The Federal Competition and Consumer Protection Commission announced on Tuesday that it would soon start enforcing legislation across the country to stop trade associations from participating in price-fixing and cartel-like behaviour.
The Commission claimed that this action would begin with the group of PoS agents, who recently announced an increase in transaction fees.
This was revealed by the executive vice chairman and chief executive officer of the FCCPC, Mr. Babatunde Irukera, in Lagos at a workshop on fair food prices in Nigeria that was jointly conducted by Consumers International and the FCCPC.
Although trade groups are crucial to enterprises and the welfare of society, according to him, the law places restrictions on what they may do.
“The trade associations, in many ways, have organized themselves into cartels, and those cartels are illegal,” said Irukera.
“They constitute cartels that regulate a variety of factors, including prices, whether at input levels like the supply of fertiliser or market trade groups. That is wrong in addition to breaking the law. Trade associations play an important role in society and in business, but there are some restrictions on what they can do.
“I can see the historical context for the significance of trade associations now. They are crucial for gathering association members, bringing experts together for training, and discussing standards and what is best for their company, but they should never be used to negotiate pricing or limit supply and demand.
“You can set new prices on an individual basis and provide your services for a price that you feel is reasonable and lucrative for your company. However, it is impossible to plan ahead, make secret plans, or come to an agreement on a price.”
He gave his word that the FCCPC would keep up the lobbying work that is necessary for associations to understand that they should support commerce rather than disrupt markets.
However, in addition to advocacy, he continued, “We must also use enforcement techniques, and we must have the strength to use enforcement against ourselves, even when the targets of the enforcement are some of the small guys.”
Irukera claimed that FCCPC will soon start taking enforcement action against the group of PoS operators that want to raise their prices.
“Recently, a Nigerian association of PoS operators announced that they would be raising their prices,” he said.
“We will take legal action against the association, and sadly, we will take legal action against any minor members of the association who abide by its declarations as well.
He added that the FCCPC will also make sure banks don’t offer merchant services to people who engage in behaviour that has been ruled illegal.
