Cell C vindicated

The National Consumer Tribunal has cancelled a compliance notice issued by the National Consumer Commission (NCC) against Cell C, ruling that it was not issued fairly.

The tribunal's ruling, handed down recently, found that the NCC did not have “a reasonable belief that Cell C had engaged in prohibited conduct; the notice was issued for a reason not authorised in the Consumer Protection Act (CPA); the NCC did not consult with the Independent Communications Authority of SA”, as is required; and the issue of the notice was “not lawful, reasonable or procedurally fair”.

In August last year, the NCC issued a compliance notice against Cell C, to force it to amend its subscriber agreement to comply with the CPA. This after Cell C had agreed to make certain changes to its contract, but disputed a clause relating to prepaid vouchers, saying it contravened the law.

Since Cell C refused to sign a consent order, agreeing to make the changes the NCC wanted, the NCC issued the compliance notice against it last year. Cell C appealed the notice at the tribunal and the matter was heard on 20 March and 19 June.

The tribunal found that a proper investigation had not taken place, that it did not have a reasonable belief that the law was being flouted, and that it seemed the NCC issued the notice because it could not get Cell C to agree to its point of view.

It says it is unlawful to use the compliance notice as a threat to force a party to agree to terms it would not usually agree to.

Cell C argued that the notice referred to its original subscriber contract, and not the version incorporating amendments agreed to by the parties last July. The NCC argued that, while there were discussions, there was no agreement.

In addition, the NCC argued it did not use the compliance notice as a threat, as it is entitled to issue a notice if companies do not comply with the law. It argued the notice was attached to the contract that was being signed at the time, and that the amended contract did not resolve issues of non-compliance with certain sections of the Act.

Recently, several tribunal decisions have gone against the NCC, because it did not follow its own procedures. As a result, the merits of the cases have never been tested and no precedent has been set.

In an earlier matter against Vodacom, the cellular operator challenged the NCC's issuing of a compliance notice and the tribunal found that the commission unlawfully issued a compliance notice, to the wrong party, and for a reason not authorised in the law. The tribunal said the notice was not issued reasonably, nor was it procedurally fair.

Similarly, the tribunal recently threw out 45 notices against the City of Johannesburg, relating to the billing crisis, because the NCC did not follow proper procedures before issuing notices to the city.

Elizabeth de Stadler, a senior associate with Esselaar Attorneys, points out that the notice, yet again, was set aside on procedural grounds. The central complaint against the NCC is that it did not form an objective reasonable belief that Cell C engaged in prohibited conduct, she says.

De Stadler says all the cases in the mobile sector have been characterised by the NCC determining that agreements contravene the Act, but when operators disagree and refuse to sign a consent order, the NCC issues compliance notices, without a proper investigation or a “meaningful and critical engagement” on the issues.