FCCPC recent oversights: The need for balanced regulation

By Wale Alabi

In recent times, the Federal Competition and Consumer Protection Commission (FCCPC) has taken a series of aggressive regulatory actions that can only be described as behaving like a bull in a China shop. The latest in this string of actions is the final order issued against Coca-Cola Nigeria and the Nigerian Bottling Company (NBC) for alleged misleading trade descriptions igniting an unnecessary media frenzy. The official statement which should ordinarily have remained a communication between the FCCPC and Coca-Cola/NBC was instead posted on X (formerly Twitter), as if the FCCPC needed to play to the gallery in doing its job.

Further from raising unnecessary attention, the statement went on to accuse Coca-Cola/NBC of misleading trade description and unfair marketing practices, all of which seem like trumped charges which truly hold no water, except where the intent seems to be to give a dog a bad name to hang it.

On further investigation of this issue, the allegations seem to have been firmly denied by the companies, yet the FCCPC’s stance remains rigid and punitive, threatening to levy substantial fines and whipping up public sentiments to help lubricate their rigid path to claiming yet another victim. Now, looking at the victims that the FCCPC have chosen to claim, one wonders why they are all foreign firms – from Meta (WhatsApp) and now Coca-Cola – one wonders if this is a sinister attempt at revenue mobilization as opposed to really defending the interest of the Nigerian consumer. Were the latter to be true, then defending the consumer should truly mean going after Nigerian Banks for downtimes and unexplained charges; or going after the Electricity Distribution companies for unexplained outages; or going after Airlines for abysmal and wanton changes of flight times and outright flight cancellations without recourse to customers. But these have not met with the FCCPC’s sensational regulatory protocols such as been observed with the actions pursued against Meta and recently Coca-Cola – all foreign companies that can be blackmailed in the media and fined in hard currency.

While the FCCPC’s mandate to protect consumer interests is crucial, its recent actions raise concerns about the broader implications for Foreign Direct Investment (FDI) and Nigeria’s business environment as this aggressive posture of the FCCPC could be seen as a significant disincentive to foreign investors, potentially hampering job creation and economic growth in Nigeria.

The Act empowering the FCCPC provides for the safeguarding of consumer rights, promoting fair competition, and ensuring that businesses operate transparently. However, how it exercises its authority can have far-reaching consequences. Already the landscape is awash with too many contradictions on the path of the FCCPC as seen from its recent posturing. This can only hurt the economy and harm the consumers which the act seeks to protect.

Impact on Foreign Direct Investment

Nigeria has been striving to attract foreign investment to stimulate economic growth, create jobs, and improve living standards. Foreign companies like Coca-Cola and WhatsApp are significant players in this landscape. They bring not only capital but also expertise, technology, and employment opportunities to the table. However, the FCCPC’s regulatory rascality towards these companies may inadvertently undermine the government’s objectives.

Foreign investors closely monitor the regulatory environment in potential investment destinations. They seek stability, predictability, and fairness. When a regulatory body appears to be rascally and petty in its dealings with foreign firms, it sends a concerning signal. The FCCPC’s recent actions, including the fines on WhatsApp, create an impression of an unpredictable and hostile business environment, where a set of companies are set apart from national realities where local companies have the right to infringe with little or no consequences but foreign companies already overburdened with tax, the absence of economic infrastructure and other deficiencies of the Nigeria system are now singled out, publicly embarrassed and wantonly fined for no just cause. This can only continue to worsen our ease of doing business rating as opposed to protecting consumers.

The Nigerian government has made significant efforts to attract foreign investment, implementing various policies and incentives to make the country more business-friendly. However, these efforts can be easily undermined by regulatory bodies that appear hostile to foreign businesses, as that is surreptitiously what the actions of the Federal Competition and Consumer Protection Commission portends. Investors seek stability and predictability, and an overly aggressive regulatory environment creates uncertainty and risk which can be a disincentive, deterring potential investors and harming Nigeria’s reputation as a viable investment destination.

The media plays a critical role in shaping public perception and opinion. However, sensationalism can distort the reality of a situation and exacerbate tensions. The use of the media by FCCPC for official communication with foreign firms has often been characterized by alarmist headlines and a narrative of confrontation. This approach not only fuels public outrage but also contributes to a broader narrative of foreign businesses as adversaries rather than partners.

This adversarial narrative is counterproductive. Foreign companies are not enemies; they are stakeholders in Nigeria’s economic development. They contribute to the economy, provide jobs, and support local communities. The tendency to vilify them through sensationalist reporting undermines the potential for constructive dialogue and collaboration. It also overlooks the complex realities of the business environment, where compliance issues may arise from misunderstandings or differing interpretations of regulations rather than deliberate malfeasance.

A Call for a Balanced Approach

Regulation is necessary and it is a vital component of a functioning economy. However, it must be balanced, fair, and transparent. Regulatory bodies like the Federal Competition and Consumer Protection Commission have a dual mandate: to protect consumers from unfair practices and to create an environment conducive to business growth and investment. However, when regulation becomes overly aggressive and punitive, it risks creating a hostile environment for businesses, particularly foreign ones, which are essential for economic development and job creation.

The FCCPC’s recent actions suggest a need for introspection and recalibration. The Commission must consider the broader economic implications of its decisions and actions. It should strive to protect consumers while also fostering an environment that encourages investment and economic growth.

Its approach should be characterized by sobriety and collaboration. Rather than issuing sensational statements, the Commission should engage with companies constructively. Open dialogue and cooperation can lead to better outcomes for all stakeholders. The goal should be to ensure compliance with regulations in a manner that respects the legitimate interests of businesses and consumers alike. The current approach, characterized by harsh and aggressive statements, risks undermining Nigeria’s attractiveness as an investment destination and harming the broader economy.

The fight against foreign companies must stop. It is not a question of compromising consumer protection or allowing businesses to flout regulations. Rather, it is about recognizing the value of foreign investment and treating foreign companies as partners in Nigeria’s economic development. A combative approach is unlikely to achieve meaningful consumer protection or foster a healthy business environment.

Consumer protection is a noble and essential goal. However, it should not come at the expense of economic growth and development. The FCCPC must strike a balance between these competing interests. It should protect consumers from genuinely harmful practices without creating an overly hostile environment for businesses. This balance is not easy to achieve, but it is crucial for Nigeria’s long-term prosperity.

Foreign companies like WhatsApp, Coca-Cola, and others have made significant contributions to Nigeria’s economy. They have created jobs, invested in infrastructure, and supported local businesses. They deserve fair treatment and protection under the law. The FCCPC must ensure that its actions are proportionate, justified, and based on a thorough understanding of the issues at hand.

The Commission should also work to educate consumers and businesses about their rights and responsibilities. By promoting awareness and understanding, the FCCPC can foster a culture of compliance and cooperation. This approach will benefit consumers and businesses and contribute to a more robust and resilient economy.

It is time for the FCCPC to adopt a more sober and collaborative perspective. The Commission should engage constructively with businesses, treat foreign companies as partners in Nigeria’s development, and prioritize fair and transparent regulation. By doing so, the FCCPC can protect consumers, promote fair competition, and contribute to a more prosperous and inclusive economy. The fight against foreign companies must stop, and the focus must shift to building a business environment that supports growth, innovation, and opportunity for all.

In conclusion, the FCCPC must strike a balance between regulation and business growth. It must protect consumers while also creating an environment that attracts and retains foreign investment. By doing so, it can contribute to Nigeria’s economic development and the well-being of its citizens.

Wale Alabi writes from Lagos, Nigeria.