Court Ruling Casts Doubt Over Legal Status of Five Firms Approved Under FCCPC’s DEON Rules

Wale Igbintade

The Federal High Court in Lagos has cast fresh doubt on the legal status of five firms approved by the Federal Competition and Consumer Protection Commission (FCCPC) to provide airtime and data-credit services under its Digital, Electronic, Online or Non-traditional Consumer Lending (DEON) Regulations following a ruling that the Commission lacks the power to issue telecommunications licences.

Justice Ambrose Lewis-Allagoa, who delivered judgment on Monday in Suit No. FHC/L/CS/760/2026, however, upheld the FCCPC’s powers to regulate Nigeria’s consumer lending and competition landscape, affirming the validity of the DEON Regulations while drawing a clear distinction between regulatory oversight and licensing authority.

The judgement reaffirmed the legal principle that regulations cannot supersede Acts of Parliament, the court held that the DEON Regulations remain lawful because they derive their authority from the FCCPA

The judge held that Sections 104, 105, 106 and 163 of the Federal Competition and Consumer Protection Act empower the FCCPC to investigate anti-competitive conduct, protect consumers and make regulations.

Consequently, the court dismissed the suit filed by the Wireless Application Service Providers Association of Nigeria (WASPAN), which had challenged the legality of the DEON Regulations.

Despite upholding the regulations, the court ruled that the FCCPC has no statutory authority to issue telecommunications licences, stressing that nothing contained in the DEON Regulations creates a telecom licensing regime.

The judgement reaffirmed that the Nigerian Communications Commission (NCC) remains the sole statutory authority responsible for licensing operators in the telecommunications sector.

The ruling has now shifted attention to the legal basis of the approvals earlier granted by the FCCPC to five firms under the DEON framework, with industry stakeholders questioning whether those approvals can stand in light of the court’s pronouncement.

Reacting to the judgment, lawyer and public policy commentator, Ilemona Onoja, said the decision clearly distinguished between regulatory powers and licensing authority.

According to him, while the FCCPC is empowered to regulate market conduct and protect consumers, it cannot issue licences to operators, as that responsibility exclusively rests with the NCC.

He said the judgment inevitably raises questions about the legal foundation of the approvals granted by the FCCPC under the DEON framework if the Commission lacks licensing powers.

WASPAN also maintained that the court’s decision vindicated one of its principal arguments in the litigation.

In a statement signed by its Chairman for Regulatory and Partnership, Osa Umweni, the association said the FCCPC’s public statement on the judgment failed to highlight what it described as the court’s critical finding that the Commission lacks the power to issue telecommunications licences.

Umweni said the finding validated WASPAN’s position that the FCCPC had exceeded its statutory mandate and that the NCC remains the primary regulator of telecommunications operators.

He further disclosed that the association was reviewing the full judgment with its counsel, Senior Advocate of Nigeria, Kemi Pinheiro, and the legal team at Pinheiro LP to determine its next line of action, including the possibility of an appeal.

WASPAN also pointed out that the court dismissed the FCCPC’s preliminary objection challenging the competence of the suit, holding that the association had served a valid pre-action notice, disclosed a reasonable cause of action and approached the court with a genuine grievance.

The association further disputed the FCCPC’s claim that it voluntarily complied with the interim injunction granted by the court in April 2026, noting that the Commission had publicly described WASPAN and its members as a “desperate cartel” two days after the restraining order was issued.

Also reacting, the Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), Gbenga Adebayo, described the judgement as providing much-needed regulatory clarity.

According to him, the court confirmed both the FCCPC’s regulatory authority and the NCC’s licensing powers, thereby reinforcing the principle of concurrent regulation without undermining the statutory responsibilities of either agency.

Adebayo urged both regulators to establish a clear coordination framework and engage industry stakeholders before taking enforcement actions that could disrupt services, recalling that airtime credit services were suspended for three months earlier this year following regulatory directives before eventually being restored.

He noted that about 40 million Nigerians rely on airtime and data-credit services and stressed the need for certainty in the regulation of the sector.

He also reminded regulators that the Presidential Enabling Business Environment Council’s directive of April 6, 2026, requiring Regulatory Impact Assessments before major regulatory changes, remains applicable.

The judgment is expected to shape future regulatory oversight of Nigeria’s airtime and data-credit market, estimated to be worth between N300 billion and N400 billion annually, as stakeholders await further clarity on the status of firms approved under the FCCPC’s DEON framework.