MultiChoice price adjustments: FCCPC and same old song

BY KOLADE OGUNSAKIN

Even the most generous of prize givers will not hand any out for a prediction that the Federal Competition and Consumer Protection Commission (FCCPC) will get into a fit when there is an announcement of price increase. By this, I mean when one company (and one company only) reviews the rates it charges its customers. That company is pay television service outfit, MultiChoice Nigeria.

It seems to matter to the FCCPC that its anger is public, so that the commission is perceived as though it is fighting for the consumer. The incumbent FCCPC Executive Vice Chairman, Tunji Bello, is continuing in that tradition. Under Bello’s predecessor, Dr. Babatunde Irukera, the commission, without fail, made an issue of MultiChoice’s price adjustments, including the use of its tribunal to attempt force the company into price-freezes.

It did not matter whether economic conditions, almost always hostile to businesses and individuals, dictated that prices be adjusted. Eleven times out 10, MultiChoice is dragged for increasing prices-by the FCCPC. I do not remember any other company whose price review gets the FCCPC howling like a wolf.

We are back to the same game. On Tuesday afternoon, the media reported that the FCCPC had summoned MultiChoice to an investigative hearing where it is expected to justify the recent price reviews.

Reports quoted FCCPC’s Corporate Affairs Director, Ondaje Ijagwu, as saying that the commission is concerned about recurrent unilateral price hikes, potential market dominance abuse, and perceived anti-competitive practices in the pay TV industry. Ijagwu also said the FCCP will sanction MultiChoice if found wanting in adherence to fair market principles. I hope, very strongly, that MultiChoice is found wanting. As a subscriber, that has been my wet dream for quite a while. A fulfilment of that dream at this time would leave me in near-sexual raptures.

To hope and to expect, however, are not the same. So, I do not expect that MultiChoice to be found to have breached fair market principles. Neither do I expect that the FCCPC would not understand why the company has increased the tariffs on its DStv and GOtv platforms except it has staff, whose purchasing power has not cratered since 2023 when the costs of goods and services as well as of doing business began making consistently giant leaps. The commission, I believe, also knows it does not have the power to regulate prices. I have not made all this up.

In September 2022, a three-member Competition and Consumer Protection Tribunal (CCPT) headed by Mr. Thomas Okosun dismissed a suit filed against MultiChoice over its price adjustments of that year. The tribunal held that the power to regulate prices of goods and services does not reside in the FCCPC, but only in the President.

The tribunal equally held that the claimants failed to prove that MultiChoice had abused its power of dominance in the market, saying since Nigeria operates a free market economy, their argument lacked merit. That was the FCCPC’s own tribunal.

It was hardly surprising that the claimants had their case dismissed. A little earlier the same year, Irukera, FCCPC’s Executive Vice Chairman at the time, explained the limitations of the FCCPC Act in an interview with Premium Times.

“Nigeria is a free market economy with only one limited provision in the FCCPC Act. It even allows the government to get involved in price. That is based on a lot of work, studies, research, a report and a recommendation to the president by the FCCPC for a limited time of controlling price in a specific sector, based on competition issues, not just increasing prices. Then, that decision when the president accepts the recommendation and adopts it, it will be gazetted. It will only be for a limited period of time. Other than that, we don’t regulate price,” he said.

In the same interview, he also explained that the only time a competition regulator intervenes in pricing is when a provider puts a price that seems below a reasonable cost.

“It’s called predatory pricing. It is not when the price is high that you can see this like a predator, preying on people. In competition analysis, it’s when you floor prices to push your competitors out of the market. That’s predatory pricing. We’re going to come and say no,” he explained.

I do not recall that that the FCCPC Act has undergone an amendment, which may have given it powers it did not previously have. Ordinarily, the FCCPC deserves commendation for expressing concern that Nigerians continue to face frequent price increases and that MultiChoice applies different pricing models in other markets. Let me go from back to front by responding first to the latter. I have heard this repeated so many times, including by members of the National Assembly, that gathering of phony sympathizers. The internet is always of great help. The pricing model, as I have found and as anyone would, is fixed subscription in all the jurisdictions MultiChoice operates. I challenge the FCCPC to go and verify, as we say.

Nigerians continue to face frequent price increases? Of course. But the only price increases the FCCPC is interested in are those of MultiChoice. Pharmaceutical companies as well as retailers, transporters, including Bolt, Uber and Lagos Metropolitan Transport Authority; airlines, telecommunication companies, bottling companies and private educational institutions at all levels have increased what they charge their customers every time the economic conditions make that demand.

Not one has been called by the FCCPC to explain why its prices have gone up. Are their consumers excluded from the commission’s protection? One cannot fault the FCCPC’s commitment to ensure that Brazilian Butt Lift and other cosmetic surgeries are well done, but it is never about the cost at which they are done. So, why is the same attitude not devoted to pay television where the FCCPC can demand a higher standard of service?

Is the FCCPC only concerned about women having comely behinds? It should tell us, so that we know we are dealing with “asstronauts”. The Federal Government, which the FCCPC pretends to represent in consumer matters, increased electricity tariffs shortly after removing fuel subsidy and devaluing the naira, with the last two the major contributors to the economic difficulties being experienced at this time. The government met fuel at N187 per litre. The price per litre eventually went beyond N1000 and only recently fell marginally below that. The FCCPC could not see how that could have caused disequilibrium. It has to invite only MultiChoice to explain that soaring inflation, and a 68% depreciation of the naira, especially over the last two years, have impacted operational costs in addition to escalating energy costs, higher taxes, and increased logistics and transportation expenses due to subsidy removal.

Last year, for example, NB Plc, increased the prices of its product three times. Not once was it invited to explain why. The FCCPC is living in cuckoo land if it thinks what it is doing makes any sense. I still expect the National Assembly to issue a similar summon and pass one of those self-important resolutions that MultiChoice should revert to old prices. A clown is a clown whether in a costume or in plainclothes.