FCCPC moves to regulate AI marketing, businesses face N100 million penalty

The Federal Competition and Consumer Protection Commission (FCCPC) is proposing new rules that would subject businesses using artificial intelligence, machine learning and automated technologies for marketing to additional regulatory requirements in Nigeria.

Under the draft Sales Promotion Regulations, 2026, businesses using AI for sales promotions, marketing communications or consumer engagement directed at or accessible to Nigerian consumers would be required to register with the Commission.

The proposed framework, released on September 30, 2026, also introduces tougher financial penalties for breaches, with corporate entities facing fines of up to N100 million or 1% of their previous year’s turnover, whichever is greater.

AI generated content could require clear disclosure

The draft creates a dedicated framework for what it describes as “Artificial Intelligence and Automated Marketing”, reflecting the growing use of AI tools in advertising, customer engagement and digital promotions.

• Under the proposal, businesses that deploy, operate or use AI, machine learning systems or automated technologies for promotions, marketing communications or consumer engagement would have to register the use with the FCCPC.
• The draft further proposes that AI-generated or automated marketing content must be clearly identifiable as such.
• It also specifically addresses emerging marketing tools including AI chatbots, virtual influencers and automated messaging systems.

The proposed rules state that their use in marketing must be transparent and must not involve manipulation, misinformation or exploitation of consumer data or behavioural tendencies.

Businesses would also be required to allow consumers to opt out of automated or AI driven marketing communications.

N100 million fine proposed for corporate breaches

Beyond the AI provisions, the draft proposes a major increase in the financial consequences for businesses that breach the proposed Sales Promotion Regulations.

According to the proposed regulation, a natural person who contravenes the regulations could face a fine of up to N50 million.

For a corporate entity, the proposed penalty is up to N100 million or 1% of the company’s previous year’s turnover, whichever is greater.

• “A body corporate, shall be liable to an administrative penalty not exceeding NGN100,000,000.00 (One Hundred Million Naira) or 1% of its turnover in the previous year, whichever is greater.
• “Each director of an undertaking referred to in Regulations 61.2(b) is liable to be proceeded against as specified under Regulations 61.2(a). Such sanction may include disqualification as a director for a period not exceeding five (5) years,” the FCCPC stated in the draft regulation.

The draft also proposes additional penalties of up to N10 million for specific breaches, including failure to award a promised prize or failure to comply with the terms of a promotion.

A person who makes a false statement in an application or undertaking could also face a penalty of up to N10 million under the proposal.

Companies could be liable for AI driven decisions

The proposed framework would place responsibility for AI generated marketing messages and claims on the businesses deploying the technology.

Under the draft, an undertaking using AI generated content or automated promotional systems would be responsible and accountable for representations, messages and claims produced or communicated by those systems.

The rules would also impose liability where an AI system or automated tool produces misleading, discriminatory or harmful promotional outcomes.

This means businesses could not necessarily avoid responsibility for a misleading promotion by attributing the content or decision to an automated system.

AI regulation in Nigeria

The FCCPC’s proposal comes as the first attempt to regulate the use of AI in Nigeria amid rapid embrace of the technology across sectors.

• Earlier this year, an AI expert, Founder and Chief Executive Officer of CarbonAI, Debola Ibiyode, warned that Nigeria could undermine the economic potential of AI if it fails to establish strong regulatory guardrails.
• According to Ibiyode, innovation without appropriate safeguards creates risks that could ultimately discourage investment and reduce the profitability of AI solutions.

She noted that Nigeria’s growing adoption of AI presents an opportunity to unlock new economic value, but only if governments, businesses and technology providers work together to develop responsible governance frameworks.