Mrtp act

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1. Monopolistic and restrictive trade practice act Presented To :- Mr. Shah Mohammad Sir Faculty of I.B.M. C.S.J.M. University Kanpur Presented By :- Jai Prakash MBA 1 st SEM. Batch: (2015-17)

2. EXTANT COMPETITION LAW OF INDIA MONOPOLIES AND RESTRICTIVE TRADE PRACTICES ACT,1969 BROUGHT INTO FORCE IN 1970

3. INTRODUCTION THE MONOPOLISTIC AND RESTRICTIVE TRADE PRACTICE ACT,1969, WAS ENACTED TO ENSURE THAT THE OPERATION OF THE ECONOMIC SYSTEM DOES NOT RESULT IN THE CONCENTRATION OF ECONOMIC POWER IN HANDS OF FEW. THE ACT CAME INTO FORCE FROM 1 ST JUNE, 1970, AND HAS BEEN AMENDED IN 1991

4. HISTORY OF MRTP Constitution of India, Art. 39 (c) – “the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment” 1947- 1969: Regimented and strict system of government controls 1969: Monopolies and Restrictive Trade Practices Act (MRTP Act) legislated

5. EVOLUTION 1999: Expert Group on interaction between Trade and Competition Policy recommended new competition law to “promote fair competition and control (eliminate) anti-competitive practices” in the market 2000: GOI High Level Committee on Competition Law and Policy provided a draft Competition law. 2002: The Competition Act legislated

6. EVOLUTION 2004: UPA government elected despite “India Shining” belief NCMP commits to greater effort towards increasing competition and a competitive environment – broad basing development 2005: GOI asks CCI to develop consultation paper on National Competition Policy 2005: CCI establishes Advisory Committee to develop draft National Competition Policy 2006: Planning Commission establishes Working Group on Competition Policy (for 11 th Plan – 2007-12)

7. OBJECTIVES : Prevention of concentration of economic power in a few hands Control and regulation of monopolies in certain sectors Prevention of unfair trade practices Prevention of restrictive trade practices

8. APPLIABILITY The MRTP Act extends to the whole of India except Jammu and Kashmir. Unless the Central Government otherwise directs, this act SHALL NOT apply to: Any undertaking owned or controlled by a Government company Any undertaking owned or controlled by the Government Any undertaking owned or controlled by a corporation (not being a company established by or under any Central, Provincial or State Act )

9. 1991 AMENDMENTS TO MRTP ACT SIZE CONCEPT GIVEN UP CURBS ON GROWTH OF MONOPOLY COMPANIES DELETED MERGER CONTROL REMOVED MORE EMPHASIS ON PROHIBITION OF RTPs, UTPs AND MTPs IN SUM, BIG BECOMING BIGGER IS NO MORE UGLY

10. REGULATION OF MTP s Regulation of production and fixing the term of sale. Prohibiting any action that restricts competition. Fixing standards for goods produced.

11. RESTRICTIVE TRADE PRACTICES A trade practice which restricts or reduces competition may be termed as Restrictive Trade Practices and it harm the consumer interest. Because of their adverse effect on the consumer and public interest, they are sought to be regulated in almost every country of the world.

12. REGULATION OF RTP s The practice shall not be repeated. The agreement shall be void and shall stand modified in such a manner as may be specified in the order.

13. UNFAIR TRADE PRACTICE A trade practice which, for the purpose of promoting any sale, use or supply of any goods or services, adopts unfair method. These are categorized as: False Representation False Price or Bargain Price Free gifts offer and Prize Schemes Non-compliance of Prescribed Standards Hoarding, Destruction etc.

14. FALSE REPRESENTATION • Falsely suggests that the goods are of particular standard quality, grade and composition • Falsely suggest any re-built good as new one • Makes a misleading representation concerning for the need for, or the usefulness of, any goods or services • Gives any warrantee or guarantee to the performance and efficacy of the goods that is not based on proper tests • A promise to replace until it has achieved a specified result

15. FALSE OFFER OR BARGAIN PRICE When an advertisement is published in newspaper, offering goods at a bargain price when in fact there is no such intention that the same may be offered at the same price for reasonable period

16. FREE GIFTS OFFER AND PRIZE SCHEMES Offering any gifts along with some other goods when the intention is different Creating an impression that something is offered free when in fact the price is included in the price of article sold Offering some prizes to the buyers by the conduct of any contest with real intention to promise sales

17. NON-COMPLIANCE OF PRESCRIBED STANDARDS Any sale or supply of goods, knowing or having reason to believe that the goods do not comply with the standards prescribed by some competent authority

18. HOARDING,DESTRUCTION ETC. Any practice of that permits the hoarding or destruction of goods with an intention to raise the cost of those or other similar goods

19. DRAWBACKS OF MRTP ACT Poorly resourced commission. Inadequacy in dealing effectively with anti-competitive practices, due to lack of definitions, cumbersome procedures and scarce resources. Absence of specification of identifiable anti-competition practices. Anti-competition practices like cartels, predatory pricing, rigging etc. are not specifically mentioned in the MRTP Act.

20. Procedure of action on complaint: Inquiry may be initiated through a complaint by an individual or registered consumer organisation. Fact finding investigation is carried on by the Director General . I f no prima facie case is made, the complaint is dismissed, else an order is passed to that effect. The commission may restrain the party concerned from carrying on the trade practices by granting temporary injunction. Final order is passed. Compensation may be granted to the complaint.

21. Address- C omplaints regarding monopolistic trade practice , unfair trade practice and restrictive trade practice can be made to the MRTP commission at the following address : Director General (Investigation & Registration) MRTPC Bikaner House Baracks Shahjahan Road New Delhi 110011

22. RELIEF AVAILABLE The practice shall be discontinued or shall not be repeated The agreement relating thereto, shall be void Any information relating to such unfair trade practice shall be disclosed

23. REMEDIES UNDER THE ACT Temporary Injunction Compensation

24. CONCLUSION The MRTP Act, besides adversely affecting economic growth, blunted Indian companies’ ability to grow, consolidate and improve competitiveness. This has had a very dampening effect on their global competitiveness.

25. Conclusion It can be said that the MRTP Act was successful to an extent. However, due to scarcity of resources, lack of clearly defined procedures and cumbersome rules and regulations, the Act wasn’t as effective as it was supposed to be. Also, the changing economic and trade environment (brought by the New Economic Policy, 1991) made it necessary for a change in the MRTP Act.