Federal High Court Nullifies ₦60 Billion ARCON Fine on Facebook Nigeria, Rules Regulator Exceeded Legal Powers
The Federal High Court in Lagos has struck down the ₦60 billion penalty imposed on Facebook Nigeria Operations Limited by the Advertising Regulatory Council of Nigeria (ARCON), ruling that the regulator exceeded its legal authority and violated the company’s constitutional right to a fair hearing.
In a landmark judgment delivered by Justice Yellim Bogoro in Suit No. FHC/L/CS/2205/2024, the court declared ARCON’s Notice of Violation and Demand for Compliance, dated October 21, 2024, unconstitutional, unlawful, and void. The court also issued a perpetual injunction preventing the regulator from taking any further action to enforce the notice.
Justice Bogoro held that ARCON does not have the statutory power under the Advertising Regulatory Council of Nigeria Act, 2022, to impose financial penalties for alleged criminal violations without first obtaining a conviction from a court or another competent tribunal.
The dispute began after ARCON accused Facebook Nigeria of allowing advertisements to be displayed on Facebook and Instagram to Nigerian users without prior approval from the Advertising Standards Panel, as required by the ARCON Act and the Nigerian Code of Advertising. The regulator subsequently ordered the company to stop displaying the adverts immediately and demanded payment of a ₦60 billion penalty for what it described as repeated violations.
Represented by Senior Advocate of Nigeria Mofesomo Tayo-Oyetibo, Facebook Nigeria challenged the notice, arguing that ARCON lacked the legal authority to determine criminal liability or impose punitive sanctions through an administrative process without first giving the company an opportunity to defend itself.
The company also maintained that it neither owns nor operates Facebook or Instagram, explaining that both platforms are owned and controlled by Meta Platforms Inc., a separate foreign corporation.
ARCON, through its counsel Akinlolu Kehinde, SAN, argued that Facebook Nigeria serves as Meta’s representative in Nigeria and should therefore be held accountable for regulatory violations linked to advertisements displayed on the platforms. The regulator further claimed that its notice was merely a compliance directive, giving the company the option to comply, pay the violation fee, or face prosecution.
The court rejected those arguments.
Justice Bogoro ruled that Facebook Nigeria is a separate legal entity from Meta Platforms Inc. and found that ARCON failed to provide sufficient evidence proving that the Nigerian company owns, operates, or controls Facebook and Instagram. The judge stated that merely asserting the company represents Meta’s interests in Nigeria was insufficient to establish liability.
The court also found that ARCON breached Section 36 of the 1999 Constitution by accusing Facebook Nigeria of wrongdoing and simultaneously imposing a massive financial sanction without first granting the company a fair hearing. Justice Bogoro noted that Section 57(4) of the ARCON Act specifically requires the regulator to hear the accused party before imposing any penalty.
In addition, the judge ruled that the alleged violations cited by ARCON were criminal in nature because Section 34 of the Act classifies such conduct as an offence. Since the law provides that punishment can only follow upon conviction, the court held that ARCON had no legal authority to impose the ₦60 billion penalty through an administrative notice.
Justice Bogoro further emphasized that, regardless of how ARCON described the payment, the ₦60 billion demand was effectively a fine, and only a court of competent jurisdiction has the power to impose such a sanction after due judicial proceedings.
As a result, the court declared ARCON’s Notice of Violation and Demand for Compliance unconstitutional, unlawful, and beyond the regulator’s statutory powers. It also ruled that ARCON cannot impose fines for alleged violations of Sections 34(3), 54, or any other criminal provisions of the ARCON Act without a court conviction.
The court set aside the notice in its entirety and permanently restrained ARCON, its officers, agents, and representatives from taking any further steps to enforce the October 21, 2024 notice against Facebook Nigeria.
The judgment is expected to have far-reaching implications for Nigeria’s digital advertising industry, as it clearly defines the limits of regulatory agencies’ enforcement powers and reaffirms that criminal sanctions can only be imposed through due process in a court of law.
