to rest, as the Bill is so far the best Antitrust framework to have originated from Nigeria. It is my expectation that once the Bill is enacted into law, the Nigerian economy will be better for it.

Chukwuyere Ebere Izuogu

Chukwuyere is the author of the forthcoming book “Regulating Anti-competitive Practices in Nigeria’s Communications Sector (2016).”