MultiChoice price increase and CPC’s Soviet-style price control

MultiChoice price increase and CPC’s Soviet-style price control

Monday, August 27, 2018 8:59 am




Earlier this week, while trawling through Twitter (a platform I hardly use), I stumbled on a news item marked “Breaking News”. The headline read: “Court Halts MultiChoice’s Hike in DStv Subscription Rates”. It was a report on an interim injunction granted by Justice Nnamdi Dimgba of the Federal High Court, Abuja, restraining MultiChoice from implementing new rates that came into effect on 1 August.

The matter was instituted by the Consumer Protection Council (CPC). Technically, the Council is the defender of consumer rights in the country. Actually, though, it is anything but. Electricity consumers in the country, for example, remain victims of lengthy power outages, grotesquely inflated bills issued by power distribution companies for electricity not consumed and disconnection without notice.

Users of data and mobile telephony services are also unlikely to jump for joy at the mention of CPC. These are just three of the numerous categories of consumers, whose rights are abridged for fun by service providers. But for logically obscure reasons, the Council’s attention is elsewhere. As a consumer of a variety of products and services, I am all for protection of rights.

However, I find it curious that the CPC is always on MultiChoice and now thinks it has the power to determine when the prices charged for its services should be increased or reduced, as shown by the suit filed against MultiChoice. The Council’s Director-General (DG), Babatunde Irukera, was all over Twitter-egged on by a suspiciously hired mob of users-making out as though he just won us the right to vote. When other users pointed out that the CPC cannot determine prices and that price control is antithetical in a market economy, his tune changed.

In a two-page statement he issued on Tuesday, the DG stated that the Council does “not intend to regulate price or in any way interfere with the commercial interface between MultiChoice and its consumers in fixing price”, adding that it “recognizes and respects the fidelity in the operation of market forces in arriving at the prices of goods or services”.

I can draw no reassurance from this. I am interested in what the CPC asked for in court if its objective was not to control prices Soviet-style. As hard as he tried to say otherwise, it was obvious that a transplant of Hugo Chavez’s Venezuela to Nigeria is the aim. I have seen the CPC Act and it does not give power to the Council to determine when prices should be raised or lowered.

But we have been here before. Two years ago, the Senate, in an alleged show of “moral courage” via an idea conceived by Senator Isah Missau, said it was investigating complaints, petitions and litigations by subscribers angry with MultiChoice’s programming and subscription hikes.

Misau argued that the motion was of public interest because many football fans in the country, especially Premier League (PL) fans, have been left at the mercy of MultiChoice, which exclusively owns broadcast rights in the country. Misau accused MultiChoice of arbitrary hikes in subscription and refusal to adopt the pay-as-you-use method, which he claimed is in operation in other jurisdictions where MultiChoice operates.

“Many concerned Nigerians are aggrieved and in constant demand to stop DStv’s arbitrary price hikes, noting that recent increase in DStv subscription is outrageous and totally unacceptable,” Misau raged.

The Senate summoned Mr. Emeka Enelamah, Minister of Industries, Trade and Investment; heads of National Broadcasting Commission (NBC) and the Consumer Protection Council (CPC) and directed its Committee on Information to hold a public hearing for all stakeholders, including the civil society on how to protect subscribers from exploitation.

“We must play our role to ensure that we protect Nigerians and ensure that the best global practices are happening in our own country. So, I would want the committees, as directed, to look into the matter, particularly to ensure that the CPC plays the role they (sic) should play in ensuring that the rights of Nigerians are always protected,” said the Senate President, Dr. Bukola Saraki.

The CPC carried out an investigation and after completion, addressed a joint press conference with MultiChoice. Reports from the press conference quoted Mrs. Dupe Atoki, the then CPC DG, as saying: “The mandate of the Council is to ensure that consumer’s rights and interests are protected. The CPC has been working with MultiChoice Nigeria in achieving this and we are confident that the issues have been addressed.”

Interestingly, the current CPC DG was the counsel to the Council at the time. Why another investigation so soon if it is not agenda-driven? I am also not aware that a company must suspend all activities around pricing while it is being investigated. The CPC claimed MultiChoice agreed to freeze prices for 24 months, but breached the agreement. I have no knowledge of what the agreement contained, but I wonder if any business would agree to such, given the way the market works.

A year before that, a suit by two lawyers seeking a reversal of price increase by MultiChoice resulted in the litigants being told by the court, while dismissing it, that they were not obliged to use MultiChoice’s services.

CPC’s claim that the pay-as-you-use model obtains in other countries where MultiChoice operates is an invention. The model is available on Video-On-Demand services such as Netflix. An internet search would have shown that Pay TV packages are bundled to make them affordable. MultiChoice is the dominant player in the industry, but it is not the only Pay TV operator and has never been. The defunct HiTV, for three years, was the sole broadcaster of Premier League in the country. There was a reason it could no longer continue operating. Perhaps, the CPC wants MultiChoice dead. For what reason, I cannot claim to know.

Medupin writes from Abuja.

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