In 2015, EzeeMoney, a small payments start-up, won Shs2.3b from MTN.
But on October 22, 13 years after the dispute began, the Court of Appeal upheld the win but took away most of the money.
Court agreed that MTN had unlawfully interfered with EzeeMoney’s business, but cut what MTN must pay by 87 percent, to Shs300m.
It also ruled that the law on telecoms, which EzeeMoney relied on, never protected a payments firm.
In 2013, Uganda had no general competition law, the kind of rules that stop big firms from unfairly shutting out smaller rivals.
EzeeMoney had to borrow laws made for something else. But court now says they did not fit, and EzeeMoney seems to be paying for a gap it did not create.
A code and a quarrel
Mobile money runs on short codes. EzeeMoney wanted its code, 7711, switched on across MTN’s network through Yo!, a firm that links businesses to phone networks.
‘For [EzeeMoney] to access its customers, it required the services of MTN. It could not provide services without MTN,’ says Anthea Paelo, an economist who studies competition.
But court records show MTN ‘declined to connect’ EzeeMoney through Yo!, ‘requiring instead’ that it ‘directly agree on commercial terms’ with MTN.
It also withdrew its post-paid services, phone and data lines, because, ‘being a new company, EzeeMoney did not meet the credit vetting requirements.’
A January 2013 letter called EzeeMoney ‘in direct competition with MTN’ in mobile money and MTN’s agents, who were on contract, were barred from serving rivals.
EzeeMoney sued in 2013 and in November 2015, the Commercial Court awarded EzeeMoney Shs2.3b, which MTN appealed.
Who won what
Over 11 years later, the Court of Appeal, led by Justice Geoffrey Kiryabwire, delivered a ruling on October 22.
In the ruling, court found that MTN had not broken the Uganda Communications Act, leading to a reduction in compensation for losses from Shs800m to Shs200m, and a sum meant to punish bad behaviour from Shs1.5b to Shs100m.
But MTN lost on three grounds. MTN had argued that EzeeMoney should first have taken its complaint to UCC, which regulates the telecom, but the judges said: ‘it would not have been proper to dismiss the entire suit on that basis alone.’
Before trial, MTN had agreed in writing that it was the dominant firm. When it tried to take that back, court said the trial judge ‘was correct to hold’ MTN to its word.
Most importantly, MTN ‘was properly held liable for wrongful interference’, so it still pays, with interest from 2015.
The wrong law
The case turned on section 53 of the Communications Act, which bars phone companies from unfairly blocking competition in business ‘relating to communication services’.
The Act defines these as ‘the dissemination or interchange of audio, visual or data content’, or in everyday terms, sending sound, pictures or data.
EzeeMoney argued that moving money by phone was exactly ‘the dissemination of data content using telecommunications media.’
MTN said EzeeMoney was ‘a payment services company’ with no telecom licence.
Court agreed with MTN, helped by EzeeMoney itself, which admitted that the company ‘does not carry out communication services, [and was] not regulated by UCC.’
This left EzeeMoney stuck. Because court viewed it as a payments firm, not a phone company.
Thus, the telecom law did not protect it. A general competition law would have protected it, but it was not in existence.
What nobody measured
Kitaka worries more about what went unasked.
Holding MTN to its admission of dominance ‘should not be mistaken for a substantive test for dominance,’ he says. So, nobody checked MTNs real market power.
‘In terms of the competition dimension of the dispute, nothing was ever tested under the law,’ agrees Remmy Wehanze, a legal associate at Taslaf Advocates, with good knowledge of competition law.
To Paelo, the answer was obvious. ‘If you had done an economic analysis, it was clear to see that MTN had majority market share,’ she says, in phone services and mobile money alike.
The fight over ‘communication services’ also skipped what Kitaka sees as the real question: did the firm owning the road to customers use it to shut out a rival?
Paelo thinks so. Cutting off those services ‘foreclosed that business’, she says.
Add the exclusive agent deals, and ‘that is clear vertical foreclosure,’ where a firm is using its grip on one market to squeeze a rival.
What the vacuum cost
The judgment never mentions the vacuum, but its findings show it at work.
First, EzeeMoney had nothing better to sue under. ‘It was really a gap that existed within the competition law,’ says Wehanze.
Competition rules existed only inside individual industries, such as telecoms, so a payments firm had to squeeze its case into one.
Second, losing that argument shrank the award. The 2015 award had paid EzeeMoney partly for MTN breaking the telecom law.
With that claim gone, the judges called the original sums ‘disproportionate to the proven harm’ and paid EzeeMoney only for the damage from MTN’s unlawful interference.
Third, the rules against exclusive deals were out of reach. EzeeMoney said telecom regulations from 2005 already banned them, but court said it ‘cannot rely on’ those rules.
Bank of Uganda, which oversees mobile money, banned such contracts only in October 2013, after the events.
Fourth, the one regulator EzeeMoney tried did not help. It ‘had in fact attempted to approach UCC but was turned away,’ court noted, and MTN’s own lawyer was ‘not certain whether a Communications Tribunal’, the body meant to hear appeals against UCC,’ existed.
That left only courts. Not every setback came from the vacuum. Some came from the evidence.
The trial judge used reports on MTN’s finances that had been rejected as evidence, which the appeal judges called ‘improper’.
And EzeeMoney brought no detailed figures to prove its losses.
The charge that stuck
What survived was wrongful interference, a common-law rule that punishes anyone using unlawful means to wreck another firm’s business.
Court found that agents who kept serving EzeeMoney had their equipment confiscated and some were briefly detained, conduct that ‘goes beyond lawful commercial enforcement of contractual terms’.
MTN, it found, ‘induced’ Yo! ‘to terminate its aggregation arrangement’, the deal through which Yo! carried EzeeMoney’s code.
Court accepted evidence of ‘the 79 percent drop in transactions’ and ‘the inactivation of 65 percent of service centers’.
MTN argued that its exclusive agent contracts were ‘commercially justified,’ but court noted that ‘means MTN used to enforce them’ crossed the line.
A law at last
Uganda now has the law it lacked. The Competition Act took effect in April 2024.
The new law, says Wehanze, ‘would treat these facts very differently’. A payments start-up ‘will no longer have to show that it belongs to a regulated sector before it can complain.’
The new rules, he says, would test three parts of EzeeMoney’s complaint, including blocking a rival from a network it needs, which the rules treat as abuse, using market power in one market, to protect its business in another, and exclusive deals imposed by an ‘unavoidable trading partner’.
But the law cannot be applied retrospectively, and Wehanze says the technical committee meant to hear such cases has not been set up.
Nor have the courts filled the gap. In April 2025, the Commercial Court judge Stephen Mubiru ordered MTN to pay VAS Garage, a digital-services firm, over Shs11b for breach of contract and unfair competition, a ruling MTN has appealed.
But that case rested on the law of civil wrongs.
EzeeMoney’s case shows what a missing law costs: a start-up forced to argue it was something it was not, a court obliged to say so, and a market left to wait.
The competition law came a decade too late for EzeeMoney. The next one may be luckier, if the new rules are used.