By Derin Otuyelu
Late on Thursday last week, reports emerged that the Federal Competition and Consumer Protection Commission (FCCPC) had taken MultiChoice and its Chief Executive Officer, John Ugbe, to court.
They are accused of allegedly violating regulatory directives and obstructing an ongoing inquiry.
It also assured Nigerians that it is committed to protecting them against exploitative business practices and ensuring that dominant players in any sector adhere to fair market principles and legal compliance.
I am very interested in this issue, as I would like to understand the FCCPC’s definition of fair market principles. Given the extensive powers it claims to have, including the authority to enforce legal compliance, it is surprising that these powers are rarely used to regulate the prices of essential items, which are frequently hoarded. To my knowledge, the only instances in which the FCCPC has addressed pricing issues were related to two cases: first, the fares charged by Air Peace, which they did not take any action on, and second, the sealing of a few supermarkets for deceptive pricing practices. This involved charging prices that differed from those displayed on the shelves.
Every other time, it has been when MultiChoice increased tariffs.
In 2023, StarTimes, a rival to DStv and GOtv, increased prices three times, citing difficult economic conditions. The FCCPC did not consider its price adjustments worthy of attention.
A little earlier the same day, Esosa Iyawe, a House of Representatives member, had called on the House to investigate “frequent price reviews” by MultiChoice, which operates DStv and GOtv. In a motion raised under Matters of Urgent Public Importance. Iyawe called on Multichoice to suspend its planned price increase, citing the current economic hardship facing Nigerians as his reason for the motion.
One cannot be certain about how much of information was available to Iyawe at the time he moved the motion. If he had any, it was not up to date.
As a DStv subscriber and was informed by a text message on 24 February that the tariff on my bouquet would rise, effective 1 March, 2025. I was alarmed actually, as that was the second review within a year. The review has already taken effect, so it is not in the works as the legislator said.
Iyawe is two years old in the House and must have been aware of the intervention of the House in the same matter last year and even before, if he was paying attention. It is always one ad hoc committee or the other with interest in knowing why the tariffs are rising and why there is no “pay-per-view” billing model. It is always when MultiChoice adjusts rates that probes or public hearing into prices charged by a private business are held.
The best those probes have delivered are resolutions that MultiChoice should revert to previous prices. I used to get excited about them until I realized that the resolutions carry no force. At a stage, I also wondered if legislators knew the cost of input enough to determine if a product or service is too expensive. I concluded that they did not and still do not, which is why they always talk about pay per view, of which they seem to know nothing about and which is used only for one-off, big-ticket broadcasts. So, what will happen this time when the probe happens as Iyawe desires?
Predictably, MultiChoice execs would be invited to give the same explanation they have given every time and which every business gives- prevailing economic realities; ordered to revert to old rates and get told like in a drill sergeant’s tone that Nigerians cannot be taken for granted by people who take Nigerians for granted and actually parasitize them. After, we will wait to wash, rinse and repeat, which was the attitude of responders on X to the news on Thursday.
Since 2023 when Tinubu government’s economic reforms started to be served, prices of goods and services have maintained a steep ascent, leaving Nigerians on the brink as prices of household items have jumped by over 100 percent in one year in many cases. None of those who raised prices in other sectors has been of any interest to the FCCPC, which is alleging abuse of dominant position. Bottling companies, cab hailing firms, airlines, drug manufacturers/retailers, to list just a few, have been raising prices to FCCPC’s studious indifference. The same attitude is extended to hoarders of essential items, who create artificial scarcity to make a mint and a half from their unethical business practice.
I look forward to the case filed by the FCCPC. It would be interesting to see how the market is defined and how abuse of dominance may be defined or assessed, as there is yet to be any case law in this regard. I also wish to see whether the charges of market dominance and abuse are sustainable, considering innovation in viewing broadcasting content, the number of consumer choices, including those provided by non-broadcasters playing in the broadcasting market and/or owning broadcasting content.
The alleged abuse of dominance (monopoly, some say) is long running industry narrative. It conveniently ignores the presence of other players, like StarTimes, which once wrested rights to the Italian Serie A from MultiChoice and still holds rights to the German Bundesliga as well as French Ligue Un, both of which used to be in the MultiChoice basket.
It similarly ignores the defunct HItv, which proved a rival with a lot of spunk for three or four years until a conspiracy between its idiosyncratic management and the country’s notoriously suffocating business environment, which gets worse year on year. In 2023, more than 10 major businesses exited Nigeria, citing profitability concerns and challenging business conditions. They included Unilever Nigeria Plc, Procter & Gamble Nigeria, GlaxoSmithKline Consumer Nigeria Limited, ShopRite Nigeria, Sanofi-Aventis Nigeria Limited, Equinox Nigeria Bolt Food and Jumia Food Nigeria.
In the first six months of last year, five businesses of real consequence pulled out of the country for the same reasons. These were Microsoft Nigeria, Total Energies Nigeria (impacted by divestment strategies), PZ Cussons Nigeria Plc, Kimberly-Clark Nigeria
and Diageo Plc.
MultiChoice and FCCPC have a long-running relationship, which attracts public attention only when prices are adjusted by the service provider. While many believe that the FCCPC is doing the right thing because it has unwittingly sold to the public the idea that a luxury service should be cheap, many others see what is does as regulatory bullying. I will wait for the courts to determine the matter. I am very interested.