The Competition and Consumer Protection (CCP) tribunal in Abuja has dismissed a suit challenging the price increase by MultiChoice Nigeria Limited.
A three-member panel of the tribunal on Tuesday dismissed the suit for lack of merit.
The suit was filed by Festus Onifade seeking to restrain the firm from hiking subscription fees for its services and other products.
Backstory
- Following Multichoice’s announcement on an increase in subscription for its television services which was to take effect from April 1, Mr Onifade who is a lawyer and the Coalition of Nigeria Consumers jointly sued MultiChoice and the Federal Competition and Consumer Protection Commission (FCCPC) over the increase.
- In an ex-parte motion filed on March 30, the claimants prayed the tribunal to restrain Multichoice from the price hike pending the hearing and determination of the motion on notice.
- Mr Onifade told the tribunal that in May and June 2020 he lodged a petition at the FCCPC MultiChoice was planning an increase on its tariff in 2020. However, the failure of the Tribunal to take action made him approach the tribunal.
- Ruling on the ex-parte application, The tribunal directed all parties in the suit to maintain “status quo antebellum.”
- However, Multichoice still went ahead with the increase in its subscription fees.
How the court ruled
In its judgement, the three-member panel of the tribunal led by Thomas Okosun held that the claimants failed to show evidence of hardship suffered by them as a result of the increase.
It held that “the claimants failed to show evidence or establish how they suffered psychological trauma, hardship or violation of their human rights” as a result of the price hike.
The tribunal which held that the price increase was valid, noted that the power to regulate or fix the prices of goods and services, lies with the president.
“Only the president has the powers to regulate or fix prices of goods and services under stipulated circumstances which do not apply in this instance,” it stated.
Consequently, the tribunal dismissed the suit for lacking merit.
The tribunal also ordered the Managing director of Multichoice to appear before it on September 8, with an audited financial report of 2021 for violating the tribunal’s order made on March 30.
Mr Okosun said “The Managing Director and directors of the 1st defendant (MultiChoice) are to appear before this honourable tribunal with certified true copies of their audited financial report of year 2021,”
It also ordered the FCCPC to expedite its investigation into the petition filed by Mr Onifade and confirm if MultiChoice operates a pay-as-you-go system in South Africa and submit its findings within six months
This is a sad development for Nigerian consumers. For years, we have been at the mercy of monopolistic and oligopolistic companies who charge exorbitant prices for sub-standard services.
This is why it is important for the government to intervene in these industries and protect consumers from being taken advantage of.
It is also important for the government to ensure that there is healthy competition in these industries so that companies are forced to lower prices and improve quality in order to stay competitive.
This is the only way that Nigerian consumers will get a fair deal.
Nigerians and their Culture of Entitlement.
Multichoice is NOT the only cable or Pay-TV service in Nigeria, so anyone who thinks their charges too exorbitant is free NOT to subscribe. The prices of goods and foods produced right here in Nigeria are increasing by the minute (some more than doubling and tripling in a year), but a PRIVATE business that buys a lot of its programming in US dollars while charging subscription fees in the free-falling Naira should not raise its fees – just because so many Nigerians feel ENTITLED to watch the English Premier League (most of those same folks could not name half the teams in the Nigeria league, but they want you to believe that their grouse against Multichoice/DSTV is based on some weird notion of ‘patriotism’ and protecting the Nigerian consumer).
Multichoice/DSTV is NOT a public utility or a public or social service. It is also not a Nigerian government parastatal or company, which can afford to lose billions while nonetheless employing hundreds of employees (like the refineries, Ajaokuta, etc.). Instead, it is an actual for-profit company whose BUSINESS model is to make enough money to return a distribution to their shareholders who took the RISK of financing the company, repay their bank or other financial debts, and continue to invest in the growth of the company.
If you believe that you have a better BUSINESS model where a company can charge peanuts (perhaps even below the cost of goods or production), then feel free to join the fray, undercut Multichoice/DSTV and make a killing with TONS of cash for yourself and your investors. Otherwise, let the MARKET (rather a clueless government that has consistently failed to run even commercial monopolies itself) properly “regulate” itself. In effect, if/when Multichoice/DSTV’s services no longer justify its pricing, the consumers will “vote” with their feet and wallets.