MTN Uganda fined UGX 2.3 Billion in Mobile money feud

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[/blockquote]When an e-money company called EzeeMoney sued MTN Uganda back in 2013, a few expected the court to rule in its favor, as going against a big company with big shot lawyers and all seemed impossible. This all began when EzzeMoney obtained a contract from MTN for the provision of digital transmission (E1) and 30 fixed telephone lines to carry out its mobile money business. Things turned around in January 28, 2013 when MTN Uganda canceled the contract, sighting direct competition in the mobile money business as the cause of termination. This move prompted EzeeMoney to sue MTN through their lawyers AF Mpanga and company advocates, saying MTN’s action “restricted and distorted competition.”

Now three years down the road, the Commercial court has ordered telecom giant MTN Uganda to pay a sum of UGX 2.3 billion (about $662,000) in damages to EzeeMoney Limited for sabotaging its business.

According to the Observer, on November 6, 2015 the telecom giant was ordered by Justice Henry Peter Adonyo to stop acting in unlawful and anti-competitive manner, which denies other businesses an opportunity to prosper. The Judge said that MTN should pay UGX 800m to EzeeMoney in general damages for loss of business. On top of that also pay a penalty of UGX 1.5bn in punitive damages this is just to enusre that other companies who plan to engage in uncompetitive business tactics think twice in the future.

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EzeeMoney said MTN also destituted it of services of other telecommunications operators. It argued that MTN used its exclusivity agreements to stop its agents from working for any other firm with similar business, further limiting competition. The Obsever further reports that the judge also found that MTN Uganda persuaded its agents to reject EzeeMoney. According to a witness, Sammy Mwathi, told court that he was an MTN money agent and he was restricted from dealing with other firms in the same business by signing exclusivity agreement.

Most of the tactics that MTN deployed made EzeeMoney to become inoperative, losing its business while MTN continued to prosper, grossing over $400m in revenue according to its 2014 report to investors, the judge said. She also declared MTN’s exclusivity agreements with its agents null and void contravening 53(1) (b) of the Communications Act 2013.