By Peace Erewunmi

A Federal High Court sitting in Lagos has nullified the ₦60 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 under the law.

Delivering judgment, Justice Yellim Bogoro held that ARCON’s Notice of Violation and Demand for Compliance dated October 21, 2024, was unconstitutional, unlawful, null and void. The judge also restrained the council from taking any further steps to enforce the sanction against Facebook Nigeria.

The dispute began after ARCON accused Facebook Nigeria of displaying advertisements on Facebook and Instagram to Nigerian audiences without obtaining prior approval from the Advertising Standards Panel, contrary to provisions of the ARCON Act and the Nigerian Code of Advertising. Based on the alleged violations, the regulator directed the company to stop the advertisements and demanded payment of a ₦60 billion penalty.

Facebook Nigeria challenged the decision in court, arguing that ARCON lacked the legal authority to determine criminal liability or impose punitive financial sanctions through an administrative notice 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 foreign corporate entity.

In his ruling, Justice Bogoro agreed that Facebook Nigeria is legally distinct from Meta Platforms Inc. He held that ARCON failed to provide sufficient evidence showing that the Nigerian company owns, operates, or controls the social media platforms in question. According to the court, merely asserting that Facebook Nigeria represents Meta’s interests in Nigeria was insufficient to establish liability.

The judge further ruled that ARCON violated the constitutional right to fair hearing by making allegations and simultaneously imposing a substantial financial penalty without first allowing the company to respond. He noted that Section 57(4) of the ARCON Act requires the regulator to accord an alleged violator a fair hearing before imposing any penalty.

Justice Bogoro also held that the alleged violations under the ARCON Act are criminal in nature and that punishment can only follow a conviction by a competent court. Consequently, he concluded that ARCON lacked the statutory authority to impose the ₦60 billion fine through an administrative process, describing the action as a usurpation of judicial powers.

The court therefore set aside the notice in its entirety and issued a perpetual injunction preventing ARCON, its officers, agents, and representatives from enforcing the sanction against Facebook Nigeria. The judgment is expected to have significant implications for the scope of regulatory enforcement in Nigeria’s advertising industry and the relationship between regulators and global technology companies.