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.

Subscribe ToNairalaw News!