MRTP Act, 1969

Overview

Objectives and Coverage of the MRTP Act

To Control and regulation of concentration of economic power. To Control of monopolies and monopolistic trade practices; and Prohibition of restricted trade practices.

Coverage
1. To regulate merger and acquisition. 2. Applies to all private business entity big or small. Prior to sep, 1991 the act did not apply to: Undertaking owned or controlled by govt or a govt company or corporation establishment under any central, state or provisional act. Undertaking engaged in an industry the management of which was taken over by a person authorized by central govt. Undertaking owned by a cooperative society.

Enforcement Machinery
The MRTP Commission. The director general of investigation and registration (DGIR) Central Government Supreme Court

Monopolistic trade practices

MRTP Act - Sec 2(i), an MTP was defined as a trade practice which had any of the following effect: 1. Limiting or controlling, supply or distribution of goods or services thereby maintaining their price at unreasonable level. 2. Limiting the technical development or capital investment. 3. Unreasonably preventing of restricting competition. 4. Unreasonably increasing cost of production. 5. Unreasonably increasing profits on production, or distribution. 6. Resorting to unfair means to reduce or prevent competition in goods or services.

Regulation of MTP
MRTP commission could make an enquiry on the basis of following: A reference received from central govt. An application received from DGIR in this regard. Commission own information or knowledge.

Restrictive trade practices

An RTP under the act had defined to be the one that had the effect of preventing, distorting or restricting competition in any manner.
Common practices of RTP were as follows: Restriction on buying and selling Tie in sales Exclusive dealership agreement Collective price fixation Output or supply restrictions Price control agreements

Unfair Trade Practices

False or misleading representation Form of misleading representation: Quality or standard of goods or services. Old goods as new Utility of good and services. Guarantee of good without proper test. Price of good and services. Sponsorship of goods or services supplier.

The Competition Act, 2002

MRTP Act has been replaced by the competition Act, 2002 on recommendation of the SVS Raghvan committee. Competition commission of India: A chairman and 2 10 members.

Basic duties of commission

To eliminate practices having adverse impact on competition. To promote and sustain competition. To protect interest of consumer. To ensure freedom of trade carried out by other participants in market.