LAGOS — The Federal High Court in Lagos has nullified the N60 billion penalty imposed by the Advertising Regulatory Council of Nigeria (ARCON) on Facebook Nigeria Operations Limited, holding that the regulator exceeded its statutory powers and breached the company’s constitutional right to fair hearing.
Justice Yellim Bogoro, who delivered judgment in Suit No. FHC/L/CS/2205/2024, declared ARCON’s Notice of Violation and Demand for Compliance dated October 21, 2024, unconstitutional, unlawful, and of no legal effect. The court also restrained the agency from taking further steps to enforce the sanction.
The dispute arose after ARCON accused Facebook Nigeria of allowing advertisements to be displayed on Facebook and Instagram to Nigerian audiences without obtaining prior approval from the Advertising Standards Panel, as required under the Advertising Regulatory Council of Nigeria Act, 2022.
The regulator subsequently directed the company to halt the advertisements and imposed a N60 billion penalty for what it described as repeated regulatory violations.
Facebook Nigeria challenged the sanction, arguing that the regulator 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 by Meta Platforms Inc., a separate corporate entity.
In response, ARCON argued that Facebook Nigeria represents Meta’s operations in Nigeria and should therefore bear responsibility for regulatory compliance relating to advertisements displayed on the social media platforms.
However, Justice Bogoro rejected that argument, holding that Facebook Nigeria and Meta Platforms Inc. are separate legal entities.
The court ruled that ARCON failed to establish that Facebook Nigeria owns, manages, or exercises control over Facebook or Instagram. According to the judgment, the regulator did not provide sufficient evidence to justify holding the Nigerian company liable for the alleged breaches.
Justice Bogoro further held that the regulator violated the company’s right to fair hearing guaranteed under Section 36 of the 1999 Constitution by issuing allegations and imposing a substantial financial penalty without first giving Facebook Nigeria an opportunity to respond.
The court observed that Section 57(4) of the ARCON Act requires the regulator to accord an alleged violator a fair hearing before imposing any sanction.
On the issue of ARCON’s enforcement powers, the judge held that the alleged offences under the Act are criminal in nature and that any punishment can only follow a conviction by a court of competent jurisdiction.
According to the judgment, ARCON lacks the statutory authority to impose criminal fines through administrative notices, regardless of how such sanctions are described.
Justice Bogoro consequently set aside the notice issued by the regulator and granted a perpetual injunction restraining ARCON, its officials, agents, and representatives from enforcing the disputed penalty against Facebook Nigeria.
Legal analysts say the judgment is expected to influence the regulation of digital advertising in Nigeria by clarifying the scope of regulatory powers and reinforcing the constitutional requirement that criminal sanctions can only be imposed through due judicial process.
