Chapter 9

ETHICS IN MARKETING AND CONSUMER PROTECTION

CHAPTER-9
ETHIC IN MARKETING AND CONSUMER PROTECTION

Meaning

Ethical Guidance

Benefit of behaving ethically in marketing

Competition

Consumer

Public Interest

Code of conduct

Bribery Gift

Not possible to make 2 column

Q. EXPLAIN THE MEANING OF ETHIC IN MARKETING .4P. The task of marketers is to influence the behavior of customers. To accomplish this goal, marketers have a variety of tools at their disposal. Broadly speaking, these tools include the design of a product, the price at which it is offered, the message used to describe it, and the place in which it is made available. Ethics are standards of moral conduct. To act in an ethical fashion is to conform to an accepted standard of moral behavior. Undoubtedly, virtually all people prefer to act ethically. It is easy to be ethical when no hardship is involved when a person is winning and life is going well. The test comes when things are not going well when pressures build. These pressures arise in all walks of life, and marketing is no exception. Marketing executives face the challenge of balancing their own best interests in the form of recognition, pay, and promotion, with the best interests of consumers, their organizations, and society into a workable guide for their daily activities. In any situation they must be able to distinguish what is ethical from what is unethical and act accordingly, regardless of the possible consequences.

Q2.EXPLAIN ETHICAL GUIDELINES IN MARKETING. Many organizations have formed codes of ethics that identify specific acts (bribery, accepting gifts) as unethical and describe the standards employees are excepted to live up to. Over 90 per cent of the Fortune 1,000 companies have ethics codes, as do many smaller business. These guidelines lessen the chance that an employee will knowingly or unknowingly violate a companys standards. In addition, ethics codes strengthen a companys hand in dealing with customers or prospects that encourage unethical behavior. For young or inexperienced executives, these codes can be valuable guides, helping them to resist pressure to co promise personal ethics in order to move up in the firm. However, every decision cannot be taken out of the hands of the manager. Furthermore, determining what is right and what is wrong can be extremely difficult. It is not realistic for an organization to construct a two-column list of all possible practices, on headed ethical and the other unethical. Rather, a marketer must be able to evaluate a situation and formulate a response. Q WHAT ARE THE BENEFIT BEHAVING ETHICALLY IN MARKETING.

Benefit of behaving Ethically in Marketing

Public confidence

No increase in government regulations

Guaranteed power by society

Protecting image of organization

PUBLIC, GOVERNMENT,SOCIETY,PROTECT IMAGE OF ORGANISATION. Marketing executives should practice ethical behavior because it is morally correct. While this is simple and beautiful in concept, it is not sufficient motivation for everyone. So lets consider four pragmatic reasons for ethical behavior: To reverse declining public confidence in marketing. Periodically we hear about misleading package Labels, false claims in ads, phony list prices, and infringements of well established trademarks. Though such practices are limited to only a small proportion of all marketing, the reputations of all marketers are damaged. To reverse this situation, business leaders must demonstrate convincingly that they are aware of their ethical responsibility and will fulfill it. Companies must set high ethical standards and enforce them. Moreover, it is in managements interest to be concerned with the well-being of consumers, since they are the lifeblood of a business. To avoid increases in government regulation. Our economic freedoms sometimes have a high price, just as our political freedoms, do. Business apathy, resistance, or token responses to unethical behavior simply increase the probability of more government regulation. Indeed, most of the governmental limitations on marketing are the result of managements failure to live up to its ethical responsibilities at

one time or other. Moreover, once some form of government control has been introduced, it is rarely removed. To regain the power granted by society. Marketing executives wield a great deal of social power as they influence markets and speak out on economic issues. However,

there is responsibility tied to that power. If marketers do not use their power in a socially acceptable manner, that power will be lost in the long run. To protect the image of the organization. Buyers often form an impression of an entire organization based on their contact with one person. More often than not, that person represents the marketing function. You may base your opinion of a retail store on the behavior of a single sales clerk. As Procter & Gamble put it in an annual report: When a Procter & Gamble sales person walks into a customers place of business that sales person not only represents Procter & Gamble, but in a very real sense, that person is Procter & Gamble. Question : Explain the extent to which it is possible to observe ethical behaviour in marketing. Also explain in brief the merits and demerits of the above (May 2008) Answer Ethical behaviour in Marketing; Merits and Demerits:Market is flooded with duplicate goods having fake labels for selling drugs, food stuffs, consumables like agarbathis, suparis etc. followed by misleading advertisements. This results in disrepute for the products of good companies even though such fake goods are small in quantities. Setting high ethical standard and enforcing them reverses the position. If government notices such depletion of ethical standard, rigid regulations are brought in and are never withdrawn. Marketing executives enjoy great amount of social power in influencing the society. They also are the emblems for the organization. Once the virtues are lost it is difficult to regain the social power, influence and image. Question 4 Explain the pragmatic reasons for maintaining ethical behaviour in marketing through marketing executives. (November 2009) Answer Pragmatic reasons for maintaining ethical behaviour: Marketing executives should practice ethical bahaviour because it is morally correct. To maintain ethical behaviour in marketing, the following positive reasons may be useful to the marketing executives: 1. To reverse declining public confidence in marketing: Sometime misleading package labels, false claim in advertisem ent, phony list prices, infringement of trademarks pervert the market trends and such behaviour damages the marketers reputation. To reverse this situation, business leaders must demonstrate

convincingly that they are aware of their ethical responsibility and will fulfill it. Companies must set high ethical standards and enforce them. Moreover, it is in managements interest to be concerned with the well being of consumers, since they are the lifeblood of a business. 2. To avoid increase in government regulation: Business apathy, resistance, or token responses to unethical behaviour increase the probability of more governmental regulation. The governmental limitations may also result from managements failure to live up to its ethical responsibilities. Moreover, once the government control is introduced, it is rarely removed. 3. To retain power granted by society: Marketing executives wield a great deal of social power as they influence markets and speak out on economic issues. However, there is a responsibility tied to that power. If marketers do not use their power in a socially acceptable manner, that power will be lost in the long run. 4. To protect the image of the organisation: Buyers often form an impression of an entire organisation based on their contact with one person. That person represents the marketing function. Some times a single sales clerk may pervert the market opinion in relation to that company which he represents. Therefore, the ethical behaviour in marketing may be strengthened only through the behaviour of the marketing executives.

Fig.3 Q What is Competition?

COMPETITION

Meaning

Competition policy & Laws

Competition Law

Genus

Inject power to commission

Preserve & Promote Process

Cost effective

GYPCI. (GENUS,YIELD,PRESERVR, PROMOTE, PROCESS,COST EFFECTIVE, INJECTING POWER TO COMMISSION,) KAB, KAHAN , KAISE ,KISSKO,KAISE, KAYN BECHNA HAIN. A broad definition of Competition is a situation in a market in which firms or sellers independently strike for the buyers patronage in order to achieve a particular business objective, for example profit, sales or market share (World Bank, 1999). A pre-requisite for a good competition is trade, trade is the unrestricted liberty of every man to buy, sell and barter, when, where and how, of whom and to whom he pleases. For a free market to be in existence the handicap is that for a given distribution of income of those who can pay the highest price will most be able to purchase the goods regardless their relative needs. However, the real culprit is income distribution system and not the competitive system. In an unregulated free market, in certain circumstances it could be of greater benefit to the owner to withhold goods from market in order to extract a higher price. Despite the efforts to regulate prices which have been unsuccessful, the caution in a free market as compared to the problems in an unregulated market can be overcome by posturing competition by which the ultimate raison de etre of competition, namely the, interest of the consumer can be protected.

Q EXPLAIN Competition Laws in UK and US

Competition and Consumer Welfare. (AVIATION CARTEL ) Competition means rivalry in the marketplace, which is regulated by a set of policies and laws to achieve the goals of economic efficiency and consumer welfare, and to check on the concentration of economic power. All these goals have an interactive relationship and, when in harmony, deliver total welfare. Indeed, it is the consumers who are supposedly the biggest beneficiaries of competition. On the other hand, it is the consumers who are the main losers due to anti-competitive activities in a market. The consumers are worse off because of their lack of capacity to deal with such problems. It is sometimes believed that competition policy and law are tools for the rich, the urban, and industries alone. However, at the macro level, the design and implementation of a competition policy promotes the advancement and increased welfare of the poor. At the micro level, an effective competition regime or consumer law (covering competition distortions) can prevent consumer abuses, both at industry level as well as in a village or locality where one shopkeeper can cheat the whole community. An appropriate and dynamic competition policy and law are imperative to buttress economic development, curb corruption reduce wastage and arbitrariness, improve competitiveness and provide succour to the poor. Before we embark on assessing the consumer welfare implications, it is important to understand the notion of consumer welfare. Unfortunately, there is no agreed definition of consumer welfare. Even so, one can have a fair understanding of the notions surrounding consumer welfare by looking at the United Nations Guidelines for Consumer Protection, adopted by the UN General Assembly in 1985, and amended in 1999. These guidelines represent an international regulatory framework for governments to use, for the development and strengthening of consumer protection policy and legislation, aimed at promoting consumer welfare.

Fig.4 Q EXPLAIN Competition Policy and Law.

COMPETITION LAW

US (Federal) Law (FATL)

U.K. Laws

Indias Law

The Competition Policy is regarded as genus, of which, the Competition Law is specie. Competition Law provides necessary powers to the commission to enforce and implement the Competition Policy. The central economic goal of the Competition Policy is the preservation and promotion of the competitive process. It is a symbolic process, which encourages efficiency in the production and allocation of goods and services over a period of time through its effects on innovation and adjustment to technological change. In conditions of effective competition, competitors will be having equal opportunities to compete for their own economic interest and therefore the quality of their outputs and resource deployment will be given top priority in order to sustain and succeed in the market by meeting consumers demand at the lowest possible cost.

US FEDERAL LAWS

1890 Sherman Act

1950 Clayton Act

1914 Federal trade commission ACt

For fair price

There are three major federal anti-trust laws in United States namely the Sherman Anti-trust Act, the Clayton Act and the Federal Trade Commission Act. The Sherman Act passed in 1890 was the first Federal Anti-Trust Laws. The Act aimed at restraint of trade and monopolisation of Inter-State and Foreign Commerce. The Clayton Act is a civil statute (carrying no criminal penalties, was passed in 1914 and significantly amended in 1950). The Act is the result of failure of the Sherman Act to stop the trend towards concentration in the American economy. It attempts to nip monopolise in the bud by specifying practices that monopolists used to gain monopoly power. The Federal Trade Commission Act, 1914 prohibits unfair methods of competition in InterState Commerce but carries no criminal penalties. However, there was Federal Trade . Commission to monitor violations of the Act. Thus, in US basically anti-trust laws protect competition by ensuring free and open competition, which bring benefits to consumers by way of lower prices, new and better products.

The

U.K. LAWS

1998 U.K. Competition Act came in force in March 2000

Enterprise Act, 2002

European Commission

UK Competition Act, 1988 which came into force in March 1, 2000 is based upon the Competition Law of the European Commission. The Act prohibited agreements, which have the object of preventing, restricting or distorting competition which directly or indirectly fix prices, trading conditions, limit or control production, markets or sources of supply. The Enterprise Act introduced the next major reform of UK Competition Law, 2002 which concentrated on a new regime for the assessment of mergers and markets in the UK. The third and final stage of reform process in the UK Competition Law will be the implementation of European Commission, which is a radical modemisation of UKs Competition Policy. To regulate the competition and its practices. most of the countries have the competition authority commonly known as the Competition Commission.

Q EXPLAIN Competition Act, 2002

INDIAS LAW

Competition Act 2002

Consumer Protection Act

Prohibition of Certain Agreements

Abuse of dominant position

Regulation

The Competition Act, 2002 intends to Drode. 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 SLStBifl 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. The renewed efforts of the Government in implementing a Competition Act, 2002 is a laudable step in the right direction and a new beginning in the frontiers of Indias Competition Policy towards harmonizing international trade and policy.

Question 7 Answer whether the statement is correct or incorrect with brief reason: Competition Act, 2002 protects the interest of consumers. (November 2007) Answer Correct: Competition Act, 2002 intends to protect the interests of consumers by establishing a commission to prevent practices having adverse effect on competition and to promote and sustain competition in markets. The commission is empowered to prohibit certain agreements

which are considered as anti-competitive in nature, abuse of dominant position and regulation of combinations likely to cause appreciable adverse effect on competition. Question 8 A retailer was purchasing goods regularly from XYZ Ltd. for the purpose of resale. There were defects in the goods in one of the purchase lot and as a result the retailer suffered loss of his share in competition. The retailer sued the said company for this reason. The company contended that the goods were purchased for the purpose of resale and therefore, not bound. Is it a valid contention? Explain clearly the provisions of Competition Act, 2002 in this regard (November 2008) Answer The problem as asked in the question is based on the provisions of Section 2(f) of the Competition Act, 2002. The Section provides that consumer means any person who buys any goods for a consideration which has been paid or promised or partly paid or partly promised or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised or under any system of deferred payment when such use is made with the approval of such person whether such purchase of goods is for resale or for any commercial purpose or for personal use. Hence Section 2(f) of the Competition Act, 2002 provides that whether purchase of goods is for resale or for any commercial purpose or for personal use, the purchaser is a consumer. Thus consumer will also include a person who purchases goods for re-sale. Therefore the contention of XYZ Ltd. is not valid and not tenable. Question : What are the Parameters of competition law ?
Parameters of Competition Law Prohibition of certain agreements. which are considered to be anti-competitive in nature. Such agreements [namely tie in arrangements, exclusive dealings (supply and distribution), refusal to deal and resale price maintenance] shall be presumed as anti- competitive if they cause or likely to cause an appreciable adverse effect on competition within India. Abuse of dominant position by imposing unfair or discriminatory conditions or limiting and restricting production of goods or services or indulging in practices resulting in denial of market excess or through in any other mode are prohibited.

 Regulation of combinations which cause or likely to cause an appreciable adverse affect on competition within the relevant market in India is also considered to be void use.

Fig.5 Q. WHAT ARE UN GUIDE FOR EIGHT THEMES UNCTAD 2001.

UN Guideline for eight themes UNCTAD 2001

Physical safety

Economic Interest

Standards

Essential goods & services

Redress

Education & information

Health

Sustainable consumption

SIS,ESSENTIALy RDREss EDUCATION HEALTH FOR SUSTAINING COMPETETION.

ANS The UN Guidelines call upon governments to develop, strengthen and maintain a strong consumer policy, and provide for enhanced protection of consumers by enunciating various steps and measures around eight themes (UNCTAD, 2001). These eight themes are: 1. Physical safety 2. Economic interests, 3. Standards 4. Essential Goods and services 5. Redress 6. Education and information 7. Specific areas concerning health 8. Sustainable consumption

Question : What are the eight consumer rights ?

Eight Consumer Right (Right to)

Basic Needs

Safety

Choice

Redress

Information

Consumer education

Representation

Healthy environment

BSC REDRESS INFORMATION OF CUSTOMERS EDUCATION REPRESENTATIOM ENVIRONMENT The Guidelines have implicitly recognized eight consumer rights, which were made explicit in the Charter of Consumers International as follows: Right to basic needs Right to safety Right to choice Right to redress Right to information Right to information Right to consumer education Right to representatio.n Right to healthy environment These eight consumer rights can be used as the touchstones for assessing the consumer welfare implications of competition policy and law, and to see how they help or hinder the promotion of these rights.

Fig.6

CONSUMER

Meaning

Consumer interest/ welfare

Consumer protection Council in India

UN Guideline for eight themes UNCTAD 2001

Eight Consumer Right

Physical safety

Sustainable consumption

Basic needs

Health environment

Fig.7

Q EXPLAIN MEANING OF Consumer - [Section 2(f). Competition Act, 2002] Consumer means any person who (i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or

under any system of deferred payment when such use is made with the approval of such person, whether such purchase of goods is for resale or for any commercial purpose or for personal use; (ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first-mentioned person whether such hiring or availing of services is for any commercial purpose or for personal use; It is note worthy that the definition of consumer is substantially the same has given to the expression under Section 2(d) of the consumer protection Act, 1986. The difference is that under clause (i), in the Competition Act, it uses the words whether such purchase of goods is for the resale of for any commercial purpose or for personal use in places of the words but does not include a person who obtains such goods for resale of for any commercial purpose, as in the Consumer Protection Act. Likewise, in clause (ii), the words used in the Competition Act are whether such hiring or availing of services is for any commercial purpose or for personal use in place of the words but does not include a person who avails of such services for any commercial purpose as in the Consumer Protection Act. Thus, the interpretation of consumer in the Consumer Protection Act will be the same as in Competition Act.In the latter, consumer will also include a person who purchases goods for resale or for any commercial purpose or for personal use.

Question 9 Answer whether the statement is correct or incorrect with brief reason: Consumer for personal use and consumer for commercial use are synonymous. (November 2008) Answer Incorrect: It seems that the definitions of consumer under Competition Act, 2002 and under Consumer Protection Act, 1986 are substantially the same. But there is difference between the two and that difference is that under clause (1) of Section 2(f) in Competition Act, the words used are whether such purchase of goods is for the resale of for any commercial purpose or for personal use in place of the words but does not include a person who obtains such goods for resale of for any commercial purpose as in the Consumer Protection Act. Likewise in clause (ii) the words used in the Competition Act are Whether such hiring or availing of services is for any commercial purpose or for personal use in place of the words but does not include a person who avails of such services for any commercial purpose as in the Consumer Protection Act. Thus in case of Competition Act the word consumer includes both consumer for personal use and for commercial use but it is not so in the case of Consumer

Protection Act. Question 10 Answer whether the statement is correct or incorrect with brief reason. Consumer interest and Public interest are synonymous. (June 2009) Answer Incorrect : Apparently it seems that public interest and consumer interest are synonymous, but it is not so. They may be differentiated as under: (i) In the name of public interest, many Governmental policies are formulated which manifest themselves in anti-competitive behaviour. If the consumer is at the fulcrum, consumer interest and welfare should have primacy in all governmental policy formulations. (ii) Consumer is a member of a broad class of people who purchase, use, maintain and dispose of products and services. They are being affected by pricing policy, financing practice, quality of goods, services and trade practices. They are clearly distinguished
Q EXPLAIN THE MEANING OF PUBLIC INTEREST.

PUBLIC INTEREST

Govt. policy is in name of Public interest

Society as whole has interest

Every Public is consumers too

Fig.8 Q EXPLAIN CONSUMER INTEREST AND PUBLIC INTEREST 1. Often, consumer interest and public interest are considered synonymous. But they are not and need to be distinguished. In the name of public interest, many Governmental policies are formulated which are either anti-competitive in nature or which manifest themselves in anti-competitive behaviour. If

the consumer is at the fulcrum, consumer interest and consumer welfare should have primacy in all Governmental policy formulations. 2. Consumer is a member of a broad class of people who purchase, use, maintain and dispose of products and services. Consumers are affected by pricing policies, financing practices, quality of goods and services and various trade practices. They are clearly distinguishable from manufacturers, who produce goods and wholesalers or retailers, who sell goods. 3. Public interest, on the other hand, is something in which society as a whole has some interest, not fully capture, by a competitive market. It is an externality. However, there is a justifiable apprehension that in the name of public interest, Governmental policies may be fashioned and introduced which may not be in the ultimate interest of the consumers. The asymmetry arises from the fact that all producers are consumers but most are producers as well. What is desirable for them in one capacity may be inimical in the other capacity. A simple example will make the point clear. A farmer wants the price of goods he consumes to be as cheap as possible but wants the highest price for his produce. A Government wishing to encourage agriculture for self-sufficiency in food as a national security measure faces the conflict: should it support high prices to encourage production or low prices to protect the consumer? This is a characteristic public interest- consumer interest conflict. In genera, it can be stated that buyers want competition and sellers monopoly. The economists answer is that there are in a society too many such divergent interests and therefore the resolution is best left to markets without Government intervention. They are all too conscious of the possibility of abuse of the expression public interest by vested interested.

Q. EXPLAIN CONSUMER PROTECTION COUNCILS IN INDIA

Consumer Protection Council in India

The Central Consumer Protection Council

The District consumer protection Council Implementation of A to F at Dist.level

Protecting marketing of hazardous

Against unfair trade practice

Variety of goods

Consideration

Re-dressal against exploits

Right to consumer education

The Central Consumer Protection Council: The objects of the Central Council shall be to promote and protect the rights of the consumers such as, (a the right to be protected against the marketing of goods and services which are hazardous to life and property; (b) the right to be informed about the quality, quantity, potency, purity, standard and price of goods{or services, as the case may be} so as to protect the consumer against unfair trade practices; (c) the right to be assured, wherever possible, access to a variety of goods, and services at competitive prices; (d) the right to be heard and to be assured that consurncis interest will receive due consideration at appropriate terms; (e) the right to seek redressal against unfair trade practices {or restrictive trade practices} pr unscrupulous exploitation of consumers; and} (f) the right to consumer education. The State Consumer Protection Council: The objects of every State shall be to promote within the State the rights of the consumers laid down in point (a) to (f) mentioned above.

 The District Consumer Protection Council: The objects of every District Council shall be to promote within the State the rights of the consumers laid down in point (a) to (f) mentioned above.

Question 12 Write a note on corporate governance and its historical development in the Indian context. Answer Corporate governance is about promoting corporate fairness, transparency and accountability. It is concerned with structures and processes for decision making, accountability, control and behaviour at the top level of organisations. It influences how the objectives of an organisation are set and achieved, how risk is monitored and assessed and how performance is optimized. The term Corporate Governance is not easy to define. The term governance relates to a process of decision making and implementing the decisions in the interest of all stakeholders. It basically relates to enhancement of corporate performance and ensures proper accountability for management in the interest of all stakeholders. It is a system through which an organization is guided and directed. On the basis of this definition, the core objectives of Corporate Governance are focus, predictability, transparency, participation, accountability, efficiency & effectiveness and stakeholder satisfaction. Accountability relates to how well the content of workplace decisions is aligned with the organisations stated strategic direction. Control involves the process of auditing and improving organisational decisions and actions.Corporate governance arrangements are key determinants of an organisations relationship with the world and encompass: 1.The power given to management; 2.Control over managements use of power (e.g. through institutions such as Boards of Directors); 3.Managements accountability to stakeholders; 4.The formal and informal processes by which stakeholders influence management decisions. In India, Corporate Governance is ensured by subjecting companies to clause 49 of the listing agreements that listed companies have to signed with stock exchanges. The focus of clause 49 has been on: (i) appointment of independent Directors, (ii) financial disclosures and (iii) stream lining of auditing procedures.

The Confederation of Indian Industry desirable code of

(CII) took the lead in framing a

corporate governance in April, 1998. This was followed by the recommendations of the Kumar Manglam Birla Committee on Corporate Governance. This Committee was appointed by the Securities and Exchange Board of India (SEBI). The recommendations were accepted by SEBI in December 1999, and enshrined in Clause 49 of the Listing Agreement of all Stock Exchanges in India. In August 2002, the Department of Company Affairs, Government of India, constituted a nine member committee under the chairmanship of Mr. Naresh Chandra. SEBI having analysed disclosures made by many companies under Clause 49 constituted a review committee under the chairmanship of Mr. N.R. Narayana Murthy. The Narayana Murthy Committee report, 2003, suggested further improvements and in alignment with these recommendations, the revised Clause 49 has been made effective.

Question 13 Examine the following hypothetical situation and give a brief analytical note on it. ABC Ltd. has been the leading scientific equipment manufacturing company in South India. But it suddenly finds that certain companies from North India that do not have anywhere near its own kind of clout in their own turfs, are trying to enter the south Indian market. But because of its superior clout, ABC Ltd coerces them to enter into agreement with itself such that they do not sell at prices above that of its own products. Please comment on the legality of such agreements. Conversely, if ABC Ltd were to enter into agreements with distributors such that the distributors are prevented from marketing the products of the North Indian companies, would that be illegal? Answer The Competition Act, 2002 intends 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.

The Act deals with the following: Prohibition of certain agreements , which are considered to be anti-competitive in nature. Such agreements [namely tie in arrangements, exclusive dealings (supply and distribution), refusal to deal and resale price maintenance] shall be presumed as anticompetitive if they cause or are likely to cause an appreciable adverseeffect on competition within India. Abuse of dominant position by imposing unfair or discriminatory conditions or limiting and restricting production of goods or services or indulging in practices resulting in denial of market access or through in any other mode are prohibited. Regulation of combinations which cause or likely to cause an appreciable adverse effect on competition within the relevant market in India. In light of the above points, any agreement that ABC Ltd. may enter into with its competitors from North India to tieup the price at a certain level is prohibited. Such agreements would also amount to abuse of dominant position. Conversely, agreements with distributors preventing the latter from distributing the goods of its competitors would also be illegal since they would restrict market access and can be deemed anti-competitive.

Question 14 State the objectives of the Central Consumer Protection Council in India. (November 2010) Answer The objectives of the Central Consumer Protection Council in India are to promote and protect the rights of the consumers such as:(i) the right to be protected against the marketing of goods and services which are hazardous to life and property; (ii) the right to be informed about the quality, quantity, potency, purity, standard and price of goods/services so as to protect the consumer against unfair trade practices; (iii) the right to be assured, whichever possible, access to a variety of goods and services at competitive prices; (iv) the right to be heard and to be assured that

consumers interest will receive due appropriate terms; (v) the right to seek redressal against unfair trade practices; (vi) the right to consumer education.

consideration at