UCC, FSDU PARTNER TO ADDRESS COMPETITION & CONSUMER PROTECTION CHALLENGES IN THE USE OF CUSTOMER DIGITAL TRAILS

The Uganda Communications Commission (the Commission) is a Corporate body established under Section 4 of the Uganda Communications Act of 2013 to regulate communication services in Uganda including; telecommunications, broadcasting, postal, and courier services.

Mandate;

In it’s Data oversight mandates, (“data” means electronic representations of information in any form The Uganda Communications Act, 2013) the Commission sought collaboration/partnership with Financial Sector Deepening Uganda (FSDU), an organisation with documented leadership and expertise in Data for Financial Inclusion to appraise the Mobile Network Operator market conduct concerning third-party access to customer digital trails as well as the protection of customer interests.

The Commission’s mandate;

Section 5(e) empowers the Commission to protect consumers from excessive tariffs and prevent unfair competition practices.

Section 5(n) empowers the Commission to promote competition and facilitate entry of new and morden systems and services

Section 5(o) empowers the Commission to regulate interconnection and access systems between operators and users of telecommunications services

Section 53(2)(i) provides that “An operator shall not engage in any activities, which have, or are intended or are likely to have, the effect of unfairly preventing, restricting or distorting competition in relating to any business activity relating to communications services”.

Regulation 3(g) of the Fair Competition Regulation empowers the Commission to design consumer protection mechanisms and prevent anti-competitive conduct.

Regulation 6(1) provides that abuse of dominance can include excessive or discriminatory prices or terms; dissimilar conditions to equivalent transactions; supplementary obligations not connected with the subject of contracts; refusal to supply or grant access.

Background

The proliferation of Internet & Mobile telecommunication services has brought about an increase in mobile consumer data-centric products and services.  These services cut across industries including; banking, payments, retail credit, insurance, transport and logistics among others.

At the centre of these new services is the use of various forms of mobile consumer data including; bio-data, transaction and location history, expenditure patterns among others. This data is predominantly held by Mobile Network Operators and Internet Service Providers (ISPs) in the course of delivering licensed telecommunications services.

MNOs & ISPs have a privileged position given the data they collect,  which, if unchecked, presents new consumer protection and competition challenges in the market.  Indeed, they may even pose significant barriers to market entry of new innovative data-based business. This situation can be worsened by the fact that some of the MNOs are active participants in ancillary markets like Mobile payments, insurance and lending

As a result, the Commission with support from Financial Sector Deepening-Uganda has undertaken a market inquiry to identify current consumer protection concerns and antitrust bottlenecks in the use of mobile and digital consumer footprints. The inquiry also assessed market compliance readiness with respect to current and new consumer data protection legislation.

The Commission is desirous for an exploratory appraisal of regulatory best practice in facilitating competitive new fintech services as well as protecting the interests of consumers, which includes addressing challenges like ensuring informed consent and data porting rights.

The proliferation of mobile phone usage has resulted in Mobile Network Operators (MNOs) becoming warehouses of user data, and digital payment trails which combined with new age data analytics and computing power is being used to the operator’s advantage. In Uganda, the influence of MNO-held mobile data has been most profound in retail financial services. Most prominent use cases in Uganda include the evolution of microcredit and savings products. These have grown in reach and scale, accounting for an estimated UGX — 380 billion (USD 100 million) in loan disbursements.

The Commission has, therefore, collaborated with Financial Sector Deepening Uganda to build capacity, over eighteen months to launch a regulatory sandbox and related initiatives to enable the Commission better address the competition and consumer protection challenges in the use of MNO data trails through more responsive, evidence-based legal and regulatory processes

The support will be in two phases. The first six-month will include diagnostics and feasibility to assess, inter alia: the Commission’s existing legal and regulatory requirements around data privacy and sharing with third-parties, ensuring a fair, competitive landscape of the data ecosystem, market demand for alternative regulatory approaches to innovation, and the Commission’s capacity to implement a regulatory sandbox program. This phase will entail diagnostic studies and direct technical assistance to the Commission through specialists

The second phase will run for six (6) to twelve (12) months with a focus on designing and implementing legal and regulatory tools and processes linked to a regulatory sandbox or related initiative to support and learn from innovation in Uganda’s data ecosystem.

To this end, the data eco-system Inquiry aims at;

  • Providing a scoping review of current commercial conduct with respect to the use of data held by MNOs and digital service providers.
  • Identify consumer protection and competition abuses (for example; refusal to share, excessive pricing of services, exclusive dealing, among others)
  • Assessing operator compliance readiness for new statutory obligations
  • Develop new regulatory proposals to promote safe and competitive use and entry of data-centric business models and services.

Lastly, the DPPA provides guidance on the treatment of consumer data which provides a good foundation for the protection of personal data. This inquiry aims to build on this to unlock commercial opportunities and innovations in the use of non-personal data.

As a communications regulator, we are faced with the ever-increasing complexity of data infrastructure and market partnerships and anticompetitive practices that are likely to pose a major challenge for Communications regulation. This calls for a more dynamic regulatory framework to address the ever-evolving technology environment and requires collaboration across regulators of different industries.

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