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    Thursday, June 20, 2019

    Consumer Protection Agency Issues Final Order to Multichoice on Tariffs Review

    The Federal Competition and Consumer Protection Commission (FCCPC) has issued a final order to MultiChoice Nigeria Limited for showing alleged bad faith in enforcing a mutual agreement on tariffs review and other services.
    In July 2018, MultiChoice Nigeria announced the upward review of the monthly subscription rates for its cable television systems, DSTV and GoTV, with effect from August 1, 2018.

    The company said under the new price regime, the Premium package subscribers would pay 7.5 per cent more (N15,800) from N14,700 every month.
    The Compact Plus customers were to pay N10,650, from N9,900; Compact bouquets N6,800, from N6,300, and Family package would increase from N3,800 to N4,000, with Access from N1,900 to N2,000.
    But the Consumer Protection agency had kicked against the review and ordered DSTV to immediately reverse the decision.
    Despite the order, however, DSTV went ahead with the review.

    CPC went to the Federal High Court, Abuja, to seek an order restraining Multichoice Nigeria or any of its agents or representatives from going ahead with the increment till further notice.
    The application was filed on behalf of the Nigerian government in case No. FHC/ABJ/CS/894. On August 20, Justice Nnamdi Dimgba granted the application for an interim order prohibiting any increase by Multichoice Nigeria in its DStv or GOtv subscription rates.
    In his order, Mr Dimgba restrained Multichoice Nigeria or its agents and representatives from “continuing the implementation of any increase in subscription rates or price review policy imposing increased charges and costs on the consumers pending the determination of the motion on notice.”

    The court also restrained DSTV from “further carrying on or continuing any conduct or activity which interferes with or has effect of circumventing the outcome of ongoing investigations by the CPC into the company’s compliance or non-compliance with the February 16, 2016 order pending the determination of the motion on notice”.

    Justice Dimgba equally rejected an August 24, 2018, appeal by Multichoice Nigeria against the application.
    When the appeal was made, the CPC explained that the order stopping implementation of the new tariffs will subsist till the appeal has been heard and ruling given by the court.

    The implication was that the subscription tariffs for Dstv and Gotv ought not to have been increased.
    However, in defiance of the court order, DSTV has since August last year been implementing the increased tariffs.

    The FCCPC accused MultiChoice Nigeria of acting in bad faith by preempting the agency after a broad investigation, and a proposed mutually agreed Consent Order.
    The Commission said the order addressed broad consumer protection and service responsiveness/quality issues which were the subject of incessant complaints from consumers.

    The CPC said a key mutual understanding in the Consent Order was that no material terms of the Subscription Agreement between MultiChoice and its subscribers will change during an agreed period.
    The order was to allow the crucial issues in repeated complaints, and covered by the Consent Order to be addressed under the existing terms to the expectations by consumers.
    “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.

    To compel MultiChoice to reverse its decision, the CPC filed an action on MultiChoice to return to honouring the mutual understandings with the FCCPC, and subject itself to its authority and jurisdiction.
    But again, MultiChoice Nigeria failed to obey the court order, which later became the subject of an appeal to the Court of Appeal.
    On January 25, the Commission said it entered a Final Order against MultiChoice, which it said were no longer a matter of consent or mutual agreement
    “They are directives, the compliance to which the Commission believes it is capable of legally enforcing,” the Commission said.

    Specifically, the Commission ordered as follows:
    (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 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.

    The Commission accused MultiChoice of attempts to mischaracterise its court case by seeking to exercise powers not in the then Consumer Protection Council Act (now repealed).
    Also, Multichoice accused the Commission of attempting to engage in price control, which is inconsistent with Nigeria’s trade policy and free-market philosophy.

    With the signing of the Federal Competition & Consumer Protection Act 2018 into law on January 30, it establishes both the statutory and regulatory framework for more robust regulation of anti-competitive conduct and greater scrutiny of conduct in the market place.
    The Commission said a combination of the new mandate/powers under the new law, and its Final Order, renders the issue the Commission sought to enforce in part moot, and MultiChoice arguments defeated.

    As a result, the Federal High Court on May 16 struck out the case before it on the subject matter.
    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.
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