Answer ... While the Federal Competition and Consumer Protection Act does not expressly define ‘abuse of dominance’, the act does provide a list of specific conduct by an undertaking in a dominant position which constitutes an abuse of dominance. A firm will possess a dominant position in the market where it can:
- prevent effective competition in the relevant market; and
- behave appreciably independently of its competitors, customers and consumers.
Importantly, firms which are dominant will be shown to have abused their dominance only where they engage in any of the conduct prohibited specifically set out in the act.
Answer ... The Federal Competition and Consumer Protection Act provides for the following specific types of conduct which constitute an abuse of dominance:
- charging excessive prices; and
- refusing access to a competitor of an essential facility where it is economically feasible to grant access.
Furthermore, unless a firm can show technological efficiency or other pro-competitive gains outweighing the anti-competitive effect of any of the following acts, the act will constitute an abuse of dominance:
- requiring or inducing a supplier or customer not to deal with a competitor;
- refusing to supply scarce goods to a competitor when supplying those goods would be economically feasible;
- selling goods or services on condition that the buyer purchases separate goods or services unrelated to the object of a contract, or forcing a buyer to accept a condition unrelated to the object of a contract;
- selling goods or services below their marginal or average cost; or
- buying up a scarce supply of intermediate goods or resources required by a competitor.
Answer ... A consumer may file a complaint alleging that an undertaking has embarked on activities in contravention of the Federal Competition and Consumer Protection Act. The Federal Competition and Consumer Protection Commission (FCCPC) may also self-initiate complaints on its own volition or following concerns from industry sector regulators or an accredited consumer protection group.
Answer ... In conducting investigations, the FCCPC is empowered to:
- summon and examine witnesses;
- call for and examine documents;
- administer oaths;
- require documentation submitted to it to be verified by affidavit;
- require the furnishing of returns or information as it may require; and
- adjourn any investigation.
Furthermore, the FCCPC is empowered to enter and search any premises, and inspect and remove from premises any article, document or extract in the possession or control of any person, if it believes that an undertaking has engaged, is engaging in or is likely to engage in conduct in contravention of the Federal Competition and Consumer Protection Act. Notably, the FCCPC must obtain a warrant from a judge in order to conduct such investigation.
Following an investigation, the FCCPC has the power to:
- issue a notice of non-referral to the complainant; and
- make an order or issue a compliance order to the relevant undertaking acting in contravention of the act.
Answer ... Third parties may file a complaint with the FCCPC in order to bring a potential abuse of dominance to the FCCPC’s attention. In this regard, it is important that the complainant first engages the target firm. Thereafter, a complaint may be filed with the FCCPC. Complaints may be delivered in hard copy or through the FCCPC’s website portal or by email.
The Draft Regulations on Abuse of Dominance provide for third-party participation in the following ways:
- The FCCPC may gather information through its investigation into abusive conduct by requesting information from appropriate third parties; and
- Through oral hearings with the concerned undertaking and relevant third parties, the FCCPC may hear evidence in furtherance of the undertaking’s rights of defence.
Furthermore, accredited consumer protection groups can commence or undertake an act to protect consumer interests in any manner of forum contemplated by the Federal Competition and Consumer Protection Act. Accredited consumer protection groups are also entitled to intervene in any matter before any forum contemplated by the act where consumer interests represented by such group are not otherwise adequately represented in the forum.
Answer ... Rights of the enforcement authority: See question 3.4.
The Draft Regulations on Abuse of Dominance provide the FCCPC with the right to request information and documents from the undertaking which may be required for its investigations. In doing so, the FCCPC may gather information through:
- requests for further information or clarification from the undertaking concerned;
- requests for further information from competitors, suppliers, customers and/or any other relevant third parties;
- the undertaking’s internal documents or economic data;
- company inspections; and/or
- witness interviews conducted during the investigation process.
Obligations of the enforcement authority: The Federal Competition and Consumer Protection Act provides that upon finding that an undertaking has abused its dominant position, the FCCPC will:
- prepare a report which outlines the abuse;
- inform the undertaking of the FCCPC’s findings and provide the undertaking with a copy of the report; and
- direct the undertaking to immediately cease the abusive practice.
The above provisions are not applicable to exclusive dealing arrangements or market restrictions between or among affiliated or interconnected undertakings.
The FCCPC is obliged to obtain a warrant in order to exercise its power to enter and search premises, and to inspect and remove items from such premises. The warrant must be obtained from a judge of the Court of Appeal and will be granted where the judge is satisfied that reasonable grounds exist that an undertaking has engaged or is likely to engage in conduct in contravention of the act.
Answer ... Obligations of target company and targeted individuals: It is an offence for persons, without sufficient cause, to:
- fail or refuse to appear before the FCCPC in compliance with a summons;
- fail or refuse to produce a document required by the summons; or
- wilfully obstruct or interrupt the proceedings of the FCCPC.
Persons who destroy any record required by the FCCPC for investigations with the intent to mislead the FCCPC or to prevent or impede the FCCPC’s investigation will be guilty of a criminal offence.
An individual who impedes, prevents or obstructs any investigation by the FCCPC will be guilty of an offence.
Furthermore, undertakings and individuals who knowingly provide the FCCPC with false or misleading information commit an offence and will be guilty of an offence and liable to imprisonment, a fine or both. Where persons who have been required to appear before the FCCPC do not do so without reasonable excuse or refuse to take an oath, make an affirmation as a witness or answer a question put to them, they will be guilty of an offence.
Answer ... The FCCPC will first assess whether the firm is dominant in accordance with the provisions of the Federal Competition and Consumer Protection Act. Thereafter, the FCCPC will assess whether the dominant firm engaged in any of the conduct listed in the act. The FCCPC will then consider whether the conduct allows for any technological, efficiency or pro-competitive gains to outweigh the effect of the abusive conduct.
Answer ... The FCCPC may provide settlement options to a firm that complies with the Investigative Cooperation/Assistance Rules & Procedures, 2021 (ICARP). In this regard, the firm must:
- accept liability and admit guilt;
- make full disclosure of its conduct and provide the FCCPC with all relevant facts and information;
- cease the conduct in violation of the Federal Competition and Consumer Protection Act;
- provide continuous and full cooperation with the FCCPC; and
- not tamper with evidence relevant to the investigation.