Dominance 2020

March 6, 2020


Legal framework 

1 What is the legal framework in your jurisdiction covering the  behaviour of dominant firms?  

The Federal Competition and Consumer Protection Act 2018 (FCCPA),  which, in section 72(1), prohibits the abuse of a dominant position by  one or more undertakings.  

Definition of dominance 

2 How is dominance defined in the legislation and case law?  What elements are taken into account when assessing  dominance?  

The FCCPA defines dominance in section 70(2) as a market situation  where an undertaking enjoys a position of economic strength enabling  it to prevent effective competition being maintained on the relevant  market and having the power to behave to an appreciable extent independently of its competitors, customers and ultimately consumers. To  date, no case law exists on how dominance may be defined or assessed.  In assessing dominance, pursuant to section 72(3) of the FCCPA,  the following are required to be taken into account:  

  • the market share of the undertaking or undertakings concerned in  the relevant market; 
  • its or their financial power; 
  • its or their access to suppliers or markets; 
  • its or their links with other undertakings; 
  • legal or factual barriers to market entry by other undertakings; • actual or potential competition by undertakings established within  or outside the scope of the FCCPA; 
  • its or their ability to shift supply or demand to other goods or  services; and 
  • the ability of the opposite market side to resort to other  undertakings. 

Purpose of the legislation 

3 Is the purpose of the legislation and the underlying  dominance standard strictly economic, or does it protect  other interests? 

The statutory objectives stated in the FCCPA indicate that the purpose  of the legislation is purely economic and that the criteria used for  assessing market dominance are based on economic considerations. 

Sector-specific dominance rules 

4 Are there sector-specific dominance rules, distinct from the  generally applicable dominance provisions?  

Yes, dominance rules also exist for the communications sector in  Nigeria. The Competition Practice Regulations 2007 (CPR) enacted by  the communications sector regulator, the Nigerian Communications  Commission (NCC), established a comprehensive regime for assessing  whether a communications licensee is dominant in a relevant communications market.  

This regime and how it is applied differ in some respects from the  application of the dominance provisions under the FCCPA. For instance,  unlike section 72(3) of the FCCPA, which appears to require that all the  market conditions listed be taken into account when assessing dominance under the FCCPA, the CPR in Regulation 18(1) instead requires  the NCC to consider at least one of the following market conditions  when assessing dominance in a relevant communications market: • the market share of the licensee, determined by reference to revenues, numbers of subscribers or volumes of sales; 

  • the overall size of the licensee in comparison to competing licensees particularly any resulting economies of scale or scope that  permit the larger licensee to produce products or services at  lower costs;  
  • control of network facilities or other infrastructure, access to which  is required by competing licensees and that cannot, for commercial  or technical reasons, be duplicated by competing licensees; 
  • the absence of buying power or negotiating position by customers  or consumers, including substantial barriers to switching service  providers; 
  • ease of market entry, and the extent to which actual or potential  market entry protects against the exercise of market power such  as raising prices; and 
  • the rate of technological or other change in the market, and related  effects for market entry or the continuation of a dominant position. 

In addition, pursuant to Regulation 10(1) of the Telecommunications  Networks Interconnection Regulations 2007 enacted by NCC, a  communications licensee determined to be dominant in one or more  communications market relating to interconnection shall automatically  be subject to the following ex ante regulatory obligations: 

  • to meet all reasonable requests for access to its telecommunica tions network, in particular access at any technically feasible point  on its telecommunications network; 
  • to adhere to the principle of non-discrimination with regard to  interconnection offered to other licensed telecommunications  operators. In particular, it shall apply similar conditions in similar  circumstances to interconnected licensed telecommunications  operators providing similar services and provide interconnection  facilities and information to other licensed telecommunicationsoperators under the same conditions and of the same quality as it  provides for its own services or those of the group of companies  or partners;
  • to make available on request to other licensed telecommunications  operators considering interconnection with its telecommunications  network, all information and specifications reasonably necessary  in order to facilitate conclusion of an agreement for interconnection including information on changes planned for implementation  within the next six months, unless agreed otherwise by NCC;
  • to submit to NCC for approval and publish a Reference  Interconnection Offer, sufficiently unbundled, giving description  of the interconnection offerings broken down into components  according to market needs and the associated terms and conditions including tariffs; and
  • to provide access to the technical standards and specifications of  its telecommunications network with which another operator shall  be interconnected.However, although the FCCPA, pursuant to section 105(2), establishes a  concurrent jurisdiction between the Federal Competition and Consumer  Protection Commission (FCCPC) and NCC (and indeed other sector specific regulators) in matters of competition and consumer protection,  the FCCPC will have precedence over sector-specific regulators and,  according to section 47(2) of the FCCPA, all appeals or request for  review of the exercise of the competition or consumer protection power  of any sector-specific regulator shall in the first instance be heard  and determined by the FCCPC before such appeals can proceed to the  Federal Competition and Consumer Protection Tribunal (FCCPT), established under the FCCPA.  

    Exemptions from the dominance rules 

    5 To whom do the dominance rules apply? Are any entities  exempt?  

    The dominance rules, and generally the FCCPA, applies to all undertakings and all commercial activities within or having effect within Nigeria.  In addition, the dominance rules will also apply to a body corporate or agency of the Government of the Federation or a body corporate  or agency of a subdivision of the Federation, if the body corporate or  agency engages in commercial activities; and a body corporate in which  a Government of the Federation or government of a state or body corpo rate or agency of the Government of the Federation or any state or  local government has a controlling interest where such body corporate  engages in economic activities.  

    Transition from non-dominant to dominant 

    6 Does the legislation only provide for the behaviour of firms  that are already dominant?  

    Yes, the legislation applies to only dominant undertakings, it is not applicable in circumstances where a non-dominant undertaking transitions  to a dominant undertaking. 

    Collective dominance 

    7 Is collective dominance covered by the legislation? How is it  defined in the legislation and case law? 

    Although not expressly stated (or defined), the reference to ‘one or more  undertakings’ in section 72(1) of the FCCPA suggests that a situation  of collective dominance is contemplated and may be challenged if it  is used to perpetuate an abusive conduct. In addition, an agreement  among undertakings that constitutes a concerted practice within the  meaning of the FCCPA, and has the purpose of actual or likely effect of preventing, restricting or distorting competition is unlawful and void  and of no legal effect under the FCCPA. 

    Dominant purchasers 

    8 Does the legislation apply to dominant purchasers? Are there  any differences compared with the application of the law to  dominant suppliers? 

    The FCCPA makes no distinction between a dominant purchaser and a  dominant seller, thus the dominance provisions would equally apply to  a monopsonist as they would to a monopolist. 

    Market definition and share-based dominance thresholds 9 How are relevant product and geographic markets defined?  Are there market-share thresholds at which a company will  be presumed to be dominant or not dominant?  

    For the purpose of assessing dominance, the relevant market is defined  on the basis of the following criteria:  

    • geographical boundaries that identify groups of sellers and buyers  of goods and services within which competition is likely to be  restrained; 
    • goods or services that are regarded as interchangeable or substitutable by the consumer by reason of their characteristics, prices  and intended use; and 
    • suppliers to which consumers may turn to in the short term, if the  abuse of dominance leads to a significant increase in price or to  other detrimental effect upon the consumer. 

    Regarding market share-based threshold, neither the FCCPA nor the  FCCPC have at this time set out a specific market share threshold that  is presumptive of market power. 


    Definition of abuse of dominance 

    10 How is abuse of dominance defined and identified? What  conduct is subject to a per se prohibition? 

    The mere exercise of market power is not prohibited in the FCCPA;  rather it is the exercise of such market power in an abusive manner that  is prohibited. In this regard, section 72(2) of the FCCPA describes situa tions in which one or more undertakings with market power are deemed to have abused their market power. These situations include:

  • charging excessive price to the detriment of consumers; and
  • refusal to give a competitor access to an essential facility when it is  economically feasible to do so. 

    Other abusive conducts are identified on the basis of whether they are  exclusionary and having an anticompetitive effect devoid of any technological efficiency or pro-competitive gain. However, pursuant to section  72(3) of the FCCPA, an undertaking shall be deemed as not abusing its  market position if its conduct:  

    • contributes to the improvement of production or distribu tion of goods or services or the promotion of technological or  economic progress, while allowing consumers a fair share of the  resulting benefit; 
    • is indispensable to the attainment of the objects of paragraph (a); or • does not afford the undertaking the possibility of eliminating  competition in respect of a substantial part of the goods or services  concerned. 

Lastly, the FCCPA prohibits certain types of restrictive agreement  because of their per se illegality irrespective of whether or not a party  to this agreement exercises market power. The prohibited agreements  are those that provide for the following: 

  • directly or indirectly fixing a purchase or selling price;
  • dividing markets by allocating customers, suppliers, territories or  specific types of goods or 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  other parties of complementary obligations, which by their nature  or according to commercial usage have no connection with the  subject of the agreement. 

Exploitative and exclusionary practices 

11 Does the concept of abuse cover both exploitative and  exclusionary practices? 

Yes. Under the FCCPA, an abusive conduct could constitute either an  exploitative practice that is detrimental to consumer welfare or an  exclusionary practice that anticompetitively forecloses a competitor. 

Link between dominance and abuse 

12 What link must be shown between dominance and abuse?  May conduct by a dominant company also be abusive if it  occurs on an adjacent market to the dominated market? 

Owing to the absence of competition case law, it is not clear whether it  is necessary to show a causal connection between dominance and an  abusive practice, although it does appear that conducts listed in section  72(2) of the FCCPA will constitute an abuse if committed by a dominant undertaking. 

It is also not clear whether a conduct by a dominant undertaking  will constitute an abuse of a dominant position if it occurs in a market  other than the market in which the undertaking is dominant. However,  in 2013, the NCC, in imposing the ex-ante regulatory obligations of price 

cap for wholesale services and price floor for retail services on two  communications licensees determined to be collectively dominant in  these communications markets, was concerned that the market power  exercised by these licensees in the market for wholesale service could  be leveraged to distort competition in the market for retail communications services. 


13 What defences may be raised to allegations of abuse of  dominance? When exclusionary intent is shown, are defences  an option? 

An undertaking challenged for exercising its market power in an  abusive manner may argue pursuant to section 72(3) of the FCCPA that  the challenged conduct falls into one of the exceptions to an otherwise  abusive conduct. In addition, pursuant to section 73(2), that the challenged conduct constitutes an exclusive dealing arrangement or market  restriction between or among affiliated or interconnected undertakings  is an arguable defence. 

Specific forms of abuse 

As a preliminary remark, it is pertinent to note that the FCCPA was  enacted recently and there are yet to be competition case laws or FCCPC  advisories that give guidance on how the following underlisted abusive  practices by a dominant undertaking may be analysed for the purpose  of challenging them. In addition, as these conducts all constitute original issue of law, it is conceivable for Nigeria courts, FCCPT or the FCCPC to  look to bodies of jurisprudence from well-established competition jurisdictions as persuasive authorities in analysing them. In the light of this,  our responses to questions 14–24 would be whether these conducts are  expressly (or otherwise) prohibited under the FCCPA. 

Specific forms of abuse 

14 Rebate schemes 

Although the FCCPA lists several examples of abusive practices that are  prohibited, this list is not exhaustive and rebate schemes are neither  listed as abusive nor expressly prohibited. However, conducts not  expressly mentioned in FCCPA may still constitute an abusive practice  if it has the same effect similar to another prohibited abusive practice,  or is exclusionary and has an anticompetitive effect that outweighs its  technological efficiency and other pro-competitive gains.  

15 Tying and bundling 

Contractual tying, technical tying and bundling are prohibited as an  abusive practice in section 72(2)(d)(iii) of the FCCPA. 

16 Exclusive dealing 

Exclusive dealing is not expressly mentioned in the FCCPA as one of  the examples of a conduct that constitutes an instance of an abuse of  a dominant position. However, to the extent that exclusive dealing has  the same effect as a contractual tying, it may be challenged pursuant to  section 72(2)(d)(iii) of the FCCPA. 

Lastly, exclusive dealing arrangement or market restriction  between or among affiliated or interconnected undertakings, does not  constitute an abusive conduct by a dominant undertaking. 

17 Predatory pricing 

Predatory pricing is prohibited by section 72(2)(d)(iv) of the FCCPA,  which provides that an abuse of a dominant position occurs where the  dominant undertaking engages in the selling of goods or services below  their marginal or average cost. Accordingly, by virtue of this provision, the primary cost model for assessing a predatory pricing conduct  under the FCCPA is whether it is below marginal or average cost or  conversely, any pricing of goods or services by a dominant undertaking  below marginal or average cost will be presumed to be predatory.  

Owing to the absence of competition case law or FCCPC advisory,  it is not clear whether proof of recoupment is an essential element of a  predatory pricing conduct. 

18 Price or margin squeezes 

A margin squeeze occurs where a vertically integrated undertaking  prices an upstream (or wholesale) input that it sells to its own down stream (or retail) competitors at an excessive price or predatorily prices  its own retail services, thus making it impossible for its retail competitors to compete profitably. A margin squeeze is not expressly prohibited  in the FCCPA; however, both excessive pricing and predatory pricing  are separate abusive conducts and individually constitute an abuse of  a dominant position pursuant to sections 72(2)(a) and 72(2)(d)(iv) of the  FCCPA respectively. It is not clear whether a situation of margin squeeze  would be challenged under either (or both) of these provisions or in  the alternative challenged under the broadly phrased ‘exclusionary act’  conduct referenced in section 72(2)(c), which is broad enough to cover  an otherwise abusive conduct not expressly mentioned in the FCCPA.

19 Refusals to deal and denied access to essential facilities 

The FCCPA does not expressly make any provision that a refusal to deal  by a dominant undertaking constitutes an abusive conduct; however,  conducts not expressly prohibited in the FCCPA may still be caught by  section 72(2)(c) if it is exclusionary and has an anticompetitive effect  that outweighs its technological efficiency and other pro-competitive  gains. The FCCPA in section 72(2)(d)(i) also provides that requiring or  inducing a supplier or customer not to deal with a competitor constitutes an abusive conduct by a dominant undertaking, to the extent that  the anticompetitive effect of this conduct outweighs its technological  efficiency and pro-competitive gains.  

The refusal by a dominant undertaking to grant a competitor access  to an essential facility constitutes an abuse of a dominant position that  can be challenged. It is also important to state that the refusal by a  dominant undertaking to supply scarce goods to a competitor, when  supplying those goods is economically feasible, constitutes an abuse of  a dominant position.  

20 Predatory product design or a failure to disclose new  technology 

Both predatory product design and failure to disclose new technology  are not expressly mentioned in the FCCPA as statutory examples of  an abuse of a dominant position. However, to the extent that any of  these conducts is exclusionary and has an anticompetitive effect that  outweighs its technological efficiency and other pro-competitive gains,  it may be interpreted as constituting an abusive conduct and will come  within the scope of section 72(2)(c) if engaged by an undertaking with  market power in the relevant market. 

21 Price discrimination 

Price discrimination is not a statutory example of an abusive conduct  engaged by a dominant undertaking mentioned in the FCCPA. However,  Regulation 8(b) of the CPR applicable in the communications sector,  provides that ‘discriminating in the provision of interconnection or other  communications services or facilities to competing licensees, except  under circumstances that are objectively justified based on supply  conditions, such as discrimination based on the costs of supply’ is a  conduct deemed to result in a substantial lessening of competition.  

22 Exploitative prices or terms of supply 

Exploitative prices practices such as the charging of excessive price by a  dominant undertaking constitutes an instance of an abuse of a dominant  position pursuant to section 72(2)(a) of the FCCPA. 

On the other hand, exploitative terms of supply while not expressly  mentioned in the FCCPA may fall under prohibitions relating to abusive  conducts engaged by a dominant undertaking. For instance, selling  goods or services on the condition that the buyer purchases separate  goods or services unrelated to the object of a contract, or forcing a buyer  to accept a condition unrelated to the object of a contract constitutes an  exploitative term of supply if it is imposed by a dominant undertaking as  part of its contractual stipulation of supply.  

23 Abuse of administrative or government process  

Abuse of administrative or government process is not listed as an  abusive conduct in the FCCPA. 

24 Mergers and acquisitions as exclusionary practices 

The dominance rules of the FCCPA do not apply to mergers and acquisitions; rather mergers are assessed on the basis of whether it is likely to  substantially prevent or lessen competition. In this regard, mergers that  would result in a dominant position of the merged undertaking would  also be caught by the substantial lessening of the competition test used  for assessing mergers under the FCCPA.  

25 Other abuses 

The statutory examples of abusive practices have been listed in the  responses to specific forms of abuse above. However, the list is not  exhaustive and conduct not expressly mentioned in the FCCPA may  still constitute an abusive practice if it has the same effect similar to  another prohibited abusive conduct, or is exclusionary and has an anticompetitive effect that outweighs its technological efficiency and other  pro-competitive gains.  


Enforcement authorities 

26 Which authorities are responsible for enforcement of the  dominance rules and what powers of investigation do they  have? 

The FCCPC is statutorily authorised by the FCCPA to enforce the provisions of the FCCPA. In carrying out its enforcement powers, the FCCPA,  inter alia, authorizes the FCCPC to enter and search any premises,  inspect and remove from the premises any article, document or extract  in the possession or under the control of any person. The FCCPC is also  authorised by the FCCPA in circumstances where there are grounds to  believe that a violation, civil or criminal of the provisions of the FCCPA  or any regulation made thereunder, was, is being or will be committed,  take any interim measure including authorising an authorised officer to  exercises its powers pending the issuance of a warrant to that effect.  The FCCPC is also authorised by the FCCPA to request for information  or document from any person.  

In addition to the enforcement power of the FCCPC, the FCCPA  authorises the FCCPT to adjudicate over conducts prohibited under  the FCCPA. The Court of Appeal is charged with the responsi bility of reviewing petitions by the FCCPC and issuing warrants for  the commencement of investigation into activities of undertakings  presumed to be anticompetitive. 

A warrant issued in this regard confers on the authorised officer  the powers to: 

  • enter and search the place or premises specified in the warrant  within 30 days of issuance; 
  • use such assistance as is reasonable in the circumstance;
  • use force for gaining entry and for breaking open any article or  thing as is reasonable in the circumstance; 
  • search for and remove documents or any article or thing that the  person executing the warrant believes on reasonable grounds may  be relevant; 
  • where necessary, make copies of documents or extract from  documents, that the person executing the warrant believes on  reasonable grounds may be relevant; and 
  • where necessary, to require a person to reproduce or assist any  person executing the warrant to reproduce, in usable form, infor mation recorded or stored in a document or retrieval system. 

Sanctions and remedies 

27 What sanctions and remedies may the authorities impose? May individuals be fined or sanctioned? 

Where the FCCPC establishes that an undertaking has abused or is  abusing its position of dominance, the FCCPC may direct the undertaking  to immediately cease its abusive practice. An undertaking that abuses  its dominant position commits an offence and is liable on conviction to a  fine of not less than 10 percent of its turnover in the previous financial  year or to such higher percentage as the Court of Appeal may determine  given the circumstance of the particular case. A director of an under taking that fails to cease an abusive practice after receiving an order of  the FCCPC to that effect is liable on conviction to imprisonment for a term  not exceeding three years, or to the payment of a fine not exceeding 50  million Nigerian naira or to both fine and imprisonment. 

The FCCPT and the Court of Appeal are also empowered to impose  sanctions on an undertaking found to be conducting its activities in a  manner that is in contravention of the FCCPA. The sanctions range  from monetary fines that could be a percentage of the turnover of the  preceding business year or such other percentage as the Court of Appeal  may determine under the circumstances of the particular case. It should  be noted that the FCCPT is only able to impose administrative penalties  which are stated in the FCCPA whereas the Court of Appeal has some  discretion on the sanctions to be imposed.  

Enforcement process 

28 Can the competition enforcers impose sanctions directly or must they petition a court or other authority? 

The FCCPC and other sector-specific regulators with competition  enforcement mandate can impose sanctions directly without recourse to  the court or the FCCPT. However, all appeals or request for review of  the exercise of the competition or consumer protection powers of any  sector-specific regulator shall in the first instance be heard and determined by the FCCPC before such appeals can proceed to FCCPT. Any  sanction imposed by the FCCPC is subject to review by the FCCPT in the  first instance. 

Enforcement record 

29 What is the recent enforcement record in your jurisdiction? 

Recently, the FCCPC issued a cease-and-desist order to several ride hailing companies which required drivers as a condition for being on  their platforms to take insurance from a particular insurance company.  However, prior to the enactment of the FCCPA in the 2018, the Consumer  Protection Council (CPC), the precursor agency to the FCCPC success fully obtained an order from a Federal High Court injuncting a dominant  pay television operator from increasing its subscription fee. As at the time of writing, this order has been appealed and the case is ongoing.  In addition, in 2013, the NCC conducted a dominance assessment in  certain communications market, after which it imposed ex ante regulatory obligations on two communications licensees found to be dominant  in the identified markets. 

Contractual consequences 

30 Where a clause in a contract involving a dominant company  is inconsistent with the legislation, is the clause (or the entire  contract) invalidated?  

Under Nigerian law, a clause that is illegal and violates any law is void and  unenforceable and may be severed from the rest of the contract, insofar  as the illegal part is not fundamental to the performance of the contract  and the rest of the contract can be enforced without the void part. 

Private enforcement 

31 To what extent is private enforcement possible? Does the  legislation provide a basis for a court or other authority  to order a dominant firm to grant access, supply goods or  services, conclude a contract or invalidate a provision or  contract?  

Yes, private enforcement is possible. Under the FCCPA, a private  party who is a consumer may file a complaint with the FCCPC in the  prescribed manner and form alleging that an undertaking has acted in a  manner inconsistent with the provisions of the FCCPA. Notwithstanding  the redress which the FCCPC may impose, the consumer also has a  right of civil action for compensation or restitution in a court of competent jurisdiction under the FCCPA. 

In addition, a consumer protection group accredited by the FCCPC  has a right to commence or undertake any act to protect the interests  of a consumer individually or of consumers collectively in any matter  before the FCCPC or a court of competent jurisdiction.  


32 Do companies harmed by abusive practices have a claim for  damages? Who adjudicates claims and how are damages  calculated or assessed?  

Yes, a company harmed by an abusive practice may request for a  compensation order pursuant to section 154(1) of the FCCPA from  the court that an undertaking was convicted for an offence under the  FCCPA, requiring the undertaking to pay compensation for any personal  injury, loss or damage resulting from that offence of such an amount  as it may deem fit or assessed by a competent professional authority. 

As at the time of writing, the provisions of the FCCPA have not been  tested before the courts. However, damages under Nigerian law of tort  is guided by the Latin principle of restitutio in integrum, that is insofar  as the damages are not too remote, the plaintiff shall be restored, as far  as money can do it, into the position he or she would have been if the  tort had not occurred. 


33 To what court may authority decisions finding an abuse be  appealed?  

Decisions emanating from sector-specific regulators may, in the first  instance, be reviewed by the FCCPC before an appeal can be made to  the FCCPT. Decisions from the FCCPC are in the first instance deter mined by the FCCPT before an appeal can be made to the Court of  Appeal. Both the FCCPC and FCCPT may review the facts and the law  as the case may be. 


Unilateral conduct by non-dominant firms 

34 Are there any rules applying to the unilateral conduct of nondominant firms?  

The FCCPC contains no provision that applies to the unilateral conduct  of non-dominant firms.


Forthcoming changes 

35 Are changes expected to the legislation or other measures that will have an impact on this area in the near future? Are there shifts of emphasis in the enforcement practice?  

The FCCPA is a recent piece of legislation enacted in 2019 that repealed  the Consumer Protection Council Act and ascribed all the powers of  the CPC to the FCCPC. The FCCPT and the governing board of the  FCCPC are yet to be constituted though a chief executive officer of the  FCCPC has been appointed. It is expected that these relevant organs as  required under the FCCPA will be constituted in 2020.  

The FCCPC stated recently that the enforcement priority of the  FCCPC for 2020 would be to ensure that companies improve their mech anisms for resolving consumer disputes and that the FCCPC would  focus on wider consumer protection, education and engagement. 

Tamuno Atekebo 

[email protected] 

Chukwuyere E Izuogu [email protected] 

Oyeniyi Immanuel 

[email protected] 

Michelle Akpaka 

[email protected]

16D Akin Olugbade Street, Victoria Island Lagos
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