THE MONOPOLIES

AND RESTRICTIVE

TRADE PRACTICES

ACT 1969

INTRODUCTION

• It came in to force from 1 June 1970

• It is designed to ensure that the operation of the economic system does not result in concentration of the economic power to the common detriment.

• The act also provides for probation of monopolistic, unfair and restrictive trade practices.

INTRODUCTION

• The authority for this is derived from the Directive Principles of State Policy contained in Article 39 of the Constitution of India

• Has been amended in 1974 , 1980 , 1982 , 1984 and 1991.

OBJECTIVES

• Before the amendment of 1991

• Regulating monopolies and preventing concentration of economic power

• Prohibit monopolistic , restrictive and unfair trade practices

• After the amendment of 1991

• controlling monopolistic trade practices

• Regulating restrictive and unfair trade practices

MONOPOLISTIC TRADE PRACTICES

• Any trade practice which seeks to prevent competition and which results in high price.

Such as

• Unreasonably high prices

• Limiting technical development

• Limiting capital investment

• Lower quality of good and services

• Preventing or lessening competition

RESTRICTIVE TRADE PRACTICES

• Any trade practice that that tend to block the flow of capital into production and also bring in conditions of delivery to affect the flow of supplies leading to unjustified costs.

Such as• Refusal to deal with persons or classes of

persons• Tie in sales or full line forcing• Exclusive dealing agreements• Collective price distribution and tendering

RESTRICTIVE TRADE PRACTICES

• Discriminatory dealing

• Re-sale price maintenance

• Restriction on output or supply of goods

• Control of manufacturing process

• Boycott

• Price control agreements

• Government recognition of practices as restrictive

• Residual restrictive trade practices

UNFAIR TRADE PRACTICES

• Unfair trade practice means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair or deceptive practice.

Such as

• Misleading advertisements and false representation

• Advertising of bargain price

• Falsely representing second-hand goods as new.

UNFAIR TRADE PRACTICES

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

• Supplying unsafe and hazardous products

• Hoarding or destroying of goods

• Refusal to sell goods , resulting in a price rise

• Giving false facts regarding sponsorship, affiliation etc. of goods and services.

• Giving false guarantee or warranty on goods and services without adequate tests.

FILLING OF COMPLAINT UNDER MRTP ACT

• In case of any unfair trade practice, monopolistic trade practice or restrictive trade practice, a complaint can be filed against such practices to the MRTP commission. The procedure for filing a complaint is as follows:

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

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

If the prima facie case is not made, the complaint is dismissed. If the compliant is true, an order is passed to its effect.

The commission restricts and restrains the concerned party from carrying on such practices by granting temporary injunction.

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

REGULATION OF MTP

• Central government may:

Regulate production and fix terms of sale

Prohibits any action that restricts competition

Fix standards for goods and services

REGULATION OF RTP AND UTP

• The MRTP Commission if on enquiry concludes that the practice under consideration is of restrictive or unfair in nature , it may:

Order discontinuation of the practice and restrict its repetiton (cease and desist order )

the agreement shall be void and shall stand modified as may specified in the order