Administrative Penalties Regulations, Statutory Instrument no. 68 of 2020

1. Scope of the regulations.

2. Objectives of the regulations.

3. Methodology.

4. Egregious violation.

5. Time Restriction.

6. Aggravating and mitigating factors.

7. Procedure in imposing an administrative penalty.

8. Consent Order.

9. Appeals.

10. Omnibus provisions.

11. Discretion.

12. Definitions.

13. Short title and commencement. SCHEDULE 1 SCHEDULE 2 B 3216 B 3217 S. I. No. 68 of 2020 FEDERAL COMPETITION AND CONSUMER PROTECTION ACT, 2018 A29 (Act No.1 of 2019) ADMINISTRATIVE PENALTIES REGULATIONS, 2020 [21st Day of December, 2020] Commence- ment. In exercise of the powers conferred upon it by sections 17, 18 (1)(h) and 163 of the Federal Competition and Consumer Protection Act, 2018 (“the Act”), and all other powers enabling it in that behalf, the Federal Competition and Consumer Protection Commission hereby makes the following Regulations.

1. These Regulations provide a regulatory framework for the Scope of the administration and imposition of administrative penalties under the Act and all Regulations. matters related thereto.

2. These Regulations shall— Objectives of the (a) provide the applicable principles relevant in the determination of regulations. administrative penalties pursuant to the Act ; (b) outline the methodology for calculation and determination of penalties in the process leading to the imposition of administrative penalties ; (c) clarify the process relating to administrative penalties including understanding mitigating and or aggravating factors considered in determining administrative penalties ; (d) provide certainty and transparency in the method of determining administrative penalties.

3.—(1) The Commission shall apply the following methodology in Methodology. imposing administrative penalties, more particularly described in the steps and formula specified in Schedule 2,— (a) determine the nature or type of the violation under the Act, applicable law, or any regulation or order of the Commission ; (b) determine the base amount ; (c) consider the duration of the violation ; (d) consider mitigating and/ or aggravating factors ; and (e) round off any amount that exceeds the cap provided by the Act. (2) The Commission shall in addition to initially considering the inappropriateness of the conduct or action subject of regulatory action, consider the nature of the conduct which constitutes that violation to determine whether it is negligent, reckless, unconscionable, wilful, deliberate or egregious. B 3218 (3) The Commission shall, subsequent to sub-regulation 2, determine the base amount as specified in Schedule 1 which may be— (i) a proportion of the relevant annual turnover ; or (ii) a proportion of the statutory fine/penalty provided under the Act ; or (iii) a fixed amount. (4) The Commission shall, subsequent to sub-regulation 3, determine the duration of the violation and add a component of the duration to the amount determined under sub regulation 3 as specified in Schedule 2. (5) The Commission shall, subsequent to sub-regulation 4, round off the figure obtained in sub-regulation 4 if it exceeds the cap provided by the relevant section of the Act. (6) The Commission shall, subsequent to sub-regulation 5, consider factors that may mitigate and/or aggravate the amount attained in subregulation 5, by way of a discount or premium expressed as a percentage of that amount, between ten and fifty percent, that is either subtracted from or added to it. (7) Where the amount attained in sub-regulation 6 exceeds a cap provided under the Act, the Commission shall round off the amount which shall constitute the administrative penalty. Egregious 4. Where the Commission determines subsequent to sub-regulation 2 of Violation. regulation 3 that the violation is egregious in nature, it shall seek the maximum allowable penalty, and may in addition, pursue criminal prosecution as appropriate under the Act. Time 5. The imposition of an administrative penalty shall not be restricted to Restriction. the year in which the investigations were concluded. Aggravating 6.—(1) In assessing the penalty to be imposed, the Commission may and consider any aggravating or mitigating factors. Mitigating Factors. (2) Aggravating factors include but are not limited to— (a) role of the undertaking as a leader, active participant, or instigator in or, of the violation ; (b) involvement in or awareness of the violating conduct by directors and key operatives including senior management as defined in the organogram of the undertaking under consideration who knew or reasonably ought to have known that the conduct in issue constituted a violation ; (c) retaliatory or other coercive actions or measures taken against other persons or undertakings including whistle-blowers or leniency applicants aimed at ensuring the continuation of the violation ; (d) Timely acceptance of responsibility, meaningful assistance to the investigation, non-responsiveness, failure to cooperate, or delay by an undertaking. B 3219 (e) repeat violations which refers to an undertaking or other undertaking in the same group having previously violated the same/similar provisions of the Act or similar provisions in any regulations or orders ; (f ) prevalence of the alleged violation, which refers to whether the conduct is widespread and the application of sanctions is likely to have a wide deterrent effect ; (g) whether the alleged violator has demonstrated resistance by being obstructive or defiant towards the Commission ; (h) period (extended or otherwise) violation has existed and or continued without remedy or abatement ; (3) Mitigating factors include but are not limited to— (a) role of the undertaking, such as duress, pressure or other involuntary or mitigating circumstances ; (b) record of previous of same or similar conduct, including under other laws/regulations or other regulators ; (c) appropriateness of, and willingness of violator to swiftly and remorsefully accept modified/less punitive enforcement remedies such as consent agreements or understandings, undertakings, written assurances, conditional or unconditional supervision or any other compliance mechanism permitted by law ; (d) participation in the Commission’s leniency programme ; (d) full, complete and transparent cooperation including timely acceptance of responsibilities, full and frank disclosure and provision of information and a collaborative approach that limits expenditure and resources in investigating and enabling speedy/effective disposition or conclusion of investigation or enforcement process ; (e) termination of the violation as soon as the Commission intervenes ; (f ) violation is on account of innocent mistake or misapprehension that does not result in meaningful loss or injury, the violation is committed by the defaulter as a result of a genuine and/or innocent mistake ; and (g) size of violator, nature of business, sophistication, and expectations with respect to resources and opportunity to ensure compliance with law and avoid violations.

7.—(1) When the Commission makes an order imposing an administrative Procedure in penalty on an undertaking or a person, such order shall be in writing, identify the imposing an violation, factors the Commission took into consideration in determining the penalty administrative penalty. and deadline by which the penalty is required to be paid. (2) Nothing in these regulations shall affect the discretion of the Commission to review an amount payable as penalty under this regulation upon a request for reconsideration made by an undertaking or individual. B 3220 (3) In making a review of the penalty payable, the Commission shall have due consideration to— (a) errors in computation of the penalty payable ; (b) the undertaking’s or individual’s desire to timeously reach a settlement with the Commission before prosecution or dissipation of the Commission’s resources on investigation activities ; (c) the undertaking’s assistance to the Commission towards investigating other violators of the Act in the industry. (4) A request for reconsideration under subregulation 2 shall be for the purpose of reviewing the quantum of the penalty and shall not affect the underlying findings and order of the Commission. Consent 8. The Commission and the defaulter may reach an agreement on the Order. terms of an appropriate order for the payment of an appropriate administrative penalty. Appeals. 9. Pursuant to section 47 of the Act, any appeal against an administrative penalty may be referred to the Competition and Consumer Protection Tribunal for determination. Omnibus 10.—(1) Where there is no specific penalty imposed under the Act or Provisions. a base sum specified under Schedule 1, the Commission shall impose an administrative penalty following the methodology specified by regulation 3 and Schedule 2 by applying a base sum as it deems fit given the circumstances of the case. (2) Notwithstanding the imposition of an administrative penalty, the Commission may consider other remedies that seek to address the harm caused to competition or consumers as a result of the violation. (3) In certain cases, the Commission may impose a nominal administrative penalty taking into account the facts of each case. (4) Where applicable, the Commission will determine the interest payable in relation to the imposed administrative penalty in terms of the applicable monetary policy rate in force at the time of the determination. (5) Upon conclusion of an investigation or enforcement, the Commission shall be reimbursed for every expense incurred and resource including reasonable time and effort expended in the course of the investigation or enforcement. Discretion. 11. Notthing in these regulations shall be construed as circumscribing or limiting the Commission’s general statutory discretion to consider administrative penalties on a case-by-case basis as the circumstances require. B 3221

12.—(1) In these regulations, Definitions. “Act” means the Federal Competition and Consumer Protection Act 2018 ; “Administrative Penalties” means the monetary penalties or fines prescribed in this Regulation for violation of the provisions of the Act ; “Defaulter” means a person (either a private individual or a corporate entity) who is adjudged by the Commission to have breached a provision of the Act or any subsidiary legislations made thereto ; “Regulations” means these Administrative Penalties Regulations, and in some instances, it may refer to other regulations issued by the Commission pursuant to the Act. (2) Terms used in this Regulation shall unless otherwise stated, have the meaning ascribed to them in the Act.

13.—(1) These regulations may be referred to as the Federal Short title Competition and Consumer Protection Commission (Administrative and Commence- Penalties) Regulations, 2020. ment. (2) These Regulations shall become effective on the date of publication in the Federal Gazette. DATED at Abuja this 21st day of December, 2020. BABATUNDE IRUKERA Chief Executive Officer Federal Competition and Consumer Protection Commission B 3222

SCHEDULE 1 TABLE OF APPLICABLE BASE SUMS FOR COMPUTATION OF ADMINISTRATIVE PENALTIES Description of Violation Base Sum Base Sum Base Sum (Where Act (Individual) (Corporate) does not distinguish between corporate and individual violations) PART VI 1. Failure to allow an authorised officer N500,000 entry into any premises as required under Section 27 of the Act. 2. Obstruction of officer executing a 25% of warrant under Section 28(5) of the N5,000,000 = Act. N1,250,000 3.(a) Failure to appear before the Commission 25% of after being served a summons under N20,000,000 = Section 33(3) of the Act. N5,000,000 3.(b) Failure to produce document after 25% of being served a summons under N20,000,000 = Section 33(3) of the Act. N5,000,000 4. Wilful obstruction or Interruption of N5,000,000 50% of proceedings of the Commission under N20,000,000 = Section 33(4) of the Act. N10,000,000 5. Publication or communication of any 50% of 25% of information, document or evidence N1,000,000 = N 50,000,000 = contrary to the order of the Commission N500,000 N12,500,000 under section 35 (3) of the Act. 6. Destruction of any records required 25% of by the Commission under section 36 N50,000,000 = of the Act. N12,500,000 PART VIII 7. Market division under section 59(2)(b) 50% of 1% of Annual of the Act. N5,000,000 = Turnover N2,500,000 B 3223 8. Imposition of non-customary 50% of 1% of Annual supplementary obligations under N5,000,000 = Turnover 59(2)(e) of the Act. N2,500,000 9. Solicitation of exclusionary conduct 50% of 1% of Annual contrary to Section 61 of the Act. N5,000,000 = Turnover N2,500,000 10. Agreements by suppliers in derogation 50% of 1% of Annual of Section 62 of the Act. N5,000,000 = Turnover N2,500,000 11. Maintenance of minimum resale price 50% of 1% of Annual under Section 63-65 of the Act. N 5,000,000 = Turnover N2,500,000 12. Failure to comply with the order of the 50% of 2% of Annual Commission under Section 67(1) of the N50,000,000 = Turnover Act to immediately cease anti- N12,500,000 competitive practice. PART IX 13. Abuse of a dominant position under 1% of Annual Section 72 &73 (3) of the Act. Turnover 14. Failure to comply with the order of the 50% of 2% of Annual Commission under Sections 73 (1)(b) N50,000,000 = Turnover and 74 of the Act to immediately cease N12,500,000 abusive practice. PART X 15. Failure to furnish Commission with 50% of information on any monopoly N10,000,000 = investigation under Section 80(1) of N5,000,000 the Act. 16. Providing false information or 50% of statement to the commission in respect N2,000,000 = of monopoly investigation under N1,000,000 Section 80(2) of the Act. PART XI 17. Failure to comply with order under 25% of 1% of Annual Section 88 and 90 (3) and (4) N50,000,000 = Turnover N12,500,000 PART XII 18. Implementing merger without approval 2% of Annual (gun-jumping) under Section 96 (4) and Turnover (7) of the Act. B 3224 PART XIV 19. Price fixing and refusal to supply under 50% of 2% of Annual Section 107 (1) and (4) of the Act. N10,000,000 = Turnover N5,000,000 20 Conspiring to restrain or injure 50% of 2% of Annual competition under Section 108 (1) and N10,000,000 = Turnover (3) of the Act. N5,000,000 21. Entering into an agreement for bid- 50% of 2% of Annual rigging under Section 109 (1) and (3) N10,000,000 = Turnover of the Act. N5,000,000 22. Obstructing investigation of the 50% of Commission under Section 110 of the N2,000,000 = Act. N1,000,000 23. Refusal to produce, destruction, 50% of 2% of Annual alteration, delay or withholding of N10,000,000 = Turnover document or information under N5,000,000 Section 111 (1) and (2) of the Act. 24. Giving false or misleading information 50% of 2% of Annual under Section 112 Part XII of the Act. N10,000,000 = Turnover N5,000,000 25. Failure to appear before Commission 50% of without reasonable excuse or refusal N10,000,000 = to take oath or answer questions under N5,000,000 Section 113 (1) of the Act. PART XV 26. Failure to adequately display N50,000- N500,000 consumer-relevant information in plain and understandable form under Section 114 of the Act. 27. Failure to adequately display price of N50,000 N500,000 goods and services under Section 115 of the Act. 28. Applying trade description/labelling N1,000,000 N5,000,000 to mislead consumers under Section 116 of the Act. 29. Failure to apply conspicuous notice N1,000,000 N5,000,000 on reconditioned, rebuilt, remade, second hand goods under Section 117 of the Act. B 3225 30. Failure to enforce consumers’ right to N100,000 N500,000 return goods in approved circumstances provided under Section 122 of the Act. 31. Failure to comply with the general N1,000,000 N5,000,000 standards prescribed under Section 123 of the Act, for the marketing of goods and services. 32. Applying physical force, coercion, N1,000,000 N5,000,000 undue influence or pressure, unfair tactics in the marketing or supply of goods or services or taking advantage of consumer ignorance or impairment under Section 124 of the Act. 33. Making false, misleading or deceptive N1,000,000 N5,000,000 representation to a consumer under Section 125 of the Act. 34. Publishing a false testimonial or N1,000,000 N5,000,000 representation as to a test under Section 126 of the Act. 35. Employing unfair, unreasonable or N1,000,000 N5,000,000 unjust contract terms in the manner prohibited under Section 127 of the Act. 36. Entering into an agreement to subvert N1,000,000 N5,000,000 the provisions of the Act. 37. Failure to enforce consumer’s rights N1,000,000 N5,000,000 to quality and safety of goods and services under Section 130 and 131 of the Act. PART XVI 38. Failure of a manufacturer to label 25% of 1% of Annual goods properly contrary to Sections N10,000,000 = Turnover 134 & 135 of the Act. N2,500,000 39. Failure of a manufacturer or distributor 25% of 1% of Annual to withdraw hazardous goods from the N10,000,000 = Turnover market. N2,500,000 PART XVIII 40. Failure to comply with Notice under 50% of 50% of section 159. N1,000,000 = 10,000,000 = N500,000 N5,000,000 B 3226 41. Providing false or misleading 50% of 50% of information under Section 159. N1,000,000 = N10,000,000 = N500,000 N5,000,000 42. Resistance, obstruction or delay the 50% of 50% of Commission pursuant to warrant under N1,000,000 = 10,000,000 = Section 30(3). N500,000 N5,000,000 GENERAL PROVISIONS N5,000,000 43. Disobedience of Commission’s Order/ Directives. B 3227

SCHEDULE 2 (Regulation 3) STEPS AND FORMULAR FOR CALCULATION 1. These are the steps to calculating administrative penalties— Step 1 : Calculation of the base amount as specified in Schedule 1. Step 2 : Adding M to Step 1, which is a factor of the number of months of violations divided by 12 multiplied by the base penalty. For instance, if the violation has lasted 6 months, and the base penalty is N1,000,000, M will be 6/ 12 x N1,000,000. M will be N500,000. Step 3 : Rounding off the figure obtained in step 2 if it exceeds the cap provided by the Act. Step 4 : Considering factors that might mitigate and/or aggravate the amount reached in step 3, by way of a discount or premium expressed as a percentage of that amount that is either subtracted from or added to it, AM. Step 5 : Rounding off this amount if it exceeds the cap provided for in the Act. 2.—(a) For the purposes of the formular, the following are taken into account— (i) the base penalty ; (ii) the duration of the months of the violations, M ; (iii) the ratio of the aggravating factors (i.e., RAF) ; (iv) the ratio of the mitigating factors (i.e., RMF) ; (b) The penalty formula therefore shall be as follows : P = B + M ± [X% of (B+M)] ; Where : * P is the final penalty. * B is the base penalty. * M is the factor of the number of months divided by 12 multiplied by the base penalty. For instance, if the violation has lasted for 6 months, and the base penalty is N1,000,000, M will be 6/ 12 x N1,000,000. M will be N500,000. * X% represents the net result of RAF and RMF represented as a discount or premium. * RAF represents the ratio of aggravating factors. * RMF represents the ratio of mitigating factors. It should be noted that in the formula the resulting figure from the terms RAF, RMF, X is always in percentage form. B 3228 3. For the purposes of illustration, assume the case of a violation with a base sum of N1,000,000 a violation for the duration of 6 months and a RAF of 40% and RMF of 10%. The formular will be applied as follows— * P = B + M ± [ X% of (B+M)] B = N1,000,000 M = 6/ 12 x N1,000,000 = N 500,000 X = RAF-RMF X= 40% - 10% = 30% P = B + M ± [X% of (B+M)] P = N1,000,000 + N 500,000 + 30% (N 1,000,000 + N 500,000) P = N1,500,000 + 30% of N 1,500,000 P = N1,500,000 + N450,000 P = N1,950,000