COMPETITION ISSUES: TRANSFORMATION FROM MRTP ACT TO

COMPETITION 2002:
Introduction:
Competition and consumer protection law and policy areas form part of the development
perspective of UNCTAD's work. Considering the needs of consumers, especially in
developing countries, and the imbalances they face in economic terms, educational levels and
bargaining power
Competition laws that are not complemented by consumer protection provisions or separate
consumer laws risk failure to protect consumers against anti-competitive practices.
The past few years have been challenging for the economy and for businesses world over,
making the task of policy makers even more daunting. India, in the pursuit of globalization
responded by opening up its economy by removing controls and resorting to liberalization. In
the light of this, the obvious need of the hour was that the Indian market be geared to face
competition from within the country and outside. The financial crisis which gripped world
strengthened the need and highlighted the importance of a strong and effective competition
policy, a policy which would encourage markets to work well for the benefit of business and
consumers, thereby increasing the countrys economic fitness: markets characterized by
effective competition makes firms innovate more, keep prices down for consumers and
improved total factor productivity drives economic growth.
This increases competition between firms and results in efficiency and/or quality
improvement, which in turn benefits consumers. There are studies that quantify benefits to
consumers from competition in different sectors of the economy as well as those that
quantify the adverse effects of anti-competitive practices on consumers
The Indian competition law regime is a nascent regime. It is barely four years since our new
competition law- the Competition Act has become operational. Prior to the operationalization
of the Competition Act in May 2009, MRTP Act was the operational law that regulated
certain aspects of competition.
In light of the changing economic situation and initiation of economic reforms in the country
post 1991, the need was felt for a change in approach towards fostering competition. Against
this background, the Finance Minister of India in its budget speech in February, 1999 made
the following statement in the context of to the then existing MRTP Act:
The MRTP Act has become obsolete in certain areas in the light of international economic
developments relating to competition laws. We need to shift our focus from curbing
monopolies to promoting competition. The Government has decided to appoint a committee

to examine this range of issues and propose a modern competition law suitable for our
conditions.
One of the biggest failings of the MRTP Act was the inadequacy of MRTP Act to provide
adequate remedy to complainants. Except for orders directing a respondent to cease and
desist from the alleged monopolistic, restrictive or unfair trade practices the MRTP
Commission could not impose penalties for breach of law and; no other penalty or fine could
be imposed.
Objective and Scope:
The principal objective of studying issues of competition law is to foster competition as an
instrument for accelerating growth through innovation and economic efficiencies thus
maximising consumer welfare by offering better products at lower prices. It achieves its
objectives in three ways viz., prohibiting anti-competition agreements and practices that
harm free trade and competition; preventing abuse of dominant position and anti-competitive
practices that lead to such a dominant position and; regulating mergers.
Methodology Adopted:
The Competition law of India is going through such a phase that it needs to be addressed
sincerely. The abuse of dominance being the major abuse to the enterprises cannot be
resorted to only by looking into the records and practices. It has to come over pen and paper
and has to be established practically. And for the same reason the study has to be done using
secondary approach ie. by researching through various enterprises, prevalent anticompetitive agreements between them which ultimately affects the consumer. Several studies
have shown how a competition law has enabled the growth process by conserving scarce
resources and aiding the growth process in the economy but that has to be established beyond
theories and above books. The Competition watchdog is considering practical approaches to
gain approximate results.
Conclusion:
In jurisdictions such as India, the EU and the US, competition law includes promotion and
protection of consumer interest and welfare among its goals. In these cases, there is a direct
reference to consumer welfare and interest.
The Competition Act is a big step in Indias competition law framework from MRTP regime
focused on curbing of monopolies to promote competition in market by proscribing
practices that have appreciable adverse effect on competition. The CCI has to be cautious
and consistent with respect to its approach in terms of its operations and advocacy exercise.

A consistency in CCIs approach in will go long way in enabling the industry in planning
pro-competitive business strategy within the framework of the Competition Act.
Bibliography:
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www.manupatra.com
www.westlawindia.com
www.slideshare.net
Competition Law of India By Dr. S. C Tripathi
5. Competition Law of India By Abir Roy