About Monopolies and Restrictive Trade Practices Act (MRTP Act).
Monopolies and Restrictive Trade Practices Act (MRTP Act) is not active in India because it was replaced by Competition Act 2002 with effect from September 1, 2009. by the Competition Commission of India.
The preamble to the MRTP Act explained it as “An Act to provide that the performance of the financial system doesn’t result from the concentration of financial power to the common detriment for the management of monopolies, for the prohibition of monopolistic and restrictive trade practices and things connected therewith or incidental thereto.”
The MRTP Act has created distention between monopolistic and restrictive trade practices. Therefore the monopolistic trade practices had been described as”dominant firm practices”, i.e., a company or a oligopolistic set of 3 firms, after reaching a dominant position was”able to control the market by regulating output or prices or eliminating competition.”
Restrictive trade practices include joint action undertaken by a group of two or more companies so as to avoid competition in the industry no matter the market share. These kinds of practices are”deemed to be prejudicial to public interests”
In order to produce mandatory review of the functioning of MRTP Act and also to make mandatory recommendation for streamlining its activity, the Government appointed a Sachar Committee from 1977. On the basis of the recommendations produced by this committee, the Government made mandatory alterations in Act from 1980 and in 1984. In 1991, a substantial change was made in which chapter (III) on Monopolies has been dropped.
What is MRTP Company?
The firms with assets of Rs. 25 Crore or longer were placed under the obligation of taking permission from the authorities of India and also they were called MRTP businesses. This top limit of Rs. 25 Crore was known as MRTP limit. Currently only companies having more than 25% market share were known as Monopolies.
What’s Unfair Trade Practice?
Unfair Trade Practice might be the False representation and deceptive advertising of products and services. Or Falsely representing secondhand products as new. Or Misleading representation concerning usefulness, require, quality, regular, fashion etc of products and services. Or False representation or claims regarding cost of products and services. Or Offering false facts about sponsorship, affiliation etc. of products and services. Or Offering false assurance or warranty on products and services without any sufficient evaluations.
What’s Monopolistic Trade Practice?
The act defines the Monopolistic Trade Practice because”Such practice signifies misuse of someone’s power to misuse the marketplace concerning manufacturing and sales of products and services. Businesses involved with monopolistic trade practice attempts to get rid of competition in the industry. They then benefit from the monopoly and charge unreasonably significant rates. In addition they deteriorate the merchandise quality, restrict technical advancement, stop competition and embrace unfair trade practices
What’s Restrictive Trade Practice?
The act defines Restrictive Trade Practice since”The traders, so as to maximize their gains and also to acquire power on the current market, frequently indulge in activities that generally block the circulation of funds into manufacturing. Such traders also bring about terms of shipping to impact the circulation of supplies resulting in unjustified expenses.”