The federal high court in Lagos has ruled that the Advertising Regulatory Council of Nigeria (ARCON) acted outside its statutory powers in imposing a N60 billion fine on Facebook Nigeria.
The presiding judge, Yellim Bogoro, nullified the N60 billion fine imposed by ARCON on Facebook Nigeria over alleged unapproved advertisements targeted at the Nigerian market.
In a judgement delivered on June 18, Bogoro ruled that ARCON’s notice of violation and demand for compliance dated October 21, 2024, was unconstitutional, unlawful, null and void.
ARCON had accused Facebook Nigeria of exposing advertisements on Facebook and Instagram to the Nigerian market without obtaining prior approval from the advertising standards panel, contrary to the ARCON Act and the Nigerian Code of Advertising.
The regulator, in the notice, directed the tech platform to immediately stop displaying unapproved advertisements to Nigerian audiences and demanded payment of N60 billion for what it described as repeated violations.
Aggrieved by the notice, Facebook Nigeria, through its counsel, Mofesomo Tayo-Oyetibo, senior advocate of Nigeria (SAN), challenged the decision and insisted that ARCON had no legal authority to determine criminal liability or impose punitive sanctions through an administrative notice without first affording the company a fair hearing.
Facebook Nigeria also argued that it neither owns nor operates Facebook or Instagram, contending that both platforms are owned and controlled by Meta Platforms Inc., a separate foreign corporate entity.
Akinlolu Kehinde, the counsel to ARCON, argued that Facebook Nigeria represents Meta’s operations in Nigeria and should therefore bear responsibility for regulatory breaches relating to advertisements displayed on the platforms.
ARCON maintained that the notice was merely a regulatory compliance measure and that the tech company could either comply with its directives, pay the prescribed violation fee or face prosecution.
Bogoro held that Facebook Nigeria is a distinct legal entity from Meta Platforms Inc. and ruled that ARCON failed to produce sufficient evidence establishing that the Nigerian company owns, operates or controls Facebook or Instagram.
The judge ruled that mere assertions that Facebook Nigeria represents Meta’s interests in Nigeria were insufficient to impose liability for the alleged advertising infractions.
The judge said ARCON violated section 36 of the Constitution by making allegations and simultaneously imposing a substantial financial sanction without first giving the company an opportunity to respond.
Bogoro further held that section 57(4) of the ARCON Act expressly requires the regulator to accord any alleged violator a fair hearing before imposing any penalty.
He also found that the alleged breaches relied upon by ARCON were criminal in nature because section 34 of the ARCON Act provides that exposing advertisements in contravention of the act constitutes an offence.
The judge held that since the Act stipulates that punishment may only follow “upon conviction,” ARCON lacked the authority to impose the N60 billion penalty through an administrative process.
He ruled that, despite the explanation of ARCON, the N60 billion demand was, in substance, a fine that only a court of competent jurisdiction could impose after due judicial proceedings.
Bogoro also declared that ARCON has no authority to impose fines for alleged violations of sections 34(3) and 54, or any other criminal provisions of the ARCON Act.
“It will be seen here that the alleged breaches under the ARCON Act are offences, and the N60,000,000,000.00 (sixty billion naira) is clearly punitive, not merely regulatory; as such, this requires judicial process,” the judge ruled.
“The defendant therefore lacks power to impose such a fine, and the act constitutes a usurpation of judicial authority.”
He nullified the notice and granted a perpetual injunction restraining ARCON, its officers, agents and privies from taking any further steps to enforce the October 21, 2024, notice against Facebook Nigeria.