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C OMPETITION LAW IN NIGERIA Daniel Bwala. Background There is no specific Competition law in Nigeria at the moment. However there are laws or rules in.

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Presentation on theme: "C OMPETITION LAW IN NIGERIA Daniel Bwala. Background There is no specific Competition law in Nigeria at the moment. However there are laws or rules in."— Presentation transcript:


2 Background There is no specific Competition law in Nigeria at the moment. However there are laws or rules in different government legislations that incorporate competition laws. Competition law in Nigeria is a common thread shared by the concepts of liberalization, deregulation and privatization. The privatization policy actually lists competition as one of its objective. Nothing however exists in that law that creates a framework for competition

3 Background Cont. We have government regulations and regulatory bodies task with responsibilities relating to competition law, to wit; Public Enterprises (Privatisation & Commercialisation) Act1999. The Act created National Council of Privatisation (NCP) as well as Bureau of Public Enterprises (BPE) Foreign Exchange (Monitoring and Miscelenous Provisions) Decree 1995. Nigerian Communications Act 2003 created NCC. Petroleum Industry Bill 2012

4 Background Cont. However, in Nigeria, in June 2001, the Competition and Anti-trust reform committee was inaugurated to work with the Bureau of Public Enterprises in formulating a competition policy for Nigeria. In the exercise of its duties, this committee came up with a draft Competition Bill which has since been presented to the Nigerian Senate as a bill to be passed to into law. The Federal Competition Bill, is made up of 91 sections, has as its object, the regulation of competitive activity in every sector of the Nigerian economy. The main thrust of the bill is the creation of a competition regulator empowered to punish anti-competitive practices, regulate mergers, take-over and acquisitions and to protect regulated industries in every sector and location in Nigeria.

5 Nigeria’s Federal Competition Bill The Bill consists of 10 parts as follows; Part i- consists of sections 1-14 dealing with the establishment of the Competition Commission and other ancillaries Part ii- consists of sections 15-17 and deals with the general provision of the bill. Part iii- consists of sections 18-24 and deals with contract arrangements and restrictive practices substantially lessening competition. Part iv-consists of sections 25-28 and deals with abuse of dominant position of market power Part v- consists of sections 29-33 and deals with mergers, takeovers and acquisitions. Part vi-consists of sections 34-37 and it deals with regulation of prices. Part vii- consists of sections 38-56 and deals with authorizations and clearances. Part viii- consists of sections 57-58 and deals with provisions relating to regulated industries. Part ix- consists of sections 59-74 and deals with enforcements, remedies and appeals.

6 Cont. Part x- consists of sections 75-91 and deals with miscellaneous provisions Finally, the schedules provide for professional associations (pursuant to section 16(b) of the Bill)

7 Key features of the Bill Territorial scope S.15 provides to the effect that the Bill will affect anti-trust conducts of person(s) or bodies within or outside Nigeria in so far as such conduct(s) affects Nigerian market S. 15(2) makes reference to s. 29 of the Bill to include conduct relating to mergers and acquisitions of Nigerian shares or assets by foreign companies whether they are resident in Nigeria or not Note: This is also consistent with the US Competition laws. Unclear whether it follows the EU and UK relevant laws

8 Cont. Undertaking The Bill will also bind public or private or public-private participation in trade or commercial activities. S.16 Incorporation of other legislations that prohibit unfair practices Such as in Intellectual property protection as well as the formation and operation of companies under CAMA. S17 Anti-trust stipulations in contract as well as exclusionary provisions. The bill also voids contract stipulation that either restricts competition or excludes competition. Whether the contract was agreed before the commencement of the Bill. And the tests are thus; “If the contract, output or production; allocation of territory or division of market; collusive tendering; or denial of access to market”. S 18 and 19

9 Cont. Price-fixing, discounts, rebates, allowances, subsidies or credits The bill prohibits the above acts in relation to goods or services that are supplied or acquired by parties to a contract or their competing counterparts. S. 20 Note: The Bill exempt partnership(s) that is non body corporate and refer intellectual property rights to Copy Right Act, 1990; Patent and Designs Act 1990 and Trade Mark Act 1990. It also exempts transactions in relation to business assets and shares. The Bill also grants an exemption with grace period of 18 months for pre-existing contracts that were executed or arrived. S 21-23 Penalty for violation is 1 yr imprisonment or 1M fine or both.

10 Cont. Abuse of dominant position in a market Abuse of dominant position in a market is prohibited and the abuse is qualified as; restricting the entry of any person into the market; restricting the entry of any person in competition with the dominant firm into any market; preventing or deterring any person from engaging in competitive conduct in that market; or eliminating any person from that market. S. 25 Other restrictions are thus; Resale price maintenance. S26 Withholding or preventing the supply of goods. S. 27 Penalty for violation is 2 yrs imprisonment or 2M fine or both. S.28

11 Cont. Mergers, Takeovers and Acquisitions Mergers, takeovers and acquisition is also prohibited if it results in exercise of dominant position in the market. S. 29. Penalty for violation is 3 yrs. imprisonment for or a fine of 3M or both. S.30 (1)(2) and (3) Regulation of Prices The Law provides for govt. regulation of prices in the interest of consumers and market competition. S. 34. Authorisations and clearances. With respect to contracts, arrangements and restrictive practice substantially lessen competition. S. 38 Permission to apply S.18-contract restrictive stipulations. S.26-resale price maintainance. S.29-certain mergers, acquisitions and takeovers Enforcements, Remedies, and Appeals Complaints are lodged with the commission who will deal with the case administratively. S. 60 Application for review of the decision of the commission is filed before the FHC. S.63



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