Presentation on theme: " The Monopolies and Restrictive Trade Practices was adopted by the government in 1969 and the MRTP Commission was set up in 1970. The act came into."— Presentation transcript:
The Monopolies and Restrictive Trade Practices was adopted by the government in 1969 and the MRTP Commission was set up in 1970. The act came into force from 1st June 1970 and has been amended in 1974,1980,1982,1984 and 1991 The Act extended to the whole of India excepting Jammu and Kashmir.
In the pre-1991 period the declared policy of the government was to curb and restrict the growth of monopoly power in the country. for this purpose, the government imposed restrictions on the entry of large business houses in a number of industries, set up a large number of industries in the public sector, and undertook various measures to encourage small and medium industries. MRTP ACT 1969 :
The most important in this phase was passing of the MRTP Act (Monopolies and Restrictive Trade Practices Act) in 1969 and the setting up of the MRTP Commission in 1970. Since 1991, the focus has shifted from controlling monopolies to promoting competition.
Control of monopolies, Prohibition of monopolistic and restrictive and unfair trade practices.
Monopolistic Trade Practice Sections 31 and 32 of the MRTP Act relate to monopolistic trade practices. ‘monopolistic trade practice’ means a trade practice which has, or is likely to have, the effect of- 1. Maintaining the price of goods or charges for the services at an unreasonable level by limiting, reducing or otherwise controlling, production, supply or distribution of goods (or services) 2. Unreasonably preventing or lessening competition in the production, supply or distribution of any of goods produced, supplied or distributed or any services rendered in India,;
3. Increasing unreasonably- (a) the cost of production of any goods; or (b) charges for the provision, or maintenance, of any services; 4. Increasing unreasonably- (a) the prices at which goods are or may be, sold or resold (b) the profits which are, or maybe derived by the production, supply or distribution of any goods 5. Preventing or lessening competition in the production, supply, or distribution of any goods(or services)by the adoption of unfair methods or unfair or deceptive practices.
Restrictive Trade Practice According to the MRTP Act, A trade practice which has, or may have the effect of preventing, distorting or restricting competition in any manner Which tends to obstruct the flow of capital or resources into the stream of production, or Which tends to bring about manipulation of prices or conditions of delivery or to affect the flow of supplies in the market relating to goods or services in such manner as to impose on the consumers unjustified costs or restrictions. A trade practice which has or may have the effect of preventing, distorting or restricting competition in any manner, is a restrictive 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 Offer or Bargain Price Free gifts offer and Prize Schemes Non-compliance of Prescribed Standards Hoarding, Destruction etc
The Industrial policy statement of 1991 bring drastic changes in MRTP Act. These provisions were criticized very much because of their negative impact on growth and competition. This act is not applicable to : This act is not applicable to (i) Any undertaking owned or controlled by a government (central or state) (ii) Any undertaking the management of which has been taken over by the government. (iii) Any undertaking owned by a cooperative society
(i) The Monopolies and Restrictive Trade Practice Commission. (ii) The Central Government and Supreme court.
ACTION CAN BE INITIATED BY: AN INDIVIDUAL CONSUMER A REGISTERED ASSOCIATION OF CONSUMERS A TRADE ASSOCIATION GOVERNMENT( Central and State Government) MRTP COMMISSION SUO MOTU
Competition Act, 2002 With the economic reforms program in 1991, MRTP Act lost its relevance in the new liberalized and global competitive scenario. There was a shift of focus from curbing monopolies to promoting competition. Competition bill, 2001 was introduced in Parliament and passed in December 2002. This Act is called Competition Act, 2002.
It is a tool to implement and enforce competition policy and to prevent and punish anti-competitive business practices by firms and unnecessary Government interference in the market.
To prevent practices having adverse effect on competition, To promote and sustain competition in markets, To protect the interests of consumers.
Overall Scheme Competition Act, 2002, is designed for the following purposes: Prohibition of anti-competitive agreements; Horizontal Agreement Vertical Agreement Prohibition of abuse of dominant position
MRTP A CT, 1969C OMPETITION A CT, 2002 Based on the pre-reforms scenario Based on the post-reforms scenario Complex in arrangement and language Simple in arrangement and language and easily comprehensible Frowns upon dominanceFrowns upon abuse of dominance Registration of agreements compulsory No requirement of registration of agreements No penalties for offencesPenalties for offences Reactive and rigidProactive and flexible Unfair trade practices coveredUnfair trade practices omitted