LAGOS — The Federal High Court in Lagos has nullified the N60 billion sanction imposed on Facebook Nigeria Operations Limited by the Advertising Regulatory Council of Nigeria (ARCON), ruling that the regulator acted outside the powers granted to it by law and violated the company’s right to fair hearing.
In a 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, invalid and unenforceable.
The court also granted a perpetual injunction restraining the regulatory agency from taking further steps to enforce the disputed sanction against Facebook Nigeria.
The case stemmed from allegations by ARCON that advertisements displayed on Facebook and Instagram were targeted at Nigerian audiences without obtaining prior approval from the Advertising Standards Panel, contrary to the provisions of the Advertising Regulatory Council of Nigeria Act, 2022.
Based on the alleged infractions, the regulator directed Facebook Nigeria to discontinue the advertisements and imposed a N60 billion penalty.
Dissatisfied with the action, Facebook Nigeria approached the court, arguing that ARCON lacked the legal authority to impose what it described as a punitive sanction without first giving the company an opportunity to defend itself.
The company also contended that it neither owns nor operates Facebook or Instagram, maintaining that both platforms are owned and controlled by Meta Platforms Inc., a separate corporate entity.
ARCON, however, argued that Facebook Nigeria represents Meta’s business interests within Nigeria and should therefore be held accountable for alleged breaches involving advertisements displayed on the platforms.
In resolving the dispute, Justice Bogoro held that the regulator failed to establish any legal basis for treating Facebook Nigeria and Meta Platforms Inc. as the same corporate entity.
The judge ruled that there was no sufficient evidence showing that Facebook Nigeria owns, controls, or manages the Facebook and Instagram platforms, adding that the regulator’s assertions alone were inadequate to establish liability.
The court further held that ARCON breached the constitutional principle of fair hearing by imposing a substantial financial penalty without first allowing the company to respond to the allegations.
Justice Bogoro also held that the offences relied upon by the regulator under the ARCON Act are criminal in nature and that any sanction for such offences can only be imposed after a conviction by a court of competent jurisdiction.
Accordingly, the court ruled that ARCON has no statutory authority to impose criminal fines through an administrative notice and declared the N60 billion penalty unlawful.
The judgment is expected to serve as an important judicial interpretation of the limits of regulatory authority in Nigeria, particularly in relation to digital advertising and the enforcement of statutory sanctions.
Legal observers say the decision reinforces the constitutional requirement that regulatory agencies must observe due process and fair hearing before taking enforcement actions capable of affecting the rights and obligations of individuals or corporate entities.