Nigeria’s competition and consumer protection regulator has proposed a new compliance framework for businesses using artificial intelligence and automated systems to market products, run promotions or engage consumers, with corporate penalties potentially reaching N100 million or one per cent of annual turnover.
The Federal Competition and Consumer Protection Commission published the Draft Sales Promotion (Amended) Regulations, 2026 on 30 September and invited public comments by 20 October. The document is a consultation proposal and is not yet binding law. Its provisions would take effect only after the final regulations are published in the Federal Gazette.
If adopted in their present form, the rules would require businesses deploying AI, machine learning or other automated technologies for marketing activities directed at, or accessible to, consumers in Nigeria to register with the FCCPC. The draft does not clearly state whether the technology itself or the promotional activity must be registered, an ambiguity stakeholders may seek to resolve during the consultation.
Disclosure, choice and accountability
The proposal would require AI-generated or automated marketing content to be clearly identifiable. It expressly covers tools such as AI chatbots, virtual influencers and automated messaging systems, which are increasingly used by banks, retailers, telecommunications companies, online platforms and smaller businesses to communicate with customers.
Under the draft, these systems would have to be used transparently and could not be deployed to manipulate consumers, spread misinformation or exploit consumer data and behavioural tendencies. Consumers would also have the right to opt out of automated or AI-driven marketing communications at any time.
Responsibility would remain with the business using the technology. A company would be accountable for the representations, messages and claims generated or communicated by its automated systems. Where an algorithm produces misleading, discriminatory or harmful promotional outcomes, the promoter or operator could be liable for a breach.
That principle matters because automated campaigns can create and distribute thousands of personalised messages quickly. The draft makes clear that blaming a vendor, chatbot or algorithm would not by itself remove the advertiser’s responsibility to the consumer.
Records and algorithmic scrutiny
The proposed rules would require promoters and digital service providers using AI in marketing to retain detailed records of a system’s design, operation, data sources and decision-making processes for at least two years. Those records would have to be supplied to the Commission when requested.
Separate provisions on algorithmic promotions would require automated offers, pricing and targeting to operate transparently and without discrimination. They would prohibit mechanisms intended to manipulate behaviour, exploit vulnerability or misrepresent the comparative value of an offer. The FCCPC could also request disclosure of the criteria or logic behind an algorithmic promotion when assessing compliance.
For automated or online prize draws, the proposal goes further. A promoter could be required to provide information about the random selection software, including audit logs or source code. Digital platforms or intermediaries that host or distribute a misleading online promotion could also share liability under the draft.
The rules are written to reach beyond companies based in Nigeria. Promotions aimed at Nigerian consumers would fall within the proposed framework regardless of where the promoter is located. Foreign businesses targeting the Nigerian market could be treated as carrying on business in the country and be required to appoint a local representative or contact person.
Potential penalties
The draft proposes an administrative penalty of up to N50 million for an individual who breaches the regulations. A corporate body could face up to N100 million or one per cent of its turnover in the previous year, whichever is greater. These figures remain proposals and cannot be imposed under the draft as it stands.
Other proposed penalties include up to N10 million for failing to award a promised prize, failing to comply with the terms of a promotion or making a false statement in an application or undertaking. The text also contemplates action against company directors, including possible disqualification for up to five years in specified circumstances.
The broader regulations update rules dating from 2005, when AI chatbots, personalised digital advertising and virtual influencers were not part of mainstream commerce. The FCCPC says the review is intended to protect consumers and promote fair conduct in sales promotions.
What Nigerian businesses should examine
For brands, advertising agencies, fintech companies, e-commerce platforms and small businesses, the consultation is a prompt to map where AI already touches customer communication. That includes automated email and messaging campaigns, personalised offers, social media content, conversational bots, recommendation engines and software used to select promotion winners.
Businesses can begin by documenting the tools they use, the data those tools draw on and the people who approve their outputs. Clear labels, accessible opt-out controls, human review of claims and records of automated decisions would help companies prepare for the direction of travel, even though the final rules may change.
Vendor contracts will also deserve attention. A business that relies on an external marketing platform may still need access to records, audit information and explanations of how automated decisions are made. The proposed accountability model places the obligation on the promoter, not only on the technology supplier.
For consumers, the most important changes would be the ability to recognise when a marketing message was produced by automation, reject unwanted AI-driven communications and seek redress when an automated campaign misleads or discriminates.
The FCCPC has invited businesses, consumer groups, technology providers and members of the public to submit comments and recommendations by 20 October through its consultation email or in hard copy. Stakeholders should review both the policy direction and unresolved drafting questions before the deadline.
Call to action: Nigerian businesses using AI in customer engagement should audit their automated marketing now, while consumers and industry groups can study the draft and submit evidence-based comments to the FCCPC before the consultation closes.
