Posted on: 03:48 Thu, 19 Nov 2015



The commercial court has ordered
telecoms giant MTN Uganda to pay the
sum of Shs 2.3 billion (about $662,000)
in damages to EzeeMoney Limited for
sabotaging its business.

Justice Henry Peter Adonyo on
November 6, 2015 also ordered MTN
to stop acting in an unlawful and
anti-competitive manner, which
denies other businesses an
opportunity to prosper.

Justice Adonyo said MTN should pay
Shs 800 million to EzeeMoney in
general damages for loss of business.

It should also pay a penalty of Shs
1.5 billion in punitive damages to
deter not only MTN but also warn
other companies against
uncompetitive business tactics,
reported NAN/Reuters in a joint
report on Wednesday.

It all started when EzeeMoney, which
runs an e-money business, obtained
a contract from MTN for the
provision of digital transmission [E1]
and 30 fixed telephone lines to carry
out its mobile money business.



EzeeMoney then contracted Yo!
Uganda Limited (YUL) to implement
the service after Uganda
Communications Commission, the
regulator, approved it on December
2012, to use the 7711 short code to
enable its customers to subscribe for
e-money services.

But in 2013, MTN cancelled the
contract, saying EzeeMoney was a
direct competitor to its mobile
money business. Through AF Mpanga
and company advocates, EzeeMoney
went to court, saying MTN’s action
“restricted and distorted
competition”.

EzeeMoney said MTN also damaged
its ties with YUL and deprived 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.

In a January 28, 2013 letter to
EzeeMoney, MTN appeared to say its
business would be disrupted if the
former was given access to its
platform.

“EzeeMoney is in direct competition
with MTN in the provision of mobile
money,” read the letter in part.

Justice Adonyo said the letter
confirmed that MTN was stopping
services of the company because it
considered it a competitor.

“It is testified that when YUL
required the defendant (MTN) to
activate the plaintiff’s (EzeeMoney)
short code on its platform, the
defendant declined to do so on the
basis that the plaintiff was in direct
competition with it,” the judge
observed.

“YUL then seeing that the plaintiff
couldn’t carry out the business they
had agreed together, by a letter
dated 7/2/2013, did terminate all
services with the plaintiff as YUL did
not want to jeopardize its
relationship with the defendant.”

The judge also found that MTN
coerced its agents to reject
EzeeMoney. One witness, Sammy
Mwathi, told the 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.

The ruling in Uganda came at a time
when MTN Group has just suffered a
$5.2 billion fine in Nigeria after it
failed to disconnect unregistered
lines.

Source:- This Day Live