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MRTP AND COMPETITION ACT

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THE MRTP ACT, 1969

Post independence, many new and big firms have entered theIndian market. They had little competition and they were trying tomonopolize the market. The Government of India understood theintentions of such firms. In order to safeguard the rights ofconsumers, Government of India passed the MRTP bill. The bill

was passed and the Monopolies and Restrictive Trade PracticesAct, 1969, came into existence. Through this law, the MRTPcommission has the power to stop all businesses that create barrierfor the scope of competition in Indian economy.

The MRTP Act, 1969, aims at preventing economic power

concentration in order to avoid damage. The act also provides forprobation of monopolistic, unfair and restrictive trade practices.The law controls the monopolies and protects consumer interest.

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MONOPOLISTIC TRADE PRACTICE

Such practice indicates misuse of one'spower to abuse the market in terms ofproduction and sales of goods and services.

Firms involved in monopolistic trade practicetries to eliminate competition from themarket. Then they take advantage of theirmonopoly and charge unreasonably high

prices. They also deteriorate the productquality, limit technical development, preventcompetition and adopt unfair trade practices.

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UNFAIR TRADE PRACTICE

The following may result in an unfair trade practice:

False representation and misleading advertisement ofgoods and services.

Falsely representing second-hand goods as new.

Misleading representation regarding usefulness, need,quality, standard, style etc of goods and services.

False claims or representation regarding price of goodsand services.

Giving false facts regarding sponsorship, affiliation etc. of

goods and services. Giving false guarantee or warranty on goods and services

without adequate tests.

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RESTRICTIVE TRADE PRACTICE

The traders, in order to maximize their profits

and to gain power in the market, often

indulge in activities that tend to block the flow

of capital into production. Such traders alsobring in conditions of delivery to affect the

flow of supplies leading to unjustified costs

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RESTRICTIVE TRADE PRACTICES

A restrictive trade practice is a trade practice,which

Prevents, distorts or restricts competition in anymanner; or

Obstructs the flow of capital or resources intothe stream of production; or

Which tends to bring about manipulation ofprices or conditions of delivery or effected theflow of supplies in the market of any goods orservices, imposing on the consumers unjustifiedcost or restrictions.

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ABOUT THE MRTP ACT, 1969

The MRTP Act extends to the whole of Indiaexcept the state of Jammu and Kashmir. Thislaw was enacted:

To ensure that the operation of the economicsystem does not result in the concentrationof economic power in hands of few,

To provide for the control of monopolies, and To prohibit monopolistic and restrictive trade

practices.

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UNLESS THE CENTRAL GOVERNMENT

OTHERWISE DIRECTS, THIS ACT SHALL NOT

APPLY TO: Any undertaking owned or controlled by the Government

Company,

Any undertaking owned or controlled by the Government,

Any undertaking owned or controlled by a corporation (not beinga company) established by or under any Central, Provincial or

State Act, Any trade union or other association of workmen or employees

formed for their own reasonable protection as such workmen oremployees,

Any undertaking engaged in an industry, the management ofwhich has been taken over by any person or body of personsunder powers by the Central Government,

Any undertaking owned by a co-operative society formed andregistered under any Central, Provincial or state Act,

Any financial institution

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MRTP COMMISSION AND FILING OF

COMPLAINT

For the purpose of this Act, the Central Government hasestablished a commission to be known as the Monopoliesand Restrictive Trade Practices Commission.

This commission shall consist of a Chairman andminimum 2 and maximum 8 other members, all to beappointed by the Central Government. Every membershall hold the office for a period specified by the CentralGovernment. This period shall not exceed 5 years.However, the member will be eligible for re-appointment.

In case of any unfair trade practice, monopolistic tradepractice and/or restrictive trade practice, a complaint canbe filed against such practices to the MRTP commission.

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THE PROCEDURE FOR FILING A

COMPLAINT IS AS FOLLOWS:

Complaint is filed either by the individual consumer orthrough a registered consumer organization.

The Director General of the MRTP commission wouldcarry on the investigation for finding facts of the case.

If the prima facie case is not made, the complaint isdismissed. If the compliant is true, an order is passedto its effect.

The commission restricts and restrains the concernedparty from carrying on such practices by grantingtemporary injunction.

Then the final order is passed. The complainant maybe compensated for his loss.

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THE COMPETITION ACT, 2002

The Competition Act, 2002, as amended bythe Competition (Amendment) Act, 2007,follows the philosophy of modern competition

laws. The Act prohibits anti-competitiveagreements, abuse of dominant position byenterprises and regulates combinations(acquisition, acquiring of control and Merger

and acquisition), which causes or likely tocause an appreciable adverse effect oncompetition within India.

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COMPETITION COMMISSION OF INDIA

Competition Commission of India is a body of theGovernment of India responsible for enforcing TheCompetition Act, 2002 throughout India and toprevent activities that have an adverse effect on

competition in India. The objectives of the Act are sought to be achieved

through the Competition Commission of India (CCI),which has been established by the Central

Government with effect from 14 October 2003. Ashok Chawla is the current Chairperson of the CC

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CCI consists of a Chairperson and 6 Membersappointed by the Central Government. It is the duty ofthe Commission to eliminate practices havingadverse effect on competition, promote and sustain

competition, protect the interests of consumers andensure freedom of trade in the markets of India.

The Commission is also required to give opinion oncompetition issues on a reference received from a

statutory authority established under any law and toundertake competition advocacy, create publicawareness and impart training on competition issues

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PREAMBLE TO THE COMPETITION ACT

An Act to provide, keeping in view of the

economic development of the country, for the

establishment of a Commission to prevent

practices having adverse effect on competition,to promote and sustain competition in markets,

to protect the interests of consumers and to

ensure freedom of trade carried on by other

participants in markets, in India, and for matters

connected therewith or incidental thereto.

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OBJECTIVES

Make the markets work for the benefit andwelfare of consumers.

Ensure fair and healthy competition in

economic activities in the country for fasterand inclusive growth and development ofeconomy.

Implement competition policies with an aimto effectuate the most efficient utilization ofeconomic resources.

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Develop and nurture effective relations and

interactions with sectoral regulators to ensure

smooth alignment of sectoral regulatory laws in

tandem with the competition law. Effectively carry out competition advocacy and

spread the information on benefits of

competition among all stakeholders to establishand nurture competition culture in Indian

economy.

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