Cracking Down on Big Tech: The Era of Record Penalties

The battle between regulators and big technology companies is intensifying, with fines now reaching eye-watering amounts that threaten to reshape the industry. From anti-trust violations to data privacy failures, the financial and reputational toll on tech giants is becoming impossible to ignore. In recent years, some of the world’s largest tech companies, including Google, Microsoft, and TikTok, have faced a wave of fines for a range of violations, from anti-trust issues to mishandling consumer data. These penalties, often running into billions of dollars or euros, reflect the growing scrutiny of the technology sector by regulators worldwide.

Nigeria’s tech crackdown: Paystack fined ₦250m for Zap 

Paystack, one of Nigeria’s leading fintech platforms, faces a heavy ₦250 million (approximately $190,000) fine from the Central Bank of Nigeria (CBN). The penalty stems from Paystack’s operation of Zap, its peer-to-peer payment app, which the bank flagged as a breach of regulatory approval.

The fine against Paystack stems from the operation of its popular app, Zap, which was launched in March 2025. Aimed at allowing consumers to send and receive money via mobile devices, Zap positioned itself as a digital wallet solution for Nigerians looking for seamless and accessible payment options. However, despite its widespread appeal, the app’s function has raised concerns with the CBN, which has flagged Zap as a deposit-taking product.

Only institutions holding microfinance or banking licenses in Nigeria are authorised to offer deposit-taking services. Yet, Paystack, which has a switching and processing license, is not permitted to hold customer funds under the terms of its regulatory approval. This discrepancy led to the ₦250 million fine.

According to sources familiar with the matter, Paystack’s regulatory limitations were at the heart of the CBN’s sanction. While Paystack does not directly hold customer funds, the app’s operation, which allows users to send and receive money, falls under the category of deposit-taking products. This means it must comply with the required licensing framework.

Furthermore, this fine comes amid an ongoing legal dispute between Paystack and Zap Africa, a Nigerian cryptocurrency startup that has accused Paystack of trademark infringement. While these legal challenges may be separate from the regulatory fine, they highlight the tensions that fintech companies face as they navigate Nigeria’s tightly regulated financial space.

How Zap operates: The regulatory grey area

Although Zap does not directly hold customer funds, it has partnered with Titan Trust Bank, a financial institution authorised to accept deposits. This partnership is essential to Zap’s functioning but has not been enough to shield Paystack from the CBN’s scrutiny. The CBN’s response reflects a growing emphasis on compliance within Nigeria’s digital financial landscape. As the country’s fintech industry expands rapidly, regulators are more vigilant about ensuring that businesses adhere to the legal framework governing financial transactions, particularly when it involves customer funds.

Meta’s $290m penalty: A parallel development

Meta has also faced a significant fine in Nigeria. Meta, the parent company of Facebook and Instagram, is facing mounting pressure from Nigerian authorities following a series of hefty fines totalling more than $290 million. This penalty comes after three major Nigerian regulatory agencies, including the Federal Competition and Consumer Protection Commission (FCCPC), the Advertising Regulatory Council of Nigeria (ARCON), and the Nigerian Data Protection Commission (NDPC), accused Meta of violating competition, advertising, and data protection laws.

In response to these sanctions, Meta has warned that it may be forced to suspend its services in Nigeria entirely. Facebook and Instagram are among the country’s most widely used social media platforms, with tens of millions of users, especially small business owners and entrepreneurs, relying on them for communication, marketing, and sales. However, Meta has expressed its frustration with what it deems “unrealistic” regulatory demands imposed by the Nigerian government.

The legal struggle and Meta’s warning

The fines, which were issued last July, stem from a variety of alleged offences. The FCCPC slapped Meta with a $220 million penalty for alleged anti-competitive practices. ARCON imposed a $37.5 million fine for running unapproved advertisements, while the NDPC levied a $32.8 million fine for breaching data privacy regulations. In a legal battle to overturn these fines, Meta’s efforts were dealt a blow when a Federal High Court in Abuja upheld the penalties.

According to court documents reviewed by the BBC, Meta has now publicly warned that it might have to shut down Facebook and Instagram in Nigeria to mitigate the risk of further enforcement actions. The company claims that the fines are excessive and damaging to its operations in the country, which has one of the largest user bases for its services in Africa. While Meta has not included WhatsApp in its list of potentially affected services, the company’s threat to suspend Facebook and Instagram is a significant blow to millions of Nigerian users. The court has given Meta until the end of June to resolve the fines. Failure to do so could result in the suspension of its platforms in the country, creating a ripple effect that would impact businesses, content creators, and everyday users who rely on Facebook and Instagram to stay connected and conduct business.

The impact on Nigerian users and businesses

Facebook and Instagram have become integral to daily life in Nigeria, especially among small business owners. Many use these platforms to reach customers, market products, and communicate with clients. A shutdown of these services would not only disrupt personal connections but also pose a significant challenge to the country’s digital economy. Nigerian small businesses, which often rely on social media for marketing and sales, could face a severe setback, as alternative platforms have not yet matched Facebook and Instagram’s reach and functionality.

Moreover, Meta’s potential departure from Nigeria would raise serious questions about the future of the country’s digital economy, particularly as local startups and entrepreneurs increasingly depend on global platforms for growth and innovation.

Meta’s corporate strategy: A global shift?

Meta’s threat to leave Nigeria is part of a larger trend in which global tech firms face increasing scrutiny from national governments and regulatory bodies. In response to rising concerns about market dominance, privacy issues, and competition, regulators worldwide are tightening their oversight of companies like Meta. However, Meta’s situation in Nigeria highlights the delicate balance between national sovereignty, consumer rights, and the operations of multinational corporations.

The fines and Meta’s potential exit could signal a shift in how other tech companies approach doing business in Nigeria and other emerging markets. As countries like Nigeria ramp up regulatory enforcement, foreign companies will likely have to reconsider their strategies for compliance, market engagement, and corporate social responsibility.

The growing cost of non-compliance

Tech firms are increasingly under scrutiny for their handling of user data, business practices, and broader impact on society. As noted by Cullen International, a global regulatory research firm, major companies like Google and Microsoft have faced substantial fines for anti-competitive practices and mishandling user information. US-based big tech companies have faced some of the most substantial fines ever handed down by European competition regulators, according to the research firm.

“The European Commission has imposed record anti-trust penalties, with Google being fined more than €8 billion and Microsoft over €2 billion in total. In 2024, Apple and Meta were hit with their first EU anti-trust fines, amounting to €1.8 billion and €800 million, respectively,” stated the research firm.

As the digital economy continues to expand, Nigeria’s regulators appear determined to protect consumers and maintain a level playing field for local businesses. These fines send a clear message: companies must comply with local laws or face the consequences.

Impact on Nigeria’s tech ecosystem

For Nigeria’s burgeoning tech ecosystem, these fines are both a challenge and an opportunity. On one hand, they signal that the government is serious about regulating the sector, which could create a more stable and predictable environment for businesses. On the other hand, they could deter foreign investment as companies weigh the risks of non-compliance in a rapidly evolving regulatory landscape.

Nevertheless, experts agree that these fines are necessary to ensure that Nigeria’s digital economy matures in a way that benefits both consumers and businesses. As Paystack and Meta navigate their respective fines, other companies in the region will undoubtedly take note of the growing regulatory scrutiny. The hope is that this heightened focus on compliance will lead to a healthier digital ecosystem for Nigeria’s tech future.

The fines against the tech firms’ ongoing legal challenges signal a future where tech companies operating in Nigeria can expect a more challenging regulatory landscape. For fintech firms like Paystack, understanding and adhering to local regulations will become even more critical to their success.

In the meantime, Paystack’s ₦250 million fine and Meta’s $290 million penalty highlight a larger trend in which tech companies are being held accountable for their actions. With governments increasingly taking a hardline approach, the stakes have never been higher for global tech giants.