Businesses Face N100m Penalty, As FCCPC Plans AI Marketing Regulation

The Federal Competition and Consumer Protection Commission (FCCPC) has proposed new rules that would make businesses accountable for marketing messages, claims and consumer engagements generated or delivered through artificial intelligence (AI) and other automated technologies.

The proposed provisions are in the draft Sales Promotion Regulations, 2026, which seek to set requirements for the use of AI, machine learning, and automated systems in promotions, marketing communications, and consumer engagement directed at Nigerian consumers.

The Commission released the draft framework on September 30, 2026, and it also introduces tougher financial penalties for breaches, with corporate entities facing fines of up to N100 million or 1% of their previous year’s turnover, whichever is greater.

Under the proposed framework, businesses deploying AI or automated technologies for marketing purposes would be required to register such use with the FCCPC, while AI-generated or automated promotional content would have to be clearly identifiable. The rules also cover emerging tools such as AI chatbots, virtual influencers and automated messaging systems.

A major implication of the proposal is that companies would remain responsible for representations and claims produced by the technologies they deploy. Businesses would therefore not be able to rely solely on the fact that a message, recommendation or promotional decision was generated by an automated system where such output is misleading, discriminatory or otherwise harmful to consumers.

The proposal also places emphasis on consumer control over automated marketing. Businesses using AI-driven communications would be expected to provide consumers with the option to opt out, while the use of automated systems would have to comply with requirements against manipulation, misinformation and exploitation of consumer data or behavioural tendencies.

The development comes against the backdrop of the rapid expansion of AI tools across Nigeria’s business environment, including marketing, customer service, digital advertising and online commerce. The increasing use of automated systems has also created regulatory questions over who bears responsibility when technology generates inaccurate claims or influences consumer decisions.

The FCCPC’s move is part of a wider regulatory conversation around the digital economy, where the boundaries between competition, consumer protection, data governance and AI regulation are increasingly overlapping. In July, the Federal Ministry of Communications, Innovation and Digital Economy directed regulators to maintain the regulatory status quo on internet platforms and other cross-cutting digital issues pending the development of a harmonised national policy and governance framework.

The Commission’s proposed rules therefore add another dimension to Nigeria’s emerging approach to AI governance, particularly from the consumer-protection perspective. Earlier in the year, the FCCPC had also exposed broader consumer-protection regulations containing provisions dealing with fair dealing and marketing standards, advertising substantiation, commercial influence disclosures and protections for vulnerable consumers.

Meanwhile, the proposed Sales Promotion Regulations prescribe significant sanctions for violations. A corporate entity could face an administrative penalty of up to N100 million or one per cent of its previous year’s turnover, whichever is greater, while a natural person could face a fine of up to N50 million. Additional penalties of up to N10 million are proposed for specified breaches, including failure to fulfil promised promotional prizes or making false statements in applications.

The proposed measures come at a time when Nigeria is already confronting wider questions about the responsibilities of global technology companies and AI platforms operating in the country. In July, the FCCPC began an investigation into allegations involving Meta, Google, X and certain generative AI platforms, including claims of anti-competitive conduct and unauthorised use of Nigerian media content in AI development. The Commission stressed that the investigation did not constitute a finding of wrongdoing.

While the AI marketing provisions remain proposals rather than final enforcement rules, their implementation could require businesses to review how they use generative AI for advertising, customer engagement, automated recommendations and promotional campaigns. It could also increase the need for companies to maintain human oversight of AI-generated commercial content and demonstrate compliance with consumer-protection requirements.

Similarly, the FCCPC has previously established regulatory and enforcement frameworks under the Federal Competition and Consumer Protection Act, including its Administrative Penalties Regulations, even as its latest proposal signals an attempt to extend consumer-protection oversight into emerging automated marketing practices as AI becomes more embedded in commercial activities.